This article was published in The Communicator (April 2017) issue 108 of the Communications Fraud Control Association Journal.
There’s a saying guaranteeing us only two sure things in life—death and taxes. If you’re in telecom, you know there’s a third certainty—mergers and acquisitions. Every week, the news details the latest telecom deals and speculates on carrier partnerships that haven’t yet happened. Even the smoothest mergers and acquisitions (M&A) involve a transition period, which can be stressful to navigate. And, for those in the fraud trenches, it’s crucial to quickly and efficiently integrate your fraud department/team/systems after M&A to protect both companies from substantial loss and fraud risk. Here are 7 tips for maintaining a strong defense and avoiding pitfalls amid the transition.
No two companies have the same business model, serve the same customers, nor offer the same services. Likewise, each party in a M&A already has an established fraud management strategy/system/solution (FMS). Having two distinct processes does NOT make one right and one wrong; however, one size definitely does not fit all when two carriers combine forces. You can’t catch or stop fraud if you’re not monitoring the traffic. Your goal after M&A is to:
Whether called blocking, barring, disabling, stopping, you likely take steps to shut down unwanted call activity. Don’t assume current blocking policies apply to the new traffic.
Every carrier has unique situations and circumstances, which mean different monitoring rules applies (aka business rules, customer profiles, or configurations). A finely-tuned set of monitoring rules for one network is likely not effective at all for another network.
Most every fraud practitioner relies on a list of known high-risk, “bad” numbers (hot list, blacklist, hot numbers, etc.) as a tool in their fraud fighting arsenal. A well-managed hot list helps prevent fraud, lost revenue, and duplicate effort across the entire organization.
An important component of fraud management is your billing system information. Many times, though, fraud systems get integrated long before the billing systems do. Don’t overlook the billing system feed, as this data helps you properly identify customers and understand the new traffic you’re monitoring. Additionally, your business/monitoring rules are almost certainly dependent on the billing data. Even if the billing systems remain distinct, you should integrate both billing feeds into your fraud system.
Even without M&A, there’s a lot of variance when it comes to who “owns” the fraud department and processes.
Accurate, up-to-date rates (termination costs) are essential for detecting high-cost destinations. After M&A, ensure your rates reflect the costs of both companies.
CFCA members are very helpful when it comes to fighting fraud, so speak up if you have questions. Many CFCA members have experience with FMS integration after M&A. Your FMS vendor is also a great resource. Ask your FMS provider to recommend the most efficient, cost-effective integration pathway. Rely on their experience navigating this process with other telecom companies to help shorten and streamline your integration timeline. Get the help you need to fortify your defenses, especially during a transition, because fraudsters constantly look for a way in.