AiThority Interview With Arnd Baranowski, CEO at Oculeus

How has telecoms fraud changed over time according to your career experience?

Previous generations of telecommunications infrastructure were built as physical networks. At the time, perpetrators of telecoms fraud needed to make actual physical connections to the network to manipulate and redirect traffic.

In recent years, exposure to telecoms fraud has changed as telecommunications technologies have evolved from physical network devices to IP-based and virtual infrastructure.

Today, telecoms fraud can be considered an enterprise cybersecurity issue that is constantly threatening not only telcos but also their customers.

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What type of voice communication services are highly exposed to fraud?

The unfortunate answer is that all types of voice communications are highly exposed to telecoms fraud.

Take the example of any typical business or organization that has a PBX running to manage its telephony system. Almost all modern PBX systems rely on the SIP protocol, which is now the standard protocol for IP-based voice communications. This SIP protocol is rather straight forward and for the sake of interoperability, although at the same time it is fairly easy for fraudsters to bypass security measures and inject fraudulent traffic via enterprise telephony systems.

This is commonly known as PBX hacking or toll fraud. Since most PBX systems are installed on-premise or somewhere in the enterprise’s Cloud environment, a telco’s fraud prevention efforts have limited capacity to block this type of fraud. To make matters more complicated, most businesses will only know that they have been the victim of PBX hacking or toll fraud when they receive their monthly bill well after the attack has been executed.

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Have the fraud management practices of telcos kept pace with these changes?

PBX hacking/toll fraud is just one example. There are plenty of other types of telecom fraud that constantly threaten telco operators and their customers. The methods used by fraudsters to identify vulnerabilities and manipulate traffic are becoming increasingly complex by the day.

It is clear that telcos are not keeping pace with the fast-moving perpetrators of fraud. This is one of the reasons why telecoms fraud is such an attractive business for cybercriminals. These cybercriminals committing telecoms fraud know that most telcos use slow-moving processes that still involve manual input from their revenue assurance and fraud management departments.

This scenario has created a situation in which cybercriminals can execute a telecoms fraud attack and inflict thousands of dollars or even more in damage before the telco is even aware that an attack took place.

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How can AI improve telecoms fraud prevention efforts?

Artificial Intelligence can certainly inject long overdue innovation to improve telecoms fraud prevention across the board.

To begin with, AI can be leveraged to create an automated framework to manage fraud prevention activities. This is a definite upgrade from existing practices that rely on manual processes to identify and block fraudulent traffic.

One step forward, AI can be used to understand regular patterns of communications traffic and perform ongoing behavioral analysis to evaluate irregular patterns of traffic for fraud.

With AI, new telecoms fraud patterns can be learned and actions can be automated based on the severity of alerts of suspected and confirmed fraud. 

How is AI leveraged in Oculeus’ fraud prevention technology?

This is how AI is being applied to the technology behind our telecoms fraud protection offerings.

Our technology provides telecoms fraud protection by profiling a communications network and building a baseline of expected telecommunications activities and traffic. The technology continuously monitors for traffic anomalies and other patterns that are indicative of fraud. Any suspicious traffic is immediately evaluated and is blocked instantly if confirmed to be fraudulent.

Our technology applies AI to learn the profile of ongoing calls and regular communications traffic and monitors for exceptions to the expected baseline. Our technology allows our telecoms fraud protection systems to evolve to understand new patterns of fraud and generate new sets of rules for taking action against fraudulent call attempts and communications traffic.

This AI-driven approach is being used in our Oculeus Anti-Fraud System for telco and network operators as well as our Oculeus-Protect service targeted at enterprises.

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Would it be correct to say that both the telco and its customers benefit from your AI-driven approach?

This is absolutely correct, especially for our Oculeus-Protect service.

Oculeus-Protect is a Cloud-based service that directly protects enterprise PBX systems and voice telephony networks from fraud in real-time.

For enterprises, Oculeus-Protect and its application of AI represent an insurance policy on the fraud protection efforts of their telecommunications service provider. This is important considering that the fraud prevention practices of most telcos are not sufficient and given the fact that in many countries the burden of paying for fraudulent charges fails on the enterprise and not the telco.

For telcos, Oculeus-Protect and its automated framework enabled by AI creates an interesting opportunity to generate revenue from telecoms fraud. This may sounds strange, although a telco can actually offer its enterprise customers a valuable telecoms fraud protection service based on our Oculeus-Protect offering.

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How is AI being applied to other areas of Oculeus’ product portfolio?

AI is currently incorporated throughout our product portfolio. For instance, in our Captura wholesale voice management system, we have applied AI to automate many of the features that previously required significant manual input to manage. Examples include features for entering price lists and optimizing traffic routes. The benefits of these AI-enabled capabilities are clear and position our Telco customers with the need for fewer resources to mana

Thank you, Arnd! That was fun and hope to see you back on AiThority soon.