An economical approach to Mobile Money?

It’s clear to all that the advance of mobile money and NFC services has become an unstoppable force, with the latest estimates putting global NFC m-payment transactions at US$50 billion by 2014. For the Fraud & Security teams in mobile operators this heralds arguably the single biggest change in the risk landscape since the original proliferation of mobile services back in the late 90s and early 00s.

Where there is money, there is fraud. It was therefore inevitable that when mobile phones became a financial instrument, they would immediately become a target for fraud. Mobile phones were already a very popular target for fraudsters and the combining of the 2 is simply irresistible. This has presented Fraud & Security teams with a fresh sets of challenges and opportunities, the first of which is how they are going to monitor the new services.

Many operators are looking to the financial services industry for best practice and whilst this certainly makes sense, I’m not so sure that the purchase of monitoring tools from the financial services environment is as wise. By buying in such systems, mobile operators run the risk of creating a siloed view of their customers, with one system looking at mobile money usage and others looking at calls, SMS etc. Surely the most effective way forward is to have a single view of every customer, assessing risk across all services.

Almost all operators have some form of Fraud Management System (FMS), monitoring their customers’ calls, SMS and data traffic. Mobile money services are relatively simple when compared to those offered by banks and insurers and the same is true of the data that they produce. It is therefore well within the capability of an FMS to take in mobile money and NFC transaction data and present it alongside the calls, SMS and data usage.

To avoid unnecessary expenditure and inefficient use of resource, my advice to mobile operators is to challenge your FMS supplier to provide you with a solution for monitoring your mobile money services. Only if their answer is ‘no can do’ should you be looking elsewhere!!

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Even before one gets to the tool, its important to know what they want and what they should be doing. This can be best understood by bringing in a team that has cross-domain experience and can work together to define requirements/expectations. The challenge within the Telco environment as well has been that every Telco just wants a Ferrari though their requirement and affordability is that of a sedan.

Sahasrangshu Pal Choudhury

Hi Morgan, saw your blog and it is evident to certain extent but mobile money is no way less complicated than banking commerce system, the reason is it performs triparty consent protocol based money exchange and like banks the systems. Payment of Goods and Service, Cash In, Customer Cash Out, Customer Merchant Cash In, Merchant Cash Out, Inter Customer M2M payment etc are already on move in some developed and under developed nations. People, Tool and process are equally vulnerable to both internal and external fraud . Telecom FMS system might identify fraud upto certain level based on CDR as… Read more »


Absolutely sire. Bang on the point!

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