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MEF Director of Programmes James Williams shares his highlights from a recent webinar with MEF Members Mobilesquared, Anam Technologies and Tata Communications, examining the latest data on how mobile operators are addressing the threat posed by A2P messaging fraud within the mobile ecosystem, as explored in the recent MEF report on the topic.

MEF has been around over 20 years and SMS text messaging has always been an area of interest for many of our members. Sure, mobile messaging has moved on from being SMS only to encompass many different channels (think chat apps and RCS in particular) but the humble text message has truly captured the imagination of billions and is globally understood. Businesses and organisations of all types and sizes have jumped into this channel which sees message open rates above 98%. If you’ve got important content to deliver rapidly then you can’t go far wrong using SMS. Application-to-Person (A2P) SMS is on the rise.

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Industry analysts had predicted that the cumulative annual growth rates of A2P SMS would level off very soon but now those forecasts have been well and truly torn up and rewritten. A2P SMS is growing rapidly and will continue to do so for several years on the back of the bump it received since COVID-19 appeared on the scene.

Now, any stats I mentioned forward all come from MEF member Mobilesquared. All regions of the world saw an uptick through 2020 ranging from Oceania at the low end with volumes increasing 19%, to an astounding 108% jump in the Middle East! 2.02 trillion A2P SMS messages were sent in 2020, an average of over 5.52 billion messages per day. But by 2025, the totals will have risen to 2.62 trillion and 7.18 billion messages per day.

The A2P SMS messaging market was worth $19.74 billion in 2020, the business messaging market rising in value steadily for two decades and is estimated to hit $23 billion by the end of 2021. The finance sector sent 26 percent of all A2P SMS messages alone. You get the idea. A2P SMS is a hot ticket with a CAGR of around 10%. But all is not a bed of roses…

Nick set the scene with deep impact by showing that the industry will lose $47.72 billion to grey routes in the period 2020-2025. There is clearly more work needing to be done to eliminate this but then there is work also to be done to get enterprises who have never used A2P SMS to start using it. 97% of registered businesses do not use SMS at all today in their communications stack!

With any burgeoning market come bad actors, people and organisations looking to make a fast buck and defraud. It’s just now that a new generation of fraudsters have entered the A2P SMS playground. Many previously focused on hacking company and government systems to steal data have found they can make more money from meddling in business messaging. Security and also the effective monetisation of SMS channels is becoming both more important and increasingly challenging to mobile operators. A2P SMS firewalls are becoming less of an option.

MEF has had its finger on this pulse for some and Mobilesquared carried out what is the third survey on A2P SMS Firewalls since 2017, kindly sponsored by MEF members Anam Technologies and TATA Communications.

The live webinar that took place on September 16th was the culmination of the project and took very much of a forward-looking view of the industry based on the research and data collated in the report.

Moderated by Nick Lane, Founder & Chief Industry Analyst, Mobilesquared the speakers were:

  • John Murtagh: CTO, Anam Technologies
  • Ankur Jain: Head Cloud Communications (CPaaS) Collaboration & Connectivity Solutions, Tata Communications
  • James Williams: Director of Programmes, MEF

Nick set the scene with deep impact by showing that the industry will lose $47.72 billion to grey routes in the period 2020-2025. There is clearly more work needing to be done to eliminate this but then there is work also to be done to get enterprises who have never used A2P SMS to start using it. 97% of registered businesses do not use SMS at all today in their communications stack!

John Murtagh was very bullish about the opportunities for A2P SMS as a whole saying he found that the CAGR for it was well above 10% from his perspective and that the real opportunity is to bring new use cases to companies to entice them to use A2P SMS more. A snowball effect in that growth feeds growth. SMS is like the road infrastructure which has been built out and is there. It’s in place and has global reach.

Operators are really starting to understand that an SMS firewall is the base module required to monetise traffic and take advantage of this growing market. Fraud in SMS is growing faster than overall A2P SMS traffic growth and operators need to protect the channel that is valued by enterprise businesses and to protect their customers against potentially damaging fraud scenarios. When it comes to countering the fraud itself, John emphasised it was important to work with a provider that had a solution which could learn from goings on across the world, not leaving a party with the situation that they could only learn from their experiences of fraud after the fact. A global anti-fraud provider would be the best way forward.

Ankur Jain from TATA Communications stated that the impact of COVID is still being felt and has led to flash digital transformation. A2P SMS has been attractive due to how neat it is and TATA Communications is like Anam seeing a bright future for it for the coming few years. But fraud is becoming more intelligently driven and more attention is needed to fight it. Mobilesquared research showed that approximately one-third of operators with a firewall do not update their rulesets on it which leaves clear avenues to be exploited by bad actors. Analytical tools too also play a huge role in fraud prevention. If mobile operators are trying to manage the anti-fraud initiative themselves, they simply don’t have the breadth and depth of data available. Human resources expert in A2P SMS is thin on the ground too and A2P SMS is very different from P2P SMS.

I have been known for years to be very bullish about the A2P SMS opportunity but stressed exactly what the run-up in this blog posts said: namely that sophisticated bad actors were now operating in this sphere leading to the big increased in the likes of Smishing that John mentioned.

I reiterated that operators having firewalls alone is not the silver bullet to fixing the issue. We all must collaborate. MEF’s SMS SenderID Registry programme has an important role to play, of course more operators need firewalls and to be constantly updating their rules on them to counter threats being seen in the market but I also raised the point that the responsibility did not lie just with the operators. Messaging aggregators need to have firewalls too given the important traffic aggregation role they play in the ecosystem.

Nick was clear that from the report’s findings, mobile operators need a change in their mindset to really understand the fact that two-thirds are not using their firewall effectively. Education is key, whether is comes from the likes of independent trade bodies such as MEF or providers such as Anam.

It’s clear that the fight against A2P SMS fraud is not done. There is plenty yet to be done and without collaboration winning the war won’t be possible. The opportunities for A2P SMS are huge, bigger than ever previously thought, but realising the opportunity needs all stakeholders to pull together in the same direction. And we here at MEF are doing everything we can to facilitate this and we’re proud of all the work our members are doing to (ultimately) protect consumers and monetise the opportunity globally.

James Williams

Director of Programmes, MEF

  

Tracking the evolution in Fraud – Free report

To ascertain how mobile operators are reacting to the threat posed by fraud, MEF has once again teamed up with Mobilesquared to look at the impact fraudulent A2P SMS traffic had on the business messaging ecosystem in 2020, and how this might affect the opportunity in 2021.

This report explores the key findings from the exclusive mobile operator  research and follows on from a similar project conducted by Mobilesquared for MEF in 4Q 2019.

Download now >

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