As part of their omnichannel messaging strategy, application-to-person (A2P) messaging is a way that enterprises connect with their customers. This simple yet direct method of communicating with customers has proven to be popular over time.
As more verticals and businesses adopt digital practices, A2P messaging has been witnessing a steady increase. With growing smartphone penetration and internet services, coupled with the cost-effectiveness, ubiquity and immediacy of A2P SMS for businesses to engage customers, the global A2P SMS messaging market is poised for further growth. Valued at about $62 billion in 2021, the market is projected to climb at a compound annual growth rate (CAGR) of 4.1% from 2022 to 2030, according to statistics from Beyond Market Insights.
With Asia Pacific having the world's largest population and number of mobile subscribers, telecom operators' generous SMS bundles provide the ideal breeding ground for fraudsters to misappropriate A2P SMS. Using gray routes, fraudsters use illegal interconnections to deliver an SMS and avoid termination fees. This undermines an operator’s duty to provide a threat-free environment for brands to engage their customers, resulting in reduced customer dissatisfaction and significant revenue loss for mobile operators.
Rising threats such as gray routes and spam impact mobile operators’ SMS monetization. Mobile operators are challenged to invest in protecting their networks from gray routes and other fraud types.
The topic of A2P fraud was recently brought to the spotlight as Elon Musk claimed that “Twitter was scammed to the tune of $60 million a year for SMS texts, not counting North America.” If what Musk claimed is true, this amount would account for about a third of Twitter’s reported total losses in 2021.
With regards to widespread A2P SMS fraud, Simeon Coney, chief strategy officer at Enea AdaptiveMobile Security, noted that Artificial Inflation of Traffic (AIT) is also a big contributor to SMS scams. Essentially, AIT is the generation of fake traffic from legitimate websites and apps to drive revenue for mobile operators. Attacks happen when fraudsters use legit online services to generate fake traffic using bots to increase revenue and then profit from it.
“AIT takes place over revenue call share numbers, shortcodes, and premium numbers, which bear a cost to the end-user, where the information provider inflates the traffic for financial gain,” said Coney. “This inflated traffic is often in the form of spam messages, designed to lure people into calling a particular number to exploit gaps in billing systems.”
Implementing SMS Firewall
With SMS becoming a more integral communication mode in people’s lives, SMS firewall implementation is becoming more critical in securing telecom’s customer data. Globally, the SMS firewall market has been on the rise, influenced by growing requirements to safeguard networks against gray route traffic and counter frauds that can potentially result in heavy revenue losses. In 2021, the global market size for SMS firewalls was $2.3 billion. Markets & Research predicts that this value will reach $3.3 billion by 2028.
However, most mobile operators view SMS firewalls as a secondary investment, as their focus remains fixed on revenue generation to offset rising network investment costs. However, this presents a catch-22 for operators, as A2P SMS is an important source of revenue that is worth safeguarding.
To tackle the increased sophistication of fraudsters and vulnerabilities in SMS, mobile operators have to step up their security stance. For instance, in the region, Jawwal has partnered with Vox Solutions for the direct termination of A2P SMS international traffic on its network. This direct connectivity partnership ensures reliable and secure A2P message delivery for its customers.
Increasingly, artificial intelligence (AI) and machine learning (ML) are being integrated into processes to protect against potential breaches through ongoing real-time monitoring and proactive responses. Essentially, no business, from the regular run-of-the-mill operation to Twitter, is spared from A2P SMS fraud. As fraudsters continue to search for loopholes, mobile operators are tasked with addressing this threat to protect themselves from further revenue loss.