With Fraud Soaring, a New Analyst Report Argues That a Key Risk to the UK's Digital Economy Has Been Overlooked

With fraud costing the UK economy more than £137 billion each year, it's imperative that the telecoms industry plays its part in reducing the opportunity for fraud, according to a newly published white paper from UK-based analyst house Omnisperience. The paper analyses how the UK telecoms industry is inadvertently fuelling fraud due to its use of an outdated, inefficient and vulnerable number porting process.

The Omnisperience white paper ?UK Digital Fraud: There's a gap in the UK digital infrastructure and it's letting fraud in,' comes on the heels of the ?Fighting Fraud: Breaking the Chain' report, published by The House of Lords (HoL) in November 2022. This revealed that fraud is the most commonly experienced crime in the UK, accounting for 41% of crimes against the individual, with an alarming 25% increase in fraud since the Covid-19 pandemic. One of the main reasons for this is increased digitalisation, with 80% of frauds now cyber-enabled according to the UK's national reporting center for fraud and cyber-crime, Action Fraud.

Since mobile phones have become the de facto digital ID ? used to access and pay for an ever-increasing range of services ? and a critical component of online security, it's not surprising that criminals are targeting mobile devices. While banks, retailers and telecoms firms are doing everything they can to minimize fraud, Omnisperience's newly released white paper points to a major security gap that's been overlooked and is ?letting the fraud into the UK's digital infrastructure'.

"While the UK telecoms industry has worked hard at securing SIM cards, applications, handsets and data, hidden in plain sight is a risk that's largely been overlooked ? the security of the phone number itself," says the report's author Teresa Cottam, Omnisperience Chief Analyst.

Cottam explained that number porting is essential for a healthy competitive market because it allows customers to change service provider without having to change their number. "Unfortunately," she commented, "the UK's existing number portability process is antiquated and vulnerable because it was built for a very different era ? long before cybercrime existed at this scale."

The UK's number porting process, which was implemented in 1997 was designed to allow customers to shift service provider as easily as possible. But what's easy for customers is also easy for fraudsters to target and exploit. "Criminals probe for vulnerabilities and the UK's number porting process is a huge and overlooked vulnerability ? exactly what criminals like to exploit," Cottam said. "And yet it is something that could quickly and easily be addressed."

The report found most other countries have already updated their number portability process to one based on a central database of ported numbers. This increases efficiency, helps make the process more secure, and enables telecoms firms and banks to work together to shut down fraud before it impacts customers. Cottam stated: "The UK is well behind its competitors. It's been delaying replacing this process for over 15 years and it has run out of time. The current process is no longer fit for purpose and is impeding the growth of the digital economy, undermining customers' digital confidence, and exposing everyone ? customers, telecoms service providers, financial institutions and the wider economy ? to a huge range of risks."

To access the Omnisperience white paper, ?UK Digital Fraud: There's a gap in the UK digital infrastructure and it's letting fraud in,' visit https://omnisperience.com/uk-digital-fraud/ or to learn more, contact Jessica Levy at [email protected].

About Omnisperience

Omnisperience is an independent UK-based industry analyst firm that takes a fresh approach to research and advisory projects by helping its customers better understand their market and, as a result, become more profitable. Omnisperience's experienced analysts focus on digital service providers in the telecoms, media & technology sector (TMT), providing insight that helps them reimagine their businesses and improve their commercial success. Omnisperience engages and inspires ? delivering Value From Experience.