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SMS firewalls can reduce fraud messages by 75 per cent within five years

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(Image credit: Apple Inc)

Volumes of SMS traffic fraud will fall by three quarters over the next five years, boosting business revenues for mobile operators that invest in firewalls that filter out malicious communications.

According to Juniper Research, the deployment of SMS firewalls that use advanced analytics, Natural Language Processing (NLP) and Machine Learning will be critical in such a dramatic reduction.

Machine Learning is especially valuable because it can detect threats in real time.  

SMS scam reduction

A typical SMS-based scam is a phishing attempt involving a message that purports to be from a legitimate organisation and tempts users into clicking a link and entering personal information. For example, a message claiming to be from HMRC might demand a tax payment or one from a retailer might offer an exclusive discount.

“Machine learning is crucial to combatting fraud, as it enables network operators to compete with the constantly evolving tactics of malevolent players,” said Scarlett Woodford who authored the report. “SMS firewall vendors must implement machine learning techniques to detect new fraudulent tactics, or they risk losing market share to more technologically-adept vendors.”

The headline figure in the report is that the number of fraudulent SMS messages will fall from 539 billion in 2020 to 138 billion in 2025. The most dramatic reduction will take place in North America, where such traffic will fall by 99 per cent from 178.4 billion messages to just 1 billion.

Globally, the amount of revenue lost to illegitimate channels falling from $5.8 billion to $1.2 billion. Meanwhile SMS business revenues will increase by 26 per cent from $39.6 billion to $50 billion.

The rise in business SMS revenues will be valuable for operators that have had to cope with falling income from traditional SMS and voice services due to the popularity of Over the Top (OTT) applications like WhatsApp and social media.

However the universality of SMS means it will always be a critical communications channel for business. Rich Communications Services (RCS) messaging is seen as a successor to SMS because of its ability to combine this ubiquity with more advanced features such as rich media content. This might attract businesses and increase revenues for operators.