It takes time for people to exploit the full potential of new technologies, as was apparent when I started my first job after academia. It would have been odd for a researcher in a Computer Science department to be unfamiliar with email, but many office workers were still struggling to get used to text-based electronic communications at that time, just like they needed explanations of why Lotus 1-2-3 was better at processing numerical information than a calculator. Memories like these come back whenever somebody sends me an enormous Excel file as an attachment to an email, presumably because they cannot get used to any of the hundred-and-one better ways we can now share data. Blockchain is to modern business what email was to business in the early 1990’s: a revolution that had yet to enter the mainstream. The businesses that realize its value first will gain a significant advantage.
Blockchain is both blessed and cursed by its association with cryptocurrencies in the minds of people for whom no technology is real until half the population is already using it. Cryptocurrencies exist, thus proving blockchain is a genuine technology, but they have caused some people to lose a lot of money, which leads some to conclude that blockchains serve no purpose other than enabling scams. This is a shame, as a tamper-proof ledger which can be accessed remotely should be an ideal instrument for transparent and accurate business dealings. Progress is being made in creating and popularizing blockchains that will greatly influence risk mitigation for comms providers in future. Here are four examples.
Authenticating Phone Calls
If you have a phone then you are probably familiar with the problem of scam calls from people who pretend to be someone they are not. Numerous ways of authenticating the identity of a caller are currently being explored, but many suffer from one simple defect: they are not universal. The simplest checks involve calling back a number that has just called you. This does not prove the identity of the person who called but it does confirm the CLI of calls received. More sophisticated checks will draw upon further data to establish the actual identity of the person who called, but in order to look up data then there has to be a store of data which can be looked up. Ill-conceived strategies will try to solve the global problem of authenticating calls with national programs that create national databases; the flaw should already be apparent. Some harbor vague hopes about connecting such databases in future, but why start down that path when we can begin with a ledger designed to work globally? That is why US telecoms identity management business Numeracle already has a patent to use blockchains to verify callers. As they explain in the patent:
The volume of automated telephone calls (“robocalls”) has recently skyrocketed, with billions of robocalls being made each month. Although telecommunication carriers and regulators appreciate the magnitude of the problem, their attempts to curb robocalls have had little success. The lack of success is in large part due to how a telephone call… propagates through a maze of carriers and networks before reaching the recipient, making it difficult to pinpoint the call’s origins and enabling the caller to evade regulation.
The patent also explains the advantages of using a blockchain to store information about the identities of callers.
The blockchains can serve as comprehensive, immutable, secure, trusted records that the telecommunication system can rely on to authorize or block telephone calls. The blockchains are comprehensive because each time an attribute related to a telephone number changes, the blockchain network can update one or both of the blockchains to include a new block with the telephone number correlated to an updated set of attributes for the telephone number. This creates a complete historical record indicating how attributes for each telephone number changed over time. Likewise, each time an authorized caller for a telephone number changes, the blockchain network can update one or both of the blockchains to include a new block with the telephone number correlated to a caller tag identifying the new authorized caller. This creates a complete historical record indicating how the caller assignment for each telephone number changed over time.
Settling Interconnect Bills
Disputes about the amounts that telcos owe each other can be costly and staff may dedicate a lot of time to resolving them. Sometimes it is easier and cheaper to split the difference rather than continue arguing about a bill, even if one telco believes the other party instigated the dispute just to get a better deal. Any methods which help to reduce disputes and increase the efficiency of settlement should be welcomed by honest carriers. This is how Subex described the inefficiencies in the way telcos have historically settled intercarrier bills.
[Interconnect] agreements are executed between domestic and international operators for mobile, fixed and internet services. Telecom operators collect and store detailed activity information as events. Interconnect partners share these CDRs for the purpose of verification and settlements. This process is cumbersome, inefficient, lengthy, costly, and error-prone. Missing CDRs and discrepancies in CDRs are very common problems.
A 2019 research paper from a special interest group within the Hyperledger Foundation made the case for using blockchain to eliminate errors when settling interconnect bills.
Inefficiencies in the inter-carrier settlement process are well-documented and well-understood in the industry. Over the years, network operators have lost billions of dollars due to disputes over billing, data discrepancies and mismatches, and delayed revenue recognition.
This brief explained the interconnect settlement problem and proposed a solution based on the Hyperledger Fabric blockchain framework. This solution will simplify the settlement process by creating a trusted single source of truth for the CDRs generated by operators. This will eliminate the root cause of data mismatches and discrepancies.
Given that several years of work have already gone into developing blockchains for interconnect settlement, the main obstacle to their adoption is now human inertia. This experience will be familiar to anyone who had to persuade office staff to start using email for the first time, or who now tries to discourage them from sending files as email attachments.
Checking the Regulatory Compliance of Suppliers
Telcos like BT and Vodafone are amongst the big businesses that use Trust Your Supplier (TYS), a cloud-based supplier management platform that lowers operating costs and reduces the time taken to onboard a new supplier. The platform also ensures suppliers comply with regulations worldwide and gives customers real-time visibility of their supply chain risks. The platform is built upon a blockchain so that everyone knows the information provided by suppliers is consistent with that shown to customers. This leads to efficiency savings on both sides, with suppliers knowing that if they have already submitted an answer to one kind of procurement question then the same answer will be given to every prospective customer that asks the same question, whilst customers know that every supplier on the platform is already having their financial health and regulatory compliance monitored by a series of vetting firms. The data on the blockchain can then by synchronized with the systems used to manage each customer’s business. As TYS explains:
Blockchain is designed for trust and secure trading, reducing vulnerabilities with information that is secure, provable & transparent. Our partners ensure seamless integration between TYS and ERP systems so you can maintain data, process, and compliance integrity throughout the platforms.
A recent TYS case study explained how a telco is using the information provided via the blockchain to speed the process of engaging a new supplier.
For suppliers who have now been onboarded, the time taken has been reduced from as long as four months to as little as a few days, improving the company’s agility as it is able to much more rapidly begin working with new suppliers in support of time-sensitive projects.
At the same time, by reducing the number of steps in the process from six to one and removing the number of people involved, the roll-out has been able to free up significant time that staff previously spent on qualification, allowing them to spend more time working closely with stakeholders in pursuit of strategic initiatives instead.
Exchanging Fraud Intelligence
I could hardly write a review of blockchains being used to transform risk management in the communications sector without mentioning the blockchain whose creation has occupied so much of my own time. The Risk & Assurance Group (RAG) has joined forces with blockchain developers SORAMITSU and telecoms software business Orillion to deliver the RAG Fraud Blockchain, a ledger used by comms providers to exchange information about crimes and attempted crimes. It is obvious why crime prevention is one of the key exemptions from data protection rules, but there is still a remarkable tendency for fraud managers to exchange information about crimes by emailing spreadsheets to each other. Such behavior is rationalized as being necessary because of the fear that exchanging information might violate data protection rules, though there is far greater risk of data being corrupted or compromised when it is keyed by hand, sent via an insecure method like an email, and then stored on a database where nobody else can be sure how the data is maintained.
The RAG Fraud Blockchain benefits from the same kind of immutability as needed for Numeracle’s identity verification blockchain. Deleting old records might seem an advantage to some fraud managers, but that conception was founded in a time when it was possible to have too much data. Rather than deleting data, it should be continuously refined. We complain that fraudsters always remain one step ahead, but their lives are made easier when we destroy our memory of where they have been. It would be better to maintain an ever-growing history of crimes we can draw upon for future analysis, not just to improve our understanding of fraudsters, but to also improve our understanding of comms providers too. A common history means the community of users can keep scoring the quality of every piece of intelligence submitted, so it will become increasingly clear which sources of intelligence are reliable and which should be treated with caution.
The TYS platform was designed to be integrated with other systems and so is the RAG Fraud Blockchain. Suppliers of well-known fraud management systems like Subex have already developed interfaces so their customers can seamlessly exchange information with RAG’s blockchain, and more suppliers are working to integrate their products too. Users of those fraud management systems will find choosing to exchange intelligence with other comms providers is no more difficult than flicking a switch, and will be made even easier by the use of tokenization, another feature made possible through blockchain technology. Put simply, tokens are created when users add new data, and these can be spent like money on other actions involving the blockchain, such as the downloading of data to a fraud management system. This solves the problem of free-riding that has blighted most attempts to promote the exchange of fraud intelligence, because some telcos did all the uploading of data whilst others exploited their generosity but gave nothing in return. Tokenization fosters a mentality of share-and-shake-alike by creating an incentive to upload a fair amount of intelligence relative to the amount that is downloaded.
It goes without saying that there are some professionals who would prefer to email spreadsheets for the rest of their careers as that will spare them the need to adapt to improved ways of working. Overcoming resistance is an issue for all the blockchains mentioned above. That is why I would argue that it is in the interest of all the organizations backing the other blockchains to encourage comms providers to exchange fraud intelligence via the RAG Fraud Blockchain. This blockchain will need to handle lower volumes of data than some of the others mentioned in this article, and it can be used free of charge. That removes two of the most commonly cited obstacles to comms providers experimenting with the use of blockchains. When large numbers of comms providers are routinely using blockchains to manage risk and reduce costs then their rate of adoption will accelerate, in the same way that refusing to have an email address becomes anachronistic if the rest of the world expects to send emails to you. Change can happen, and the business logic for using blockchains is so strong that it inevitably will happen. The only real question is who will lead, and how long it will take.