Swisscom and Subex have walked away with the Global Telecoms Business Innovation Award in the Business Service Innovation category. The two companies innovated by sharing risks and rewards for fraud management, a relationship which is described as an ‘industry first’. You can read Subex’s press release here.
Though often talked about, it is rare to find successful risk reward deals between telcos and RA vendors. However, the concept is sound. If vendors genuinely believe they add value to the bottom line of the telco, they should be willing to provide financing for their solutions in return for a fair share of the returns they generate. Prospective risk reward deals often fall apart because of a lack of trust between companies, or arguments about how to measure the benefits generated. That Subex and Swisscom have shared fraud management risks and rewards for two years is good evidence of the maturity of both companies. Whilst others talk about standards to measure bottom line benefits, Subex and Swisscom were able to agree on the most important standard of all: a commercial contract. They have set a precedent for measuring fraud management benefits. Keep eyes on Subex to see if they will follow-up with more risk reward deals in future. As Kurt Meyer, Swisscom’s Chief Risk Officer pointed out:
In Subex we have found a partner who will help us address the next level of fraud management challenges successfully and we hope to provide a stimulus to the industry as a whole.
