Fraud Reduction Requires a Strong Data Foundation
Fraud costs the telecommunications industry billions of dollars each year, and studies estimate that revenue leakage due to billing errors can range from 1 to 3% of an operator‘s total revenue, which can add up to hundreds of millions of dollars.
One company successfully tackling this challenge is Araxxe, a leading provider of fraud detection solutions. Araxxe’s mission is to help telecommunications companies maximize profitability by reducing fraud, eliminating unnecessary spending, ensuring billing accuracy and helping to maintain brand reputation.
Since 2005, Araxxe has utilized a global network of robots, or test call generators, for two key services. First, revenue assurance, where they check that every transaction is correctly measured and billed at the right price. Second, fraud detection, where they prevent revenue loss by identifying and quickly removing fraudulent accounts from the network.
They came to HiveMQ to improve the real-time data processing capabilities for these robots with increased scalability and reduced operational costs. In this case study we’ll explore how Araxxe’s migration to HiveMQ enabled the company to stay ahead of their competition and deliver high-quality services that help customers save millions of dollars.
Sharpening the Competitive Edge
Araxxe’s leading competitive edge is the network of robots validating transactions and executing test calls. The robots combine with on-premise SIM servers to generate any type of transaction with SIM cards located in 2G/3G/4G or 5G phones almost anywhere in the world.
Over time the robots have steadily increased in functionality and complexity. While simple monitoring with a 15 to 30-minute delay in batch data delivery was okay in 2005, eventually the company hit the turning point where near real-time analysis of the data could mean stopping more fraudulent events and saving a lot more money for their customers.
The old system relied on legacy data transfer protocols such as HTTP and SIP, which did not provide the necessary scalability, flexibility, and real-time communications required for effective monitoring. They were limited in their ability to design or implement a new system - a precarious predicament for a company interested in having more control over their backend structure and looking to grow.
Araxxe needed a reliable and efficient solution that would allow them to monitor clients’ data and their robots in real-time and at scale. In addition, they needed a protocol that could handle different sizes, types of content, software versions, and different hardware due to the varying ages of the robots.
Fast and Scalable Data Transfer
Araxxe discovered MQTT as an IoT data messaging protocol that met their requirements. With MQTT they could achieve real-time monitoring with a small data footprint, improving their ability to monitor the robots, detect and resolve issues quickly.
After exploring potential technology partners to act as the data hub, including Mosquitto and RabbitMQ, the Araxxe team knew they needed an enterprise-grade, always-on, and resilient MQTT broker. HiveMQ offered an MQTT platform that fit the bill, providing Araxxe with an easy-to-use and reliable foundation for their growing robot monitoring system. With HiveMQ, they could focus on helping customers detect fraud and errors without worrying about the underlying infrastructure, ensuring a faster time to market and improved efficiency.
Araxxe worked closely with HiveMQ to customize the solution to meet their specific needs such as configuring the MQTT broker to handle the volume and complexity of their data and integrating into their existing infrastructure. The robots are all connected via VPN so security was not a large concern, and deployment was on virtual machines.
One of the key challenges was ensuring the migration to MQTT did not disrupt Araxxe‘s operations. The team at HiveMQ provided extensive support during the transition period, including training and assistance with testing and deployment. This enabled Araxxe to smoothly transition to the new system without any downtime or interruptions to their data transfer processes.
Monitoring Telecom Robots and Managing Fraud Detection
Araxxe uses HiveMQ for two specific use cases
To monitor their robots (the prized and most critical asset of their business)
To manage the fraud detection chain.
First regarding robot monitoring, Araxxe built a client on the robot that could send its state roughly every two minutes, which includes basic hardware information, network information, status, disk usage, and current status of each of its phones. The data is collected in a Java service that checks the consistency of messages with the information in Araxxe‘s database and determines the operational status of each robot. Their maintenance team uses this application to monitor and maintain the fleet of robots.
In the fraud detection environment, efficiently identifying deceptive practices and blocking them hinges on one factor, time. When fraudsters have time to make fraudulent calls, they profit and are empowered to continue their deceptive practice. To mitigate this, Araxxe must immediately notify its customers of the detected fraudulent events. As soon as Araxxe identifies a fraudulent SIM card, the operator blocks or disconnects it and saves revenue.
All the communication between devices and their control center is made using MQTT. MQTT allows for fast message delivery and keeps the order of messages. The order is critical because the date and time is used to determine the timeframe when the fraudulent event appeared
Monitoring Millions of Transactions and Recovering Millions in Revenue
The HiveMQ deployment results in a highly customized and reliable MQTT-based solution that allows Araxxe to streamline its data transfer processes and better serve its clients.
Today the network is still growing and comprises hundreds of robots, covering telecom networks representing 90% of the global population. Araxxe monitors near 1.5 million transactions per month for revenue assurance and executes about 2 million calls and 500 thousand SMS per month for fraud detection.
The move to HiveMQ has enabled Araxxe to provide enhanced visibility and accuracy in its monitoring activities, resulting in better fraud detection and prevention. The implementation process was challenging, but with careful planning, collaboration, and support from HiveMQ, Araxxe could overcome the obstacles and achieve its goals.
With HiveMQ, we are able to build applications on top of the platform knowing we have real-time possibilities that were not possible for us previously,” said Alexandre Marchal, Computer Engineer and R&D manager at Araxxe. "In the end telecom operators can use our service to stop fraudsters quickly and increase their revenues.
Every day, Araxxe detects 25,000 fraudulent events for their customers. Every month they find 600 billing errors. As a result, they estimate they have helped customers recover 800 million in revenue.