Every innovation in communications technology will inevitably be viewed as an opportunity by some to take advantage of others for profit or other nefarious purposes. This was even true in the 19th century, where bad actors used the newly developed telegraph to conduct activities such as insider trading [1] , manipulate sports betting [2] and early forms of advanced fee frauds [3] .
In this modern era, bad actors have turned to mobile devices, and it’s a big problem. In the US alone, according to Forbes [4], SMS fraud costs smartphone users more than $300m each year, up by a factor of five in just five years. Around 400,000 dangerous texts are sent every day, with nearly 40% of all smartphone users receiving them. To make matters worse, less than 35% of the population even know what smishing is [5], making it a highly successful form of attack.
How is SMS Fraud Evolving in the 5G Era?
Given the history, it should come as no surprise the adoption of 5G technology has created new opportunities for fraudsters and new headaches for communications service providers (CSPs). SMS fraud, in particular, has evolved in several significant ways due to 5G’s faster speeds, increased network capacity, and the expansion of connected Internet of Things (IoT) devices.
The growth of connected devices has increased the attack surface. Fraudsters now have more endpoints to target, ranging from traditional smartphones to IoT devices that use SMS for communication. Many IoT devices have weaker security, making them attractive targets for fraud.
With higher bandwidth and lower latency, cybercriminals can execute phishing attacks at a faster rate. This allows them to send a larger volume of smishing messages in a shorter time frame, targeting more users. What’s more, these attacks have become more personalized and harder to detect with advancements in artificial intelligence (AI), which attackers are using to refine their tactics.
5G has also made SIM swapping attacks more dangerous. In these cases, fraudsters gain control of a victim’s phone number by convincing mobile carriers to transfer the number to a SIM card they already own. This allows them to intercept SMS messages for two-factor authentication (2FA) and take over accounts more effectively. Because mobile devices are used for enterprise authentication, hijacked SIM cards can also give hackers access to a user’s enterprise account and potentially sensitive corporate IP.
Many IoT devices rely on SMS for alerts and updates. Without adequate security, these SMS-based communications can be intercepted or manipulated. For example, attackers could spoof messages from IoT devices, causing confusion or triggering false actions.
How will AI help manage new SMS fraud threats in 5G networks?
As SMS fraud becomes more sophisticated with the rise of 5G, AI can play a significant role by enhancing detection, prevention, and response capabilities. For example, AI and machine learning (ML) algorithms are capable of processing vast amounts of data in real time, identifying patterns that indicate fraudulent activity. These algorithms can analyze traffic anomalies, unusual behaviors, or deviations from normal messaging patterns to detect SMS fraud in real time.
AI-based systems can continuously learn from new data they collect and adapt to emerging fraud tactics as they evolve. With the rise of 5G, the volume and complexity of fraud attempts will increase, but AI can keep pace by updating its models based on new threat information, making it more resilient against novel attacks.
By incorporating natural language processing (NLP) into their anti-fraud solutions, CSPs can analyze the content of SMS messages to detect smishing by identifying suspicious keywords, phrases, or links. AI-driven NLP can differentiate between legitimate and fraudulent messages, even if the bad actors use sophisticated language or personalization.
How can CSPs protect their networks and customers from SMS fraud in the 5G era?
While 5G brings faster and more efficient communication, it also introduces new vulnerabilities for SMS fraud. The increased connectivity and speed mean that attacks can be larger in scale and more sophisticated, making the need for robust security measures more critical than ever.
AI will be a critical tool in managing SMS fraud in 5G networks by improving real-time detection, enhancing threat intelligence, and continuously learning from evolving fraud techniques. CSPs must adopt AI-powered solutions to stay ahead of fraudsters while maintaining the speed and scalability 5G networks offer.
The Enghouse SmartGuard SMS Firewall, powered by advanced AI technology, enables operators to protect their networks and subscribers from spam, fraud, malicious traffic, and security breaches. The solution is fully automated, leveraging advanced rules and AI algorithms to analyze messages in real time, ensuring seamless and efficient protection without the need for human intervention. By adopting SmartGuard, you can confidently protect your network and subscribers while adhering to the highest standards of data privacy and security.
Read our latest eBook The Operator’s Complete Guide to Eliminating SMS Fraud to learn more.
