Telcos’ lucrative revenues from supporting second-factor authentication SMS traffic are facing competition from flash call verification: time to tool up!

Most people are familiar with Second Factor authentication processes (2FA) whereby a code (a one-time password also known as OTP) is sent via SMS to allow people to perform tasks requiring security and verification. However, in countries and areas where SMS and mobile calls are relatively expensive, another 2FA method—flash call verification—can be used.

A flash call is a quick automated call to a phone number that is then instantly dropped. The last few digits of the number that originated the ‘missed call’ can then be automatically tallied by an app on the mobile (with the digits that are expected as the right code) to verify that the user operating this phone is the person making the request requiring authentication.

The user does not need to manually submit any OTP, and the missed call incurs no call charge. Market estimates point to the use of flash call verification to grow from 60m in 2021 to 130bn by 2026.

Mobile network operators (MNOs) that have been monetizing the use of SMS services in standard 2FA may stand to lose out if they do not keep up with the trend. According to data from Juniper Research, over 90% of flash calling traffic are likely to be undetected by network operators this year, and leading to potential “lost” revenue of up to US$1.3bn between now and 2027.

The key for MNOs, according to the research, is to modernize using voice firewalls to detect flash call traffic with high accuracy (via AI algorithms), in order to monetize the traffic by charging for it. As any voice calls incorrectly identified as flash calling traffic can lead to subscriber frustration and impact customer experience, MNOs will have to tool up to reduce revenue leakage. Also, voice firewalls can detect phone/voice fraud, helping MNOs to protect subscribers.