Wednesday, December 04, 2013 by Neil Cook
As many start-ups are teaching us, eyeballs and information are hot commodities. As online marketers branch out, mobile messaging, in particular SMS, as a communications channel is poised to become the next email — completely saturated with legitimate businesses looking to easily connect with and market to end-users.
Marketing firms won’t be the only ones vying for attention via SMS by any means. As Internet advertising revenues continue to increase (IAB placed it at $20.1B in 1H13), rogue affiliates will likely up their attempts to illicitly gain their piece of the advertising pie. It follows that SMS — with its always-on/instant read characteristics — will prove an attractive target in 2014. Fraudulent campaigns similar to the PPI and Pension Release scams observed in the UK will increase substantially. In terms of potential tactics, it is evident that healthcare reform in the US will be a target.
Similarly, the rate of overly malicious unwanted email remains high. The high incidence of CryptoLocker ransomware – generally distributed via email – stands as a testament to this. That success is an indication that attackers are anxious to more directly influence their Return-On-Investment (ROI). We anticipate that 2014 will see continued increases in the malicious spam category. A similar trend is emerging with SMS spam. The rise in phishing-related mobile trojans and SMS phishing in 2013 indicates attackers are likely meeting with success in this arena. As a result, 2014 should bear witness to an uptick in SMS spam – both to directly facilitate phishing and to further disseminate trojans.
Malware has also kept up a steady migration to the mobile space with ransomware set to be a logical next step in future. In its simplest form, ransomware could simply copy sensitive information from the phone to blackmail users. Eventually, however, encryption is going to be brought to the table. Similar to the recent outbreak of Cryptolocker, mobile ransomware will eventually force victims to pay up or face losing the contents of their phone — contents locked away behind layers encryption. Cryptography may also spice up the mobile world soon in the form of bitcoin-mining malware, ready to convert your battery life into digital currency.
Governments will clamp down on this spamming and fraud with increased regulation especially in the mobile messaging arena. Developing markets will likely exemplify this with harsher positions against messaging abuse. In the US, intervention by the FTC has resulted dramatic decreases in various SMS campaigns. Other regions have not fared as well though, stumbling over less effective legislation in attempts to curb SMS spam, for example by setting limits on the number of SMS that can be sent from a single SIM. We expect regulators in 2014 to start concentrating on clarifying regulations for operators to enable them to effectively police their own mobile messaging streams, as well as ensuring that law-enforcement and other agencies have the appropriate “teeth: to deal with the perpetrators. Premium rate texting specifically will rise to be a paramount concern in the coming year for those regions that have lenient rules around the service. The implications of such an easily-exploited service will only gain popularity.
We anticipate that established telcos will also take these legislative opportunities to begin a renewed emphasis on providing “clean-pipes,” particularly to enterprises and financial services companies. Businesses won’t be the only ones asking for cleaner channels, though. According to a recent study, 73% of respondents believe that network providers should shield them from SMS spam. It’s easy to see that mobile operators will need to redouble their efforts to safeguard their end users. If they don’t, SMS revenues may take a downturn as customers drop their SMS plans in favor of over-the-top (OTT) messaging solutions at an even faster rate than is happening now.
Other Messaging Platforms
The barriers and legislation put in place for SMS will shift spammers’ focus at least partially to other platforms. OTT messaging programs will be one outlet for avoiding the costs and potential legal risks associated with SMS, while preserving the personal touch of mobile. Fortunately, OTT networks exist in a closed, tightly-controlled ecosystem that affords them a better chance of stemming the tide of spam. Unfortunately, any OTT providers fail to do so will falter, with other, cleaner competitors freely and readily available. OTTs that straddle both mobile and desktop, such as iMessage, will face an even worse uphill battle due the desktop’s accessibility for spammers. Any operators launching new mobile messaging services leveraging their 4G networks, such as RCS/Joyn, will need to focus on ensuring that this new service remains spam and fraud-free, again to blunt the increasing competition from OTT providers. The fact that mobile messaging is inherently open (through standard protocols and open APIs), increases its attractiveness to subscribers through ubiquity of communication, yet it is also the reason for its attractiveness to spammers.
Finally, social networks’ walled gardens will face a different challenge in the coming year: privacy. Whether it is a scammer or a marketing campaign, personalization can be used as a boon to ROI. This demand for personal information will put a burden on social networks to conserve one’s privacy. Consumers will be increasingly taught the value of closely guarding their personal information and the dangers of giving it away. Mining social profiles and posts provides a simple shortcut to: phishing attacks; IRS tax return fraud; and reselling personal details to insurance companies, credit agencies, etc for direct sales and marketing. The demand for this kind of data will only increase as marketers and attackers find creative new ways to use personalization for greater affect. This will only be compounded by social networks continued takeover of personal communications, leaving email to courier commercial and business-related messages.