Telecommunications is constantly evolving, which makes staying compliant with regulatory requirements more complex than ever
As fraud and network resilience concerns rise, regulatory bodies are sharpening their focus on measures, such as “Know Your Customer” (KYC) and the lesser known, yet still integral “Know Your Transaction” (KYT). At Gamma, we are committed to helping our partners navigate these regulatory challenges, ensuring they are equipped to meet their obligations while continuing to innovate and grow.
The growing importance of KYC and KYT
The emphasis on KYC has never been more critical. As Gamma’s Head of Regulatory Affairs, Lee Turner, explains, “fraud is a big thing; it’s a big thing for governments.” The recent CrowdStrike outage goes beyond fraud, bringing network resilience and “making sure that infrastructure is able to cope” into the spotlight. Lee emphasises that KYC is a vital component of network security and customer trust.
However, the regulatory landscape goes beyond KYC, with Lee highlighting why a crucial focus must be placed on KYT. For Lee, “it’s not just about knowing your customers; it’s about knowing the type of traffic they’re pushing out there.” This shift means service providers must be vigilant not only about who their customers are, but also about the nature of the data and communications flowing through their networks.
The challenges of a unique regulatory environment
The UK’s regulatory environment presents its own set of challenges. Unlike other countries, there is no mandatory registration for telecommunications providers with Ofcom, which can lead to significant gaps in compliance awareness. Lee points out that, within the UK, there’s no need to register with Ofcom as there’s no such thing as a licensed telecommunications provider. This prompts Lee to ask the key question; “if they put out new regulations or new guidance, how do you know they’ve put it out?”
This lack of mandatory registration means that service providers must be proactive in keeping up with regulatory updates. Lee continues, pointing out how regulatory bodies may just publish new guidelines, shrug their shoulders and say “well, you’re a communications provider; you should be checking with us regularly and checking the sites regularly to know what to do.”
Yet people are busy running their businesses, and having the time to continually check for updates is “a bit of a utopian dream on Ofcom’s part.” Despite regulation being of high importance, it “can drift to the back in terms of budget, in terms of people focusing on it.”
Supporting compliance with practical guidance
Gamma’s approach to supporting partners is comprehensive. We don’t just inform you of regulatory changes – we help you implement them effectively. Lee advises on how knowing your customer is the biggest thing, and it goes beyond “just… carrying out the checks; it’s recording it because, at some point, Ofcom might come knocking at your door and say, ‘Where’s your proof?”
Ofcom may have been advised that due diligence has been carried out, but if one or two customers have been behaving badly, questions may start to be asked about your ability to document these key pieces of information.
This proactive stance ensures that Gamma’s partners are not only compliant but are also prepared for any scrutiny that may come their way. As Lee emphasises, “we’ll be putting certain rule sets in place that we expect you to follow, but not just rule sets – giving guidance on how we think you should be complying with things like Know Your Customer.”
Navigating One Touch Switch
The introduction of the “One Touch Switch” system in the UK is set to revolutionise how service providers handle customer switching. While this new system aims to simplify the process, it also introduces new compliance challenges. Lee explains that the this won’t just apply to residential and small businesses, “it’s across the board… it goes all the way through to enterprise.”
He further advises smaller providers to be cautious, giving an example of how a provider with five residential customers must either “get shot of them or convert them to business contracts.” Lee elaborates by saying that this provider may think “I’m never going to take on another residential customer because it just happened to be an acquisition I made”, they’ll have to lose them through One Touch Switch, so ultimately must sign up with One Touch Switch.
Gamma is committed to simplifying this process for its partners. Lee notes how Gamma is working on “things to help you do it more efficiently, but your provisioning services are exactly the same as they were.”
Balancing regulation and innovation
One of the most challenging aspects of the current regulatory environment is balancing the need for compliance with the need for innovation. Lee warns that stringent regulations can sometimes stifle technological advancement, because as soon as you have “really high-cost solutions that are barriers to entry, you can stifle innovation as well – bringing it to market.”
This tension is evident in markets like Germany, where stringent regulations have slowed mobile development. Lee explains that it’s possible to argue that “the German market is behind the curve from a technology point of view, but you might argue the regulation is stifling that to an extent.”
Gamma recognises the importance of finding a regulatory balance that allows for innovation without compromising on compliance. Lee points out that when creating a baseline that has a general interest in one specific area, “that baseline will almost certainly stifle innovation.” In his view, history will tell us that “here in the current world, telcos are largely struggling to innovate.”
Rebuilding trust in communication networks
As fraudulent activities increase, so does consumer distrust in communication networks. Lee emphasises the importance of rebuilding this trust, not just among consumers but also within businesses that use these networks. The goal is to “rebuild the trust within businesses who are given these numbers”, because once there’s trust in the numbers, that trust can be given to the end customer.”
Mike Mills, Gamma’s Director of Cloud and Infrastructure Partners, adds to this by noting the broader implications of declining trust in numbers. He observes that anyone receiving a call on their home landline from an unknown number would hesitate in answering. This underscores the need for service providers to take proactive steps in ensuring their networks are not only secure, but also trustworthy.
The future of compliance: collaboration and innovation
Gamma is committed to helping its partners stay compliant and thrive in a challenging regulatory environment. Collaboration is key to this effort, with Lee stressing how Gamma will “help point you in the right direction… help support you. But you still need to understand what your obligations are.”
Looking ahead, Gamma will continue to provide regular updates and practical guidance through newsletters, webinars, and direct communication. Lee concludes that “this is a dynamic area, so we’re committed to ensuring our partners are always in the loop.”
By offering comprehensive support and staying ahead of regulatory changes, Gamma strives to ensure that its partners are equipped to deal with the complexities of compliance while focusing on future growth and innovation.