The research reveals trust in traditional channels is diminishing, however they’re still the best way to engage with consumers
London, United Kingdom, 7th February 2024 – XConnect, a Somos Company, the provider of world-class numbering intelligence solutions has launched a report with Mobilesquared, a leading provider of intelligence in the mobile sector, revealing that Communications Platform as a Service (CPaaS) providers are losing trust in SMS, dropping by 24.9% between 2023 and 2025. In contrast, trust in Rich Communication Services (RCS) is predicted to leap to 75.1% and to 41.7% in WhatsApp over the same period.
The report, ‘Do We Still Have Trust in Communications?’, found that SMS was not impacted in the short-term by increased levels of fraud in 2023, but it will significantly impact the channel in the long term unless action is taken by the messaging ecosystem.
Mobilesquared conducted a survey of 59 CPaaS providers across the globe on behalf of XConnect between July and November 2023. To refine the research process, XConnect focused on the top 5 CPaaS channels as identified in its 2022 research: SMS, WhatsApp, email, RCS, and voice (SWERV).
The research found that in 2023, traditional channels (SMS, email, and voice) accounted for 70% of trust, but by 2025 this will drop to around 50%, with 50% of trust attributable to RCS and WhatsApp. SMS was the top channel for 2023, with its usage almost double that of the next channel (email), and almost three-times greater than voice and WhatsApp.
“The SMS ecosystem has faced numerous challenges over the last 12 months, with concerns raised over the risks of impersonation and increasing costs. Despite this, the research shows the pragmatic view that SMS remains the most engaging and effective messaging channel and the market should consider the value and risk of the alternatives,” said Tim Ward, Chief Strategy Officer, at XConnect. “Enabling these providers to manage termination rates, manage traffic delivery accurately and handle fraud is critical to maximising revenues and profits. That’s where XConnect can step in to provide part of the solution with our number intelligence.”
According to Mobilesquared’s findings, most brands and enterprises use SMS for every use case (alerts, marketing & promotions, reminders, and security), compared to just over two-thirds that use email for every use case, and around half of brands and enterprises for the remaining three channels (voice, RCS, and WhatsApp). Effectiveness remains the top factor influencing a brand and enterprise’s communications channel selection, ahead of the potential threat from fraud.
“The biggest fear expressed by the CPaaS industry throughout 2023 was that SMS fraud was closely following in the footsteps of voice fraud. Smishing/phishing is viewed as the fraud that will have the greatest impact, ahead of artificial inflation/generation of traffic, and grey routes,” said Nick Lane, Chief Messaging Officer, at Mobilesquared. “This is by no means the end of A2P SMS, but to delay its regression, it will need to urgently tackle fraud in the short-term. CPaaS providers must take proactive measures to mitigate fraud within the channel to move the industry forward.”
CPaaS providers now expect fraud to increase in the coming years, as opposed to decreasing based on the 2022 research. They now expect 8.1% of their customer’s CPaaS spend to be lost to fraud, up from 4.75% previously.
Download the full report here to learn more.
Mobilesquared wrote the book on business messaging intelligence. Literally.
We launched in 2007 with the aim of delivering exceptional mobile marketing intelligence. In 2010, our ‘Conversational Marketing’ report was the first ever to take a deep dive into the emerging global business messaging sector and our insights have been shaping the market ever since.
We’re trusted by leading brands including Cisco, Meta, Orange, PwC and Vonage, to deliver reliably accurate insight (no overhyped projections here).
Fast forward to 2024 and we’re recognised as the leading global provider of messaging intelligence, and are regularly invited to speak as keynote analysts at the major messaging events including SMS World, WAS, Mobile Ecosystem Forum, World Telemedia and Mobile World Congress.
And if our name sounds familiar, it might be because we’re also the people behind the most quoted stat in mobile marketing: “90% of SMS are read within three minutes”.
Contact us at firstname.lastname@example.org to talk about how we can help with your messaging strategy.
XConnect, a wholly owned subsidiary of Somos Inc, consolidates, maintains and delivers trusted telephone number intelligence to world leading telecommunication service providers. It processes information from hundreds of different global datasets and ensures that customers solve routing, validation and fraud challenges in real time.
XConnect’s Number Information Services are used for voice and messaging routing, fraud protection and to identify and validate insights. They also support the deployment and evolution of next-generation communications, such as VoLTE and RCS.
Its service is accessed through its global distributed hybrid cloud platform using simple, secure, scalable real-time protocols and APIs.
Learn more: https://www.xconnect.net/