Exploring Loopholes in the Cellular Industry Contributing to Cyber Financial Crimes: A Qualitative Case Study in Faisalabad, Pakistan

Abstract

Since the inception of internet use and mobile technologies, the incidences of cyber-financial crimes have also increased. In this study, the authors attempted to explore the prevailing loopholes in the cellular companies and telecom sector. This study was qualitative in exploring the in-depth probing of the loopholes. This study was conducted in the district of Faisalabad of Punjab province, Pakistan, where the investigating agency deployed 16 investigation officers. These 16 officers were interviewed face-to-face using a validated interview guide. Thematic analysis technique was applied to the collected data using Nvivo software. The results of the study are presented under different themes. Results summarized that significant weaknesses exist in regulating and overseeing SIM activation and distribution, allowing unauthorized agents to operate with minimal accountability. Poor biometric verification processes and insufficient record-keeping practices increase the risk of SIM-based fraud, enabling cybercriminals to exploit these gaps. These regulatory gaps and operational weaknesses in the telecommunications sector create risks for branchless banking systems and broader public security. This study suggests implementing stricter controls on franchise operations, enhancing biometric verification standards, and improving data reporting to the Pakistan Telecommunication Authority (PTA) to prevent fraudulent SIM activations and curb cyber financial crimes.

Keywords: cyber crimes, financial crimes, telecommunication, mobile, internet, cellular networks