Today we have Nuno Sebastiao from Feedzai.
Feedzai fights fraud and offers the most advanced fraud prevention platform powered by machine learning and big data. Their mission is to make commerce safe for business customers.
Let’s find out more, our questions are in bold.
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Who are you and what’s your background?
I’m Nuno Sebastiao, Co-Founder and CEO of Feedzai. Before Feedzai, I led the development of the European Space Agency (ESA) Satellite Simulation Infrastructure.
I met my Co-Founders Dr Paulo Marques and Dr Pedro Bizarro at the University of Coimbra in Portugal. At the time I’d been working on simulation models at the ESA, while Paulo and Pedro were both faculty at the University. Paulo was researching distributed systems and Pedro was building real-time systems. We soon realized each of us were holding a different piece to the same puzzle and decided to start Feedzai.
What is your job title and what are your general responsibilities?
I am the CEO of Feedzai. We’re incredibly lucky to have a team of hugely talented and high performing individuals at the company who’ve joined us from the likes of Amazon, Visa, Accenture and PayPal. My responsibility to my team is to aim for what seems like impossible goals and to ensure our people have all the resources they need to succeed as well as the tools to constantly innovate and challenge the status quo.
Can you give us an overview of your business?
What Amazon, Netflix and Facebook do with artificial intelligence and machine learning for their respective businesses, we use to fight fraud and manage risk across the entire payments ecosystem. We are data agnostic and work across the entire commerce ecosystem and across all payment types (mobile, card, om-store, online, etc.) including cryptocurrency like Bitcoin.
Our technology identifies trends and patterns and predicts whether a transaction is good or bad, and if it matches the profile of the customer or merchant. In some cases, all of that processing can be achieved within 2 milliseconds. We can then advise merchants, acquirers or issuers whether or not to process a payment. We currently handle over $1BN a day in total payments volume.
The advantage of our machine learning technology is that the more data our platform processes the more we’re able to learn and improve, offering our customers much greater accuracy and precision.
Tell us how you are funded.
We have raised over $25M to date and secured $17.5M in our most recent Series B financing round last May. Oak HC/FT led the financing, along with existing investors, Sapphire Ventures and Espirito Santo Ventures.
Why did you start the company? To solve what problems?
Feedzai is all about fighting fraud. This cause is fundamental to our DNA and our raison d’être.
Commerce is undergoing a tremendous shift from physical to digital. Today around $30 trillion is moved through electronic payment and each year nearly $16 billion is lost to fraud. This is a huge problem, both in terms of the sheer volume of fraud and the value of business lost due to concerns over fraud and payment security.
With transactions rapidly migrating from the physical world to omni-channel commerce we saw an opportunity to make use of the deluge of data generated across all dimensions of the marketplace. Feedzai makes sense of commerce omni-data at scale, in real time using AI and machine learning. In the past, protecting commerce relied on people reviewing orders manually. At Feedzai we automate this process by aggregating and correlating omnidata and then provide a finer level of analysis and granularity.
Who are your target customers? What’s your revenue model?
Our customers are banks, payment providers and retailers across the globe who use our technology to reduce risks associated with banking and shopping – whether in person, online or via mobile devices.
Our revenue model is similar to many companies in this space – based on a “per transaction” or volume basis.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?Some of the regulations in place today that govern financial services were designed for a different era. We’d like to see more collaboration between regulators and innovators.
What is your message for the larger players in the Finance industry?
Financial services organisations haven’t traditionally thought of themselves as being in the business of data, which is deeply concerning considering how quickly technology is evolving. Criminals working in well-organised and coordinated packs are using increasingly sophisticated and complex technology to commit fraud and making it harder for the banks, retailers and payment providers to detect.
However, the quantum leap in computing power, connectivity, bandwidth, and memory storage—combined with the explosion of big data—is enabling FS organisations to more effectively combat fraud. AI and machine learning technologies which used to be available only to large corporations like Google, Amazon, and Facebook, employing teams of data scientists are now an option for FS organisations who have traditionally been slower to embrace new technology.
Now is the time to start thinking of the financial services industry as a “data services” business—after all, our money is no longer stored in bank vaults but instead held as bits and bytes of data.
What phone are you carrying and why?
iPhone 6. It just works and I didn’t have to read an onerous owner’s manual.
Where do you get your industry news from?
PYMNTS.com, Paypers, Techcrunch
Can you list 3 people you rate from the FinTech sector that we should be following on Twitter?
Patrick Gauthier: @prgauthier, Amazon Payments VP.
Jonathan Weiner: @jonathanweiner, Founder of Money20/20.
Steve McLaughlin: @FTPartners, Founder & CEO of Financial Technology Partners.
Can you suggest the name of an Angel Investor or VC that might be interested in being profiled?
Patricia Kemp, General Partner, FinTech, OAK HC/FT
What’s the best FinTech product or service you’ve seen recently?
We’ve been watching the peer-to-peer lending space and believe the sector has huge potential. In particular amongst verticals previously thought immune to disruption but are now being shaken up by digitally savvy start-ups capitalising on big data and 24/7 connectivity. One company that has caught our eye is Autofi.com which is changing the way you finance a car.
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?Artificial intelligence will continue to be a major enabler, making our lives “smart-based” instead of “data-based”. As AI becomes more advanced, the technology will become less “blackbox” – machine to human conversation – and will instead need to be underpinned by “whitebox” AI i.e. built with interfaces that have a semantic layer, which demystifies the underlying machine logic for humans.
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