The Future Is Now: Assaf Feldman Of Riskified On How Their Technological Innovation Will Shake Up The Tech Scene
An Interview With Fotis Georgiadis
I wish I didn’t believe for so long that managing people wasn’t my thing. In fact that’s partly why I chose to work for a lot of small places where there wasn’t much of a management need. It was only when I started my own company did I really develop my own management style and unexpectedly discovered that I had a real knack for it. I’ve learned that if you truly want people to work as a team, the leadership has to embody that before it can be reflected at all different levels of the company.
As a part of our series about cutting edge technological breakthroughs, I had the pleasure of interviewing Assaf Feldman.
Assaf is the CTO and co-founder of Riskified. He leads the Product Development and Technology teams.
Under his leadership, Riskified has built an eCommerce risk management platform with proprietary machine learning models that drive an automated decisioning engine supporting its eCommerce risk mitigation suite of products.
Assaf brings two decades of experience developing robust systems with ML algorithms and intelligent UIs for risk management applications.
He was selected to be a research scientist for the Ambient Intelligence group at MIT’s Media Lab.
Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?
I went to college to study film and computer science. After graduating, I worked as a product manager and programmer. I later went to MIT to study data science and started to integrate that into my programming. This varied career path has shown me the value of interdisciplinary learning — over the years, it’s allowed me to pick up a lot of different skills, develop a creative approach to problem solving and seek out collaborative ways to work with colleagues.
Before Riskified, I was working at a startup called BillGuard, which was where I met my Riskified co-founder Eido Gal. We got along very well. We both understood the problem of eCommerce fraud and had different, complementary strengths. Eido knew the business side of the problem and I was well-versed in the tech skills needed to solve it. In our conversations, he would frequently come with the what and I would come with the how.
Can you share the most interesting story that happened to you since you began your career?
It was early in my career. I had decided against working in film but wasn’t fully enjoying programming because I felt that my creative side was unfulfilled. Then I began working as a programmer with a studio in New York specializing in user generated media and content. We worked on a project for MTV that eventually went to the Museum of Moving Image in Queens. During that process, I learned that I didn’t have to give up my creativity as a programmer. It’s also ironic that the project that got me closest to fulfilling my film ambitions was the one where I worked as a programmer.
Can you tell us about the cutting edge technological breakthroughs that you are working on? How do you think that will help people?
Before Riskified, the main solutions that eCommerce merchants used were legacy rule based solutions or scoring solutions. These are imprecise and often turn away legitimate transactions. We pioneered the chargeback guarantee model of fraud prevention, which means that if Riskified approves a transaction that turns out to be fraudulent, we are held liable for the transaction, not the merchant. This aligns Riskified’s incentives with the merchants and pushes us to be as accurate as possible.
With our machine learning models, we can approve more transactions for merchants while still enabling them to provide a seamless experience for shoppers. In order to do that, our models have to be very precise. When we first started, that kind of precision did not exist in the market.
Nine years later, not only have we shown that our business model is viable, we’ve expanded beyond fraud management to be a comprehensive risk management solution. Our platform protects customer accounts, rescues orders from bank declines and helps merchants enforce store policy. We also deliver huge returns on investment for merchants. Some merchants using Riskified see more than 20% increase in sales approvals and over 60% reduction in fraud-related costs.
But it’s not just about increasing revenue, Overall, our platform makes eCommerce safer and more accessible. Lots of legitimate customers get falsely declined because of outdated, legacy fraud management systems. Our platform not only prevents fraud but allows more good customers to access eCommerce and participate in the global economy.
Keeping “Black Mirror” in mind, can you see any potential drawbacks about this technology that people should think more deeply about?
The question Riskified has to answer for merchants is this: is the person behind each transaction the actual, legitimate card owner? To solve this problem, we have to work with a lot of customer data. I’m constantly amazed by how much information exists out there and understand exactly how much damage can be done when bad actors use that data for unscrupulous ends. Companies need to take data privacy seriously, which is why Riskified protects its customer data ferociously. It also behooves regulators to make sure something like the Cambridge Analytica scandal doesn’t happen again.
Was there a “tipping point” that led you to this breakthrough? Can you tell us that story?
One of the most effective ways we demonstrate our value to merchants is to go through their declined transactions and identify the portion that’s actually legitimate. When we first started doing this, we found that on average, we could approve 50–75% of what merchants used to decline or were afraid to approve. This floored us — we assumed that market inefficiencies were there but didn’t think it was this bad.
Outdated fraud prevention solutions meant that merchants were missing out on full percentage points of sales and that huge swathes of legitimate customers were being shut out of the global economy. It strengthened our conviction that there was a huge problem that we needed to address and that we could also successfully solve it for merchants.
What do you need to lead this technology to widespread adoption?
At the beginning, we worked really hard to educate merchants about false declines, showing them that the danger of having an outdated fraud management system wasn’t just fraud, but the number of good transactions that were left on the table. We began working with small and medium merchants, but as word spread, larger enterprise merchants began to seek us out.
We entered the market at the right time — a lot of organizations were realizing that they needed to find more efficient ways to deal with fraud prevention and they saw Riskified as a growth tool. Nine years on, we count many Fortune 500 companies as our clients, and the entire eCommerce market is embracing machine learning in risk management. The next step is continuing our geographical expansion and continuing to pursue the application of our solutions in emerging verticals like cryptocurrency.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
My family has been a source of constant support — from my parents to my spouse to my children. My mother was an early source of inspiration. She ran her own business back in the 70s and 80s when women-owned businesses weren’t as common in Israel. My parents have always encouraged me to explore different areas of interest, and really fostered my sense of interdisciplinary thinking before I even realized what it was.
My children are my driving force. I went to MIT right around when they were born, and to this day they challenge me to constantly better myself. And my wife is my rock. Throughout our careers we’ve always given each other time to pursue our ambitions and made sacrifices for each other. I couldn’t ask for a better partner.
How have you used your success to bring goodness to the world?
When we conceived the company, we knew we wanted to make a positive impact in our communities.We established our CSR program early on and our employees have really embraced it. Last year, despite the pandemic, In 2021, nearly a quarter of Riskified’s employees spent over 1,200 hours volunteering in over 50 CSR projects in support of 30 nonprofits. We support a broad range of causes, from environmental conservation working to providing entrepreneurship training and educational programs to students. Our employees have even created their own programs to give back. Our research team spearheaded and taught an R coding course for frontline doctors on the fight against COVID-19, with the goal to help them more quickly and effectively analyze medical data.
Recently following our IPO, we realized the proceeds from our stake in Tmura, which is a foundation that aims to increase the Israeli tech community’s involvement in the nonprofit world. It receives equity donations from companies and uses the proceeds to fund education- and youth-related nonprofits operating in Israel. Riskified’s equity stake in Tmura generated $2.5 million that will be used to support a number of diverse nonprofits and projects over a seven-year period. Our donation broken the record for largest Tmura donation to date.
What are your “5 Things I Wish Someone Told Me Before I Started” and why.
I wish I didn’t believe for so long that managing people wasn’t my thing. In fact that’s partly why I chose to work for a lot of small places where there wasn’t much of a management need. It was only when I started my own company did I really develop my own management style and unexpectedly discovered that I had a real knack for it. I’ve learned that if you truly want people to work as a team, the leadership has to embody that before it can be reflected at all different levels of the company.
Through Riskified, I’ve been able to build the kind of company and culture that I always wanted, one where people aren’t siloed, and where everyone puts their egos aside to collaborate and solve some of the most complex problems facing eCommerce.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would do something around interdisciplinary STEM education. For a period of time, I worked as a lecturer in art school, teaching tech to art students. It was incredibly rewarding to pair STEM learning with art literacy, and demonstrate that there’s a lot of creativity in the sciences. I also try to infuse interdisciplinary thinking into what we do at Riskified.
Some very well known VCs read this column. If you had 60 seconds to make a pitch to a VC, what would you say? He or she might just see this if we tag them 🙂
We went public last year, a huge milestone that was the culmination of many years of hard work. I still remember what it felt like during the early stages of Riskified when investors were skeptical of whether our business model would work, and how that pushed us to deliver results to convince them and merchants that fraud prevention could be done in a new way. VCs should seek out startups that aren’t afraid to fundamentally change the way things are done in their industry.
How can our readers follow you on social media?
You can follow me on LinkedIn and also follow Riskified on LinkedIn, Facebook and Twitter.
Thank you so much for joining us. This was very inspirational.
The Future Is Now: Assaf Feldman Of Riskified On How Their Technological Innovation Will Shake Up… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.
