As many new consumer behaviors took shape during the pandemic, the sneaker industry took off online, bringing with it many first-time online shoppers as well as an unfortunate increase in fraudsters.
At the 2021 FN CEO Summit, Noam Nishry, director of account management at Riskified, spoke about the importance of staying ahead of fraudsters who have more than one way of disrupting e-commerce and who can cause retailers to lose big. In fact, overall, the retail industry loses billions of dollars from outdated banking systems and legacy fraud solutions.
Notably, Riskified’s over 2,000 clients include many Fortune 500 companies, such as Gucci, Farfetch, Foot Locker, Canada Goose and Matches, and processes over 2 million transactions daily.
According to Nishry, the challenges that fraudsters bring to a retailer are varied, with fraudsters often doing credential checks, address changes or rerouting once they have gained access to a consumer’s account. The key, he said, is to have high-end technology and be able to make accurate decisions.
“If we look at what we do at Riskified, the first step is to collect a lot of data from the merchant at checkout,” said Nishry. “We take that data, we enrich it with external sources such as social media, and then we have a very complete picture of both the order and the customer. We link that to our merchant network because we want to see whether any of those data points fit with any of the existing data that we have in our network. Then, a machine-learning algorithm is able to find the right patterns and be able to tell us what’s good and what’s bad, ultimately giving us a decision.”
To illustrate, Nishry walked the audience through an example where Riskified worked with an Italian luxury fashion merchant that was previously using manual review for orders, seeing low approval rates and high chargeback rates. In fact, 56% of the merchant’s orders were being sent to manual review. With Riskified, the process was enabled to be fully automated, resulting in a significant decrease in chargeback rates and an 88% increase to approval rates.
“Being able to approve many more orders is basically what you should be expecting to do, even with the challenges that were taking place,” Nishry explained. “Because [with Riskified], you are able to provide accurate, instant decisions and fulfill your orders.”
FN CEO Summit sponsors include presenting sponsor PayPal and event sponsors Aetrex, Caleres, FDRA, K-Swiss, Riskified, SkyPad, Sperry, Two Ten and Zappos.