Fighting Fraud with a London Business School Alumnus

An executive MBA program at London Business School (LBS) gave Nuno Sebastião the strategic thinking needed to turn his entrepreneurial idea into a reality.

In 2007, Feedzai was a concept to fight fraud. Today, it is a profitable business with 180 employees, offices across Europe and the US, and US$36 million in venture capital. Its technology works by using big data and artificial intelligence (AI) to identify fraudulent payment transactions.

Nuno Sebastião used to work as a product manager with the European Space Agency, where he helped shoot billion-dollar space probes into orbit. He hopes Feedzai will impact on the planet on a similar scale.

What’s the best thing you got from business school?

Other than all the skills and education, London Business School was how I gained access to global venture capital and a network that really helped to turn Feedzai from an idea into a high-growth reality. For instance, at LBS I met Keith Willey, himself a successful entrepreneur, who is giving back as a professor at the school and now sits on Feedzai’s board.

London also turned out to be a great seeding ground, which brings so much diverse talent together.

How does Feedzai work?

Feedzai is pioneering a kind of attainable AI that’s easy to use and accessible. This has only been possible in the last few years because of something I’m calling the ‘AI convergence’. Very recently, multiple distinct threads of technology have come together in a perfect storm: Processing techniques, better hardware, data storage, big data, and algorithm technology. Add these up and you have something that wasn’t possible before: AI like a utility, like running water.

Who are your customers?

Right now, Feedzai is mostly working with large banks and global retailers, but the platform really makes sense for anyone that has a lot of transactions or other data that needs to be kept safe, and we are growing quickly.

More than US$3 billion in payments volume goes through our platform every day. Feedzai is still in the early days here, and we believe that we are just starting to scratch the surface of the impact we can have on global banking and commerce.

How is the EMBA curriculum relevant to entrepreneurs?

There’s been a lot of debate lately about the usefulness of an MBA in an increasingly entrepreneurial world, but the global strategic thinking I gained from London Business School has been really important in Feedzai’s ability to scale up quickly. We now have offices across Europe and the US.

Also, it’s a huge differentiator to be able to take all this technical expertise and talent, and overlay a very broad business framework that utilizes finance, marketing, operations, and all of the other great things we learn in the [executive] MBA program.

We’ve seen some extremely damaging cyberattacks recently. What are the risks for businesses?

In one study by the Association of Certified Fraud Examiners, the potential global cost of fraud was estimated to be US$3.5 trillion, which is about the total GDP of Germany. Yet the biggest risk is that businesses react in a way that ends up harming loyal customers while trying to block criminals.

Making things hard for fraudsters and easy for customers: These two goals have often been at odds with each other. But that’s exactly what Feedzai is focused on. Thanks to the dawn of attainable AI, we’ve created a system that’s fast enough and smart enough to accomplish both.

AI has been given a bad name by economists who fear mass job losses. What would you say to its critics?

AI is about augmenting human potential, not limiting human capital. Machine learning helps companies and their employees to use the mountains of data they are constantly gathering to optimize their business, and keep their customers safe. We don’t see this as a kind of automation that replaces the need for people to keep working. We see it as a means for companies to optimize and expand upon their employee’s skills, so that they can continue to grow.

You’ve got a background in the space industry — how does that come into play?

I started my career at the European Space Agency [ESA], working on the development of the agency’s ‘Satellite Simulation Infrastructure’, which led to the production of the Rosetta comet-chaser space probe.

When you’re shooting a billion-dollar object into space, you only have one chance to get it right, so it was important to create perfect simulations of the rockets. There was a lot of strategic decision making and risk management that went into the simulations, which has lent itself well to what Feedzai is doing.

When I told my family I was going to quit my job at the ESA to pursue this wild idea, everyone told me I was crazy. But I said I was doing it anyway. That’s the moment I became an entrepreneur. Most kids want to be astronauts when they grow up, and much of that is because they want to discover new frontiers and help to change the world — but we think that’s what we are doing with artificial intelligence and Feedzai.