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Tips To Protect eCommerce Revenue by ClearSale Senior Director of Risk and Customer Success Bruno Farinelli

Tips To Protect eCommerce Revenue by ClearSale Senior Director of Risk and Customer Success Bruno Farinelli

Roberto Popolizio
In this interview series, Website Planet is talking to executives from the best online businesses, who share their stories and unique tips to create a successful online business like they did.

This time, I had the pleasure of talking to ClearSale’s Senior Director of Risk and Customer Success, Bruno Farinelli.

Graduated in statistics at one of the best universities in LATAM and with an MBA in Business Intelligence, Bruno Farinelli has extensive experience in risk management, analytics, and operations within the international business realm.

As the Senior Director of Risk at ClearSale, he oversees the efforts to optimize fraud prevention and customer success. He has a proven track record of designing successful strategies to achieve high performance and efficiency in multinational operations, plus he is a mentor for disadvantaged youth facing competitive academic environments.

To start, share your story with our readers. How did your professional journey begin, what challenges have you faced, and what achievements are you most proud of?

My path into the world of ecommerce and fraud prevention began with a strong educational foundation. After earning a degree in statistics from the prestigious UNICAMP university, I went on to receive an MBA in Business Intelligence from FIAP.

It was in 2012 that I joined ClearSale and began what would become an incredibly rewarding 12-year journey with the company so far. Over this time, I’ve had the opportunity to take on various roles that have allowed me to grow both professionally and personally.

The ecommerce landscape has transformed drastically during my time with the company, thanks to rapid technological advances and events like the COVID-19 pandemic which accelerated digital transactions exponentially. These shifts presented our team with the challenge of continuously evolving our fraud prevention approaches to keep pace with bad actors.

Fraudsters are constantly adopting new tools and tactics to exploit vulnerabilities. Staying ahead of their methods through our own innovative use of technologies like machine learning, AI and data analytics has been an ongoing practice to keep our customers safe and brands secure.

Some of my proudest moments have been the instances where our solutions prevented serious fraud attacks that could have crippled smaller businesses. Knowing we played a crucial role in those organizations’ long-term viability and success is incredibly satisfying. It’s emblematic of our mission to enable ecommerce to thrive securely.

What pain point(s) do you solve for your customers?

One of the most common forms of fraud affecting our clients is chargebacks and friendly fraud.

What is friendly fraud?
Despite its name, friendly fraud (or chargeback abuse,) is anything but friendly and occurs when a customer makes a purchase and maliciously claims it as illegitimate or fraudulent. The banks reissue the money to the customer, leaving retailers to bear the brunt.

Many online retailers are unaware of the ways chargebacks and friendly fraud can have massive consequences for their business, with pain points like loss of revenue, loss of customer trust, and chargeback fees.

According to the latest statistics, friendly fraud is a major and growing problem for merchants:
  • The 2023 Chargeback Field Report revealed that friendly fraud is a bigger concern than criminal fraud. Merchants said that an average of 44% of chargebacks were the result of friendly fraud.
  • Data from Visa similarly suggests that 75% of all chargebacks are likely cases of friendly fraud. 1/3 of the respondents committing friendly fraud claim to have filed a chargeback because they didn’t recognize the merchant’s name on their statement.
  • Chargebacks are causing more revenue and profit losses than ever before, with Americans disputing a staggering $83 billion in credit card charges in 2023.
Sources:
https://chargebacks911.com/chargeback-facts/
https://www.businesswire.com/news/home/20230530005331/en/2023-Chargeback-Field-Report-Friendly-Fraud-First-Party-Misuse-Skyrockets-to-Pandemic-Levels-Industry-Survey-Reveals

My team and I support our clients by designing strategies that lead us to reach record levels of approval and automatic decision rates along with very low levels of chargebacks, thus delivering the best results for our customers’ bottom lines.

What do you think makes your company stand out? What are you most proud of?

At the heart of our fraud prevention solution lies a distinct advantage – a multi-layered review process for high-risk transactions, overseen by a global team of highly trained fraud analysts. Unlike many fraud prevention companies that decline a majority of orders flagged as potential fraud, we adopt a more nuanced approach.

Our hybrid model seamlessly integrates cutting-edge technology with expert human review, ensuring that no legitimate order is wrongfully declined. This strategic combination allows us to minimize false positives, which can inadvertently damage valuable customer relationships.

Through our advanced secondary review process, our fraud experts analyze each transaction, applying their seasoned judgment to make precise decisions. This ensures that genuine orders are approved while fraudulent ones are identified and canceled before they can cause harm to retailers and legitimate customers.

From your experience, what are the 5+ most important things to build a highly successful online business? Please explain each in detail.

  1. Robust fraud prevention measures
    Online fraud is an ever-evolving threat that can critically undermine a business.Implementing advanced fraud detection capabilities with a blend of ML/AI models and human expertise is a great step businesses can take to keep up.
  1. Data-driven decision making
    Successful ecommerce hinges on leveraging data intelligently across all functions – marketing, merchandising, operations, and more.Investing in sophisticated data analytics, A/B testing, and user behavior tracking provides valuable understandings that can optimize strategies, identify opportunities, and detect risks in real time.
  1. Agile technology and innovation
    The expectations for a successful ecommerce business have shifted: an enterprise must be built on flexible, scalable technology that allows rapid innovation and iteration.Being an early adopter of emerging technologies like AI, IoT, AR/VR can create powerful competitive advantages for small and large enterprises.
  1. Aligned organizational culture
    While technology is crucial, people are the backbone of any thriving online business.Cultivating a culture of customer-centricity, collaboration, accountability and continuous improvement is key to finding success.
  1. Seamless customer experience
    Customer expectations are extremely high these days, especially from younger generations who are digitally savvy and look for more personalized experiences compared to Gen X and Boomers. A frictionless shopping journey from browsing to checkout to delivery is essential for driving conversions and loyalty.Minimizing false positives that unnecessarily decline valid orders is key, as is fast, responsive customer service when issues arise.
🚀 Curious how you can meet your customers’ changing needs?

ClearSale’s latest Consumer Attitudes Report on Ecommerce, Fraud, and CX 2023-2024 is a great resource to better understand your main demographics.

👇 To download the report, paste this URL in your browser 👇
https://offer.clear.sale/consumer-attitudes-ecommerce-fraud-cx-2024-intro

ClearSale

In your experience, which aspect of running a website tends to be most underestimated? Can you explain or give an example?

In my view, one of the most underestimated aspects of running a successful ecommerce website is the operational complexity behind the scenes.

On the surface, a great online UX seems deceptively simple – browsing products, adding to cart, checking out seamlessly. The truth is, those functions are only possible with an intricately choreographed back-end that works across inventory management, supply chain logistics, payment processing, fraud screening, customer service workflows and more.

I’ve seen several businesses invest heavily in marketing, web design and customer acquisition, only to be let down by operational shortcomings. Unfortunately, their online revenue goals get stopped short by technical debt, lack of scalability, fraud holes, the inability to integrate acquisitions cleanly, or simply fragmented and inefficient processes.

📈 Based on a study by Forrester Research, good UX design can raise a website’s conversion rates by as much as 400%, with higher conversion rates directly translating to increased revenue.

A survey on design projects conducted by Jakob Nielsen found that the average improvement in key performance indicators (sales, engagement, retention, etc. ) was 83% after investing in UX. It’s an 83% boost for a 10% investment in UX.

Sources:
https://www.elev8webstudio.com/the-roi-of-ux-investments/
https://www.elev8webstudio.com/the-roi-of-ux-investments/

What are the most common mistakes you have seen people making when starting and growing an online business? What can be done to avoid those errors?

Many online retailers tend to forget or neglect the risk of fraud when creating their website and launching their products. Sadly, having weak fraud defenses is devastating yet often underappreciated until it’s too late.

Implementing advanced fraud detection, authentication, and review processes before launching and scaling them as your business grows can be a make-or-break for your brand and your customer relationships.

Many online businesses neglect to monitor the internet and social media channels for cyber threats such as phishing, fake social networks, data leaks, counterfeit products, and other scams. Online fraud and scams are increasingly common. In fact, more than 150 million people suffered from phishing in Brazil alone in 2021, and more than 815 million sensitive corporate data files were exposed in the same period.

💡 It is crucial to monitor your brand’s digital reputation and avoid financial damage

One service that can help retailers monitor for fraud and impersonations is Brand Protection by ClearSale, which seeks, identifies, reports and handles takedowns for all types of threats from various sources:
  • Phishing: fake page URLs
  • Applications: iOS and Android
  • Social Media: Facebook, Instagram, Twitter, TikTok, Youtube, Linkedin, among others
  • Antipiracy: Free Market, OLX, Shopee, FB Marketplace, Magalu, Americanas, Virtual Stores, among others
🔎 To learn more about Brand Protection by ClearSale and how it can save your company revenue and customer trust, copy-paste this URL in your browser:

https://www2.clear.sale/brand-protection-by-clearsale

Based on your experiences, what trends and technologies are currently underestimated but have the potential to significantly impact your industry?

We’re really just scratching the surface of AI’s potential across the ecommerce landscape, and it’s exciting to see what potential opportunities lie ahead. On the CX front, AI is a game changer for delivering the seamless, personalized shopping journeys that modern consumers increasingly expect. By analyzing massive datasets on browsing behaviors, purchase histories, and stated preferences, AI allows retailers to truly understand each shopper’s unique tastes and needs at an individual level.

But AI isn’t just powerful for the front-end experience, it’s also proving to be an essential tool in the fight against ecommerce fraud. At ClearSale, we’ve had immense success leveraging our proprietary AI systems that can ingest and analyze hundreds of data points about each transaction in real time to find potential fraud with incredible accuracy.

“Working with ClearSale has allowed us to drastically reduce our risk of financial losses, avoid the need to hire more staff to review orders, and increase our confidence because we know that we’re protected.”
Ricardo Calderón, Head of Operations, Digital Commerce & Customer Experience at Style Store

The key is using AI to elevate and augment human expertise, not replace it entirely. Our teams of seasoned fraud analysts work in tandem with the machine inputs to make final determinations on high-risk orders.

So whether it’s crafting exceptional personalized shopping experiences or improving fraud defenses, I believe AI and machine learning are massively underestimated forces that will only grow more integral to long-term ecommerce success. Businesses that invest in these capabilities now will be far ahead of the game in years ahead.

How can our readers follow your work?

Website: https://www.clear.sale/

LinkedIn: https://www.linkedin.com/in/brunofarinelli/?locale=en_US

X: @ClearSaleUS

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