Serving as an officer in the Israeli Military Intelligence Cyber Command taught Michael Reitblat all about malfeasance and equipped him to set up and be CEO of an online fraud prevention company, Forter, that, in milliseconds, blends artificial intelligence and human analysis to determine whether e-commerce purchases are legitimate.
The skills Reitblat acquired in the military translated as he turned to entrepreneurial pursuits. After leading product for fraud detection provider Fraud Sciences before and following an acquisition by PayPal, Reitblat founded Forter with two former Israel Defense Forces service members. Recognizing a gap in fraud prevention services, the veterans sought to build on their military training by applying advanced technology and analysis to e-commerce fraud, while improving the process of buying products and services online.
Overall, fraud is increasing, Reitblat says, estimating a 100% increase in the past two years as criminal organizations have become more sophisticated and fraudsters have migrated online given the U.S. rollout of chip-enabled credit cards.
Reitblat said he regularly challenges himself to develop new skill sets. He says a CEO needs to “learn fast, make sure he or she understands the overarching company strategy and build a good culture.”
Forter’s proprietary software immediately approves or declines every online transaction for its merchant clients. After four years of operation, Forter now processes over 1 billion transactions annually, Reitblat said. Fortune 500 retailers and pure play e-commerce merchants use Forter for fraud prevention.
According to Reitblat, in addition to stopping fraudsters from stealing goods and services from online retailers, Forter also prevents legitimate purchases from being accidentally identified as fraudulent. This frequent consequence of imprecise fraud detection loses e-commerce companies about $20 billion in sales each year, Reitblat said.
For example, if a customer is prevented from purchasing a sweater because they are flagged as a likely fraudster at checkout, they’ll likely spend their money elsewhere online instead, Reitblat said. This means the merchant will not only lose the revenue from that single sweater, but they risk losing the consumer permanently because of the negative experience he or she had.
Forter, which is based in New York City and has an R&D center in Tel Aviv, plans to triple its business next year, through continued domestic and international expansion and other growth strategies. Reitblat’s biggest impediment to achieving this growth is “finding the right people and making sure everyone works together.”
The tech market “is very competitive, and it can be difficult to find the right talent,” Reitblat said. “Great people want to work on solving hard problems with other great people.”
In Israel, one way Forter addresses this problem is by hiring talent right out of the Israeli Army. Over 50% of current Forter employees come from the Israeli Army Intelligence Unit where Reitblat started his career.
And Forter’s busiest day isn’t Cyber Monday because—according to Reitblat—“Fraud doesn’t stop.”