Automating Bank Disputes to Build Trust – Fatemeh Nikayin

Episode Overview

Dr. Fatemeh Nikayin is the Co-founder and Chief Growth Officer of Rivero AG, a Swiss fintech company dedicated to modernizing and streamlining payment operations for banks. With a robust background in payments and research, she has international experience in consulting on banking digitalization projects. Before founding Rivero, Fatemeh served as a researcher and lecturer at Delft University of Technology, where she focused on the Internet of Things and digital platforms. Her transition from academia to the fintech industry began in 2014, when she started advising banks and issuers across Europe on various payment topics and projects. This experience provided her with deep insights into the challenges and opportunities within the payment domain, ultimately leading to the inception of Rivero in 2019 alongside Thomas Müller.

At Rivero, Fatemeh oversees the growth domain, encompassing sales, marketing, and partnerships. Under her leadership, Rivero has developed two flagship SaaS products: Kajo, which assists banks in managing compliance with payment networks, and Amiko, which streamlines fraud recovery and dispute processes. These solutions have been adopted by several banks and card issuers across Europe, reflecting Rivero’s commitment to enhancing operational efficiency and customer experience in the financial sector. In January 2024, Rivero secured $7 million in a Series A funding round to accelerate its global expansion, with Fatemeh playing a pivotal role in articulating the company’s vision to investors.

Beyond her executive role, Fatemeh is an active contributor to discussions on regulatory technology and the application of artificial intelligence in banking. She has written on the impact of Large Language Models (LLMs) on compliance and risk management, emphasizing the need for a balanced approach to integrating AI in regulated industries. Her thought leadership extends to various platforms, where she shares insights on the evolving landscape of fintech and the importance of aligning technological innovation with regulatory requirements. Fatemeh’s multifaceted expertise and commitment to advancing the financial technology sector continue to position her as a leading figure in the industry.​

Episode Transcript

Fatemeh Nikayin: If you want to build a SaaS solution these days. Software as a service. Convince the Bank to move to cloud in the first place, and also not be able to guarantee that the customer’s data is safe. Then, then you will have problems selling your solution. And what helped us was to be able to offer a SaaS solution, which comes with all the advantages of easy integration, quick onboarding, but at the same time ensure banks that all the important data related to customers stay on their site so that they can trust us to use our platform.

 Kevin Rosenquist: Hey there and welcome to Pay Pod, where we bring you conversations from the trailblazers shaping the future of payments in fintech. My name is Kevin Rosenquist and thanks for being here. Chargebacks and payment disputes have been a headache for businesses and financial institutions for decades. As transactions become more digital and fraud grows more sophisticated, the need for smarter, more automated solutions has never been greater. And my guest today is Fatemeh Nikayin, co-founder and CEO of Rivero AG, a company using AI to revolutionize how payment disputes are managed. In this episode, we break down the hidden inefficiencies in the payments ecosystem. We explore the role I can play in reducing fraud and chargeback abuse, and discuss the customer experience and how banks are adapting to changing needs and demands. So joining me now all the way from Zurich,  Fatemeh Nikayin. So most people don’t think about the infrastructure behind payment disputes until they have to deal with one themselves. What are some of the biggest inefficiencies, if you will, in the way disputes are currently handled?

Fatemeh Nikayin: That’s a very good question. So,  when we started Rivero, we were actually thinking about different areas of payments that we can potentially tackle.  and payment disputes came up to be a topic that got our attention.  and the reason for that is basically,  two sides of it. One is the cost.  the increasing costs for banks, because disputes were not very popular maybe ten years ago or even earlier than e-commerce was not yet,  on the level that we have as of today.  so the processes that banks they have in place to manage,  this part of the process is pretty much manual.  and that’s why it’s becoming more and more costly.  and the second part to it is,  and that we actually think is quite important, and if not as important as the first part, is the customer experience.  When we talk about customer experience, we usually talk about onboarding experience or when you do a KYC.  but we don’t talk about customer experience during moment of distress. So when I open my app and I see, for example, some transactions that I know I haven’t done,  I think those are the moments that banks can really create trust with their customers.  and as of today, most banks, they, are not in place to offer a very good customer experience when it comes to payment disputes.

 Kevin Rosenquist: And that’s a really good point because that, that is people at their most,  nervous, if you will, like, oh God, someone’s got my card. They’re charging. I mean, that’s something that’s a nightmare. You know, nobody wants to ever have to deal with that. And to your point now, with all the e-commerce, it’s not just you lost your card or. Someone stole your card like it once was. I mean, they can easily get your number from other, other ways. So yes you’re right. That’s a perfect opportunity for a bank or a financial institution to to talk to someone, to calm someone down and really build their trust.

Fatemeh Nikayin: Exactly. And then,  if you think of it,  these days, everyone has multiple credit cards in their wallet, right? So once you build that,  good experience with or build that trust with your customer, and they have a good experience when something goes wrong, the next time they’re going to make that high value transaction, they’re going to pick the cards that they had. The great experience with,  and that’s why we also think, like, if you think of good customer experience in disputes, you also can,  can think of, you know, positioning your cards or top of wallet type of concept. You want to be that card or that payment method that the customer picks for the next important payments.

 Kevin Rosenquist: Absolutely. And why? Why has this problem been hard to solve? What do you think?

Fatemeh Nikayin:  I wouldn’t say it was hard to solve. It didn’t get enough attention because of disputes or fraud. They were not that,  that much of a pain point. Maybe ten years ago or 15 years ago.  so the existing processes, manual processes would still work.  but these days we talk about banks operating in multiple countries.  They have to manage customer service in different languages. So even if you have a dispute,  people sitting here in Zurich speak maybe four languages to support only the Swiss customers.  Let’s imagine you also have customers in Asia. It’s very hard to hire people that can manage all sorts of languages. And that’s very important in the dispute process.  so, ye  like going to different geography, increasing costs because you have more volume to process.  makes it even more important these days to start,  solve this problem.  I also think maybe, maybe another way to look at it is that payments were not very strategic 15 years ago for banks. So as a bank, you want to offer some payment methods to your customers. But your main business is giving loans and mortgages, right? So you outsource most of your payments processes to third party providers.

Fatemeh Nikayin: And what third party providers do, they offer one solution that fits all to everyone.  Every bank. And then you end up in a situation whenever you want to innovate. When it comes to this type of thing, you are relying on your service provider. And that service provider provides the same for all the banks. So it makes it hard to bring new features,  differentiate because as soon as you bring something, all other competitors also bring it.  So there are a lot of different factors. And nowadays, you see payments are becoming more strategic. You have  challenger banks like N26, they start the whole bank with the concept of payments, and then they are building other products on top of that. But then with that first offering, which is a card, they start building that relationship, customer experience, trust, and then they start venturing into other areas of banking. So that’s why we think payments are becoming more strategic. Banks care more about the experience of their customer and they want to differentiate. And all these factors end up with players like us that we want to help banks to really modernize this part of the business.

 Kevin Rosenquist: Do you think that banks are paying more attention to the customer experience because they classically didn’t do a good job with the customer experience, or is it more that the customer expectations and demands have changed?

Fatemeh Nikayin: I think more of the experience, the expectation of the customers because. Maybe ten years ago, most banks would give me similar products. And I didn’t even think of being able to do something quickly in the app, rather than going to the banking portal or even go to the branch. And nowadays you have a lot of different options. Opening a bank account can be done in a few minutes, and all these things create a bit more competition in the market.  Also, customers are more aware of their rights. For example, if you think of disputes domain, I know that, for example, in the US,  consumer awareness about their,  their rights when it comes to fraud and dispute,  has been always,  a bit more advanced than in Europe because cards were more popular payment methods,  already for quite some time in the US, but here in Europe now, also more and more customers are being aware of that, right? That, oh, if something happens, if I don’t receive a product that I order online, I can go back to my banks. And maybe the whole pandemic also accelerated that awareness, because many people had to go to their bank dispute, a flight or a hotel booking that they have done.  and as a result of that, then you realize, well, first of all, customers know what they should get. And second, competitors are constantly innovating.  So that’s why banks are starting to look into how to digitalize a lot of these processes, and how to provide better customer experience.

 Kevin Rosenquist: It’s an interesting thing with fintech.  This is a question I like to ask,  people because, you know, friction is something that is not what you want. You know, you don’t want friction for the customer experience. You don’t want people to have to jump through hoops to get what they need, where they need. But you also need to be very careful with privacy, with security, with regulations. I mean, this is the finance world. This is not like, you know, this isn’t simple. This is there’s a lot of moving parts here. How do you see balancing friction with innovation to try to, you know, make a great product,  that that works for everybody but doesn’t, doesn’t, you know, but is still secure.

Fatemeh Nikayin: Yeah. So we are operating more on the B2B side of the, the, the fintech. So when it comes to privacy and security, it’s more like making sure that banks can trust us with their data.  and I would say it’s been quite,  quite an important part of the product design for us because both myself and my co-founder, we have been working in the industry. So we knew what banks they care about. And one of the most critical topic when it comes to banks working with fintech is what happened to my data. How do you manage my customers’ data? And and because we knew that is quite an important one for banks. We design our products and it was not an easy one in a way that we don’t access any of the bank’s customer data.  so if you want to build a SaaS solution these days, software as a service convince banks to move to cloud in the first place, and also not be able to guarantee that their customer’s data is safe. Then then you will have problems selling your solution. And what helped us was,  be able to offer SaaS solution, which comes with all the advantages of easy integration, quick onboarding, but at the same time Inshore banks that all the important data related to customer stay on their side so that they can trust us to use our platform. And I would say if you wouldn’t have done that, maybe we wouldn’t be here today and the company wouldn’t survive. That’s how important I think it is when it comes to working with banks.

 Kevin Rosenquist: Ye yeah. Makes sense. So do you guys use AI to improve the chargeback process? So what aspects of the dispute resolution can I handle better and what role do humans need to play in the process?

Fatemeh Nikayin:  Yeah. These days everyone talks about AI, right? So when we started building our solution,  we started looking at the domain rather than what technology we can use for that. And if you look at the dispute or fraud domain. These are very,  rule based  domains. So payment networks like Visa and Mastercard, have very specific rules defined on the,  what conditions? Something can be disputed or what rights the bank has or the cardholder has. And if you and when it comes to AI, you can apply it to a very complex domain that then  predictability of the result is not very important. But with dispute you want the same issue and with the same dispute. Right. Because you don’t want two different two customers being treated differently. Right.  So that’s why when it comes to the customer facing part of the whole dispute process, you want to make sure that you stick to rules. And what we did for our chatbot, we built it more of a rule based   machine rather than a large language model, because we wanted the customer to get the similar results for the similar cases and make sure that we comply with visa, Mastercard,  and dispute rules.

Fatemeh Nikayin:  But when it comes to the back office, of course, there are a bunch of ideas and use cases that you can apply a large language model to increase efficiency of the people working,  in the process.  A few months ago,  I remember, like, I read in the news about Air Canada having a case about,  one of the customers, you know, disputing,  about a flight that they missed. And the chatbot told them that they have a right to get a refund for that flight. And it ended up in a court case where the airline was hold liable because basically there was no right for the customer, but the chatbot told them that they have the right to get a refund. So that’s why when it comes to the regulated industry and customer facing part, you might want to, you know, be careful what you put out there. But when it comes to the back office where you can educate your team on how to use existing technologies, then there are a lot of use cases that can help people become more efficient.

 Kevin Rosenquist: That’s a good point. Rule based versus large language model. Yeah. You don’t want bias. You don’t want you know, you don’t want any sort of  yeah. Like you said, if two people, if you and I both go to the dispute with the same problem and we each get different answers, that’s not. You don’t want that. Yeah. Okay. That’s interesting. I like that. So you know a lot of financial infrastructure runs on outdated technology, legacy legacy payment systems, you know. Does that make it hard for you guys to innovate? Do you sort of a are you able to work with people still on legacy legacy systems, or do you kind of need to be with companies that are on more modern technology stacks?

Fatemeh Nikayin:  legacy systems always make it harder for banks to introduce new solutions.  but the way that we build our products,  we design them in a way that has,  as limited dependency on the internal systems of the bank. So most of the important integrations that we have are with the payment networks that we take care of. They are like,  using APIs, and we try to minimize the amount of integration needed because, of course,   banks are usually used to like very long projects of 6 to 12 months integration, and we wanted to make it more of a lightweight integration whenever needed.  because otherwise you get us stuck. Exactly. With all those limitations you have with the existing system. So, so far we tried to,  you know, keep the balance between how much we really need to integrate and how much we can manage it on our site.

 Kevin Rosenquist: Mhm. And I think it’s interesting because different regions handled payment disputes in different ways. They handled things differently. They’re just different systems. There’s so many different payment systems out there in the world. You know, how do you feel like certain markets are getting it right where others are not? Are you finding that there’s a big difference between the way disputes are handled across the world and and if so, maybe. Why is that? You think.

Fatemeh Nikayin:  when it comes to payment networks. Disputes related to payment networks like Visa and Mastercard are pretty much standardized because the networks they design this about the process, but also all the rules that comes on top of it. It’s more at the end,  the choice of what, you know, solution. I used to do exactly the same process, whereas another bank in Europe might use another solution, but also specifically in the dispute domain. It’s not like there are like a gazillion options for banks.  Usually there are a handful of options. And basically based,  between them, you choose the one that fits best.   The setup you have in place.  I’m just thinking about,  maybe one, one. Another part is like, so we have payment disputes for cards payment. We have payment disputes that can be for more newer payment uh methods or payment schemes. For example, in Europe,  now we have the AP European Payment Initiative. They try to build a similar scheme,  approach as Visa or Mastercard, but mainly for Europe. But in order to introduce those domestic schemes as well, usually you have to introduce some sort of dispute,  rules and customer protection to make sure that the payment method will be adopted by consumers. And then at the end, if you look at it,  you know,    look at the whole landscape with different types of payments at the end, the banks, then they have to support all sorts of disputes for all sorts of payments. So it’s more about thinking, how can I streamline it so that the same person that is trained to do this for Visa and Mastercard can also do it for this payment network in the future? And that’s the and that’s where we think, like most banks will,  will start going into that direction basically.

 Kevin Rosenquist:  I wanted to switch gears for a second. I’m kind of interested if you , if you’ll, if you’ll let me.  I noticed that your PhD research was in the internet of things, and I, you know, it was about almost. I think it was about ten years ago. Right? That is what I saw that you were doing . It’s fascinating stuff. Internet of things. What kind of prompted your decision to to focus on that,  in your research?

Fatemeh Nikayin: Yeah. At the time I started with my PhD on that topic, it was a very popular topic like, I don’t know, like I do nowadays. Sure.  so,  of course it got my attention. And what I did mostly was looking at different,  internet of Things platforms, let’s say, and,  looking at it from a technical perspective,  but also from, like, adoption and the business side of things, how to make sure that one platform is adopted, how to make sure like,  there are no challenges with regards to interoperability.  topic on a technical level. So it was an interesting topic to look at the internet of things in different industries. So I look at it in healthcare, in the energy sector.  and then  but from a more theoretical perspective, it was more about the two sided market, the platform business,  how to make sure that the platform that you are bringing to the market will be adopted. Which was very interesting. But somehow at the end of my PhD, I got a little bit into digital payments and mobile payments, which became more and more popular at that time. And that’s how I kind of ended up in a completely different domain that I, that I studied. Yeah.

 Kevin Rosenquist: That’s interesting. Yeah yeah. Because it is quite the shift.  a lot of people, when they think of the Internet of Things, they think of just smart devices or smart appliances or whatever, all that kind of stuff is there in your mind with your research? What do people miss about the concept of Internet of Things?

Fatemeh Nikayin: To be honest, I think my knowledge about this topic is so outdated.

 Kevin Rosenquist: You’re outdated now.

Fatemeh Nikayin: Yes, I’m very outdated, so I don’t want to say anything anymore. But, you know, at the time, I was looking into this domain, we didn’t like. I mean, now every mobile device has home setup capabilities that you can buy devices connected to your smartphone and manage it, or there are a lot of health care gadgets that you can use for different tracking, different types of information about,  your well-being or,  you know, monitoring the elderly people.  so a lot has happened, so I, I really cannot say much about, you know, what are the topics that maybe people don’t think about it? Because I think from the time I was looking into this topic to now, most average people know as much as I know. So, like, you know, it’s just,  nothing that I can add. 

 Kevin Rosenquist: Okay. Yeah. Well, I was going to ask you how things have changed, and,  I guess we’ll. You don’t. You’re not as connected to it anymore as you as, you know, because you don’t have to be.

Fatemeh Nikayin: Yeah. Unfortunately, no. I left the topic when I left the university. Yeah.

 Kevin Rosenquist: Ye yeah. So to kind of finish us off, like, you know what? If there’s one thing about the payments infrastructure as a whole that you think really needs to be,  addressed in order to really move forward, what do you what do you think?  we’re still a little bit,  I don’t know, behind on or a little bit outdated on or not paying enough attention to as far as payment infrastructure goes.

Fatemeh Nikayin: Payment infrastructure. One of the things,  I mentioned earlier that payments were not as strategic. So most of infrastructure,  or systems were basically provided to banks by service providers. And as a result of that,   banks missed out on collecting a lot of data that could have helped them with a lot of, you know, offering value added services. And now, if you think of payments,  as of today versus banking, you can think of how many times you pay during the day versus how many times you log in to your online banking. And if you think of it from that perspective, you see how much information and data banks they can collect just from the, you know,  payments behavior of their customers. And by analyzing those data, how much additional value added services they can provide,  to their customers, for example, you book a flight and then you get a in-app notification from your bank. Do you want to add an insurance for your trip to that place? You know, there’s a lot of things that can be done to, to,  you know, sell more value added services, but you can only do it if you have the data. And for having the data, you need to have the right,  infrastructure,  to, to access them.

 Kevin Rosenquist: Sorry. My screen froze for a second there. That was weird. All right. Anyway, they’ll edit that part out. All right, well,  Fatemeh Nikayin, the company is Rivero payment disputes. Thanks so much for chatting with me. Really appreciate your time.
Fatemeh Nikayin: Thank you very much for having me on your podcast.