Technology has rendered the banking and finance industry unrecognisable compared to just a couple of decades ago. The benefits of digital-age finance are innumerable, including fast or instant transfers of funds, quick and easy bill and invoice payments, and the ability to access services from anywhere in the world. However, the benefits also come with a host of new problems. Financial crime is rising year-on-year, just in London alone, money laundering rose from £10 billion in 2007, to an eye-watering £90 billion by 2020.
The overall cost of financial crime to UK citizens, businesses, and the government is estimated to be more than £100 billion per year. Individuals and small businesses are especially vulnerable and are often unable to recover financially if they fall victim to these crimes.
The total cost of failing to successfully combat these wrongdoers is potentially immeasurable, presenting a possible threat to national security, the economy, and international reputation. Despite spending around £22,000 per hour fighting financial fraud, the UK’s estimated base rate for successfully recovering ill-gotten funds is only 5%.
Addressing escalating fraud in the UK
Salv, an Estonia-based RegTech firm specialising in combating financial crime, has just announced it has secured €3.9 million in new funding. This marks a total raise of €7.9 million this year and €12.1 million overall. This funding round, comprising contributions from existing investors, Passion Capital, G+D Ventures, and ff Venture Capital, as well as yet undisclosed new investors, is another step closer to the company’s goal of doubling its revenue in 2023 compared to the previous year.
The investment will primarily support Salv’s expansion in the UK, which has witnessed a significant surge in Authorised Push Payment (APP) fraud cases. This type of fraud involves criminals manipulating consumers or businesses into transferring funds to their accounts through impersonation and social-engineering tactics. Despite marginal reductions in losses, the volume of cases increased by 22% in 2023, with APP fraud accounting for 40% of the UK’s total fraud losses in 2022.
Empowering financial institutions against fraud
Salv offers a suite of tools aiding banks and service companies of various sizes in identifying, preventing, and halting fraud, money laundering, and terrorist financing activities. Currently used by 53 financial institutions across 12 countries, including LHV Bank, Swedbank, and SEB, Salv’s solutions encompass customer screening, real-time transaction monitoring, and risk scoring.
Regulatory changes
The UK’s Payment Systems Regulator plans to introduce mandatory reimbursement for APP fraud victims, creating equal liability for payment companies. Salv is positioned to assist financial institutions in adapting to these changes, emphasising the importance of inbound transaction monitoring to identify fraudulent activities, thereby reducing liabilities.
Taavi Tamkivi, Founder and CEO of Salv, commented: “As the UK moves towards shared responsibility for APP fraud refunds, financial institutions must adapt. Our suite, particularly the inbound monitoring feature, is critical for detecting fraudulent activities and money mule accounts, thereby reducing the financial institution’s liability. This feature, along with tools like our Bridge platform, is tailored to meet the evolving regulatory demands, and the soon-to-launched AI-based no-code rule generator will enable financial institutions to swiftly adapt to new criminal behaviour.”
Technology advancements
Salv is nearing the launch of an AI-based no-code rule generator, slated for Q2 next year. This tool, developed using existing monitoring regulations and transactional data, enables the implementation of new transaction monitoring rules without necessitating developer support, aligning with evolving regulatory demands.
Innovative platform for collaborative fraud prevention
The company’s toolkit includes Bridge, a GDPR-compliant collaborative platform facilitating information exchange among members. In Estonia, the Bridge network covers 99% of the market, contributing to the prevention of 50% of fraud cases and achieving remarkable recovery rates of up to 80% for APP fraud victims.
Salv’s vision and key info
Founded in 2018 by former anti-money laundering experts from Skype and Wise, Salv’s mission is to combat money laundering, terrorist financing, and financial fraud effectively. Taavi Tamkivi, Salv’s Founder and CEO, emphasises the importance of their suite of solutions in meeting regulatory demands and mitigating risks associated with financial crime.
While headquartered and developed in Estonia, the company also operates in the United Kingdom, Lithuania, Latvia, and has a subsidiary in Poland.
