Regtech Salv, with its suite of tools to help banks and service companies fight financial crime, has raised €3.9m in new funding, bringing its capital raised this year to €7.9m and total funding to €12.1m. The round includes investments from new and existing investors and is a testament to a strong year for the Estonian-based regtech, which is on track to double its revenue in 2023 compared to 2022.

The investment will fuel Salv's expansion in the UK, a market currently experiencing a sharp increase in Authorised Push Payment (APP) fraud, where criminals use social engineering attacks involving impersonation to trick consumers or businesses into transferring money to their accounts. In 2022, the UK lost over £1.2 billion to fraud, with APP fraud accounting for 40% of those losses. According to data from UK Finance – despite a marginal 1% drop in losses to APP fraud in the first half of 2023 – the volume of cases surged by 22% this year. Smaller banks and payment firms, often with less robust fraud detection and prevention systems, are particularly vulnerable. 

Salv's suite of products gives players big and small the necessary tools to detect, prevent, and stop fraud, money laundering, and terrorist financing. Salv is used by 53 financial institutions across 12 countries. Providers, including LHV Bank, Swedbank, and SEB, rely on Salv for customer and sanctions screening, real-time inbound and outbound transaction monitoring, and risk scoring.

In response to raising APP fraud, the UK’s Payment Systems Regulator will introduce mandatory reimbursement for APP fraud victims next year, placing equal liability on both sending and receiving payment companies. So far, most banks and payment firms have overlooked inbound transaction monitoring, only focusing on funds leaving their client’s accounts. This represents an important growth opportunity for Salv. 

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 behavior.” 

Currently, in its final phase of testing, the AI-based no-code rule generator is set for launch in Q2 next year. Developed using data from existing manually created monitoring rules that have been validated and improved with transactional data, the tool allows for the implementation of new transaction monitoring rules without requiring developer support. 

Salv’s toolkit also includes Bridge, a fully GDPR-compliant collaborative crime-fighting platform, enabling rapid tactical information exchange between its members. In Estonia, the Bridge network covers 99% of the market and contributes to the prevention of 50% of fraud cases and achieving recovery rates for stolen funds for APP fraud victims as high as 80%. These figures significantly surpass the UK's current estimated baseline of 5%. Salv will initiate a closed pilot for a similar Bridge network in the UK early next year, in collaboration with a global banking group.