The banks of Estonia have united under an anti-money laundering (AML) initiative created by regtech startup Salv; together preventing a laundered €3milion from reaching its final destination.
Under Salv’s initiative, the AML Bridge Estonia Pilot (‘the Pilot’) consolidated all Estonian banks into one fincrime intelligence sharing platform.
AML Bridge works by helping banks exchange and enrich data on bad actors, thereby enabling financial institutions to strengthen their respective AML efforts.
Participating banks include Swedbank, SEB, Luminor, LHV, Bigbank, Citadele, OP Bank, Coop, TBB and Inbank. The participating banks partnered with Salv to create an information and data exchange platform, AML Bridge.
AML Bridge significantly cut the time required to handle cases and to date, more than 1200 collaborative investigations have been undertaken within three different use cases – AML, fraud and sanctions.
The objective of the initiative is to help financial institutions fight financial crime more effectively.
As the web-based platform is encrypted and fully compliant with the latest data protection regulations, AML Bridge legally and securely facilitates the cooperation between financial institutions across borders and legal jurisdictions so that transnational criminal networks can be tackled more holistically.
Estonia’s Financial Supervision and Resolution Authority (FSA), Data Protection Inspectorate (DPI) and Financial Intelligence Unit (FIU) have all pledged their support towards the initiative.
Salv reports that it has seen the use cases for sanctions more than double in the past few months. Under the current compliance practices, less than one to two per cent of criminal cash is successfully intercepted.
Financial institutions have traditionally worked alone when dealing with this task, without the ability to securely and quickly exchange information on suspicious transactions and customers to better stop criminals and their criminal money.
Following the success of the pilot, all the participating banks have decided to continue using the AML Bridge.
Members in Estonia are already inviting financial institutions from other countries to join the network, based on where they see high-volume trends of suspicious behaviour occurring.
AML Bridge will expand into further markets, with Salv to now include members from outside the traditional banking sector; including the onboarding of its first crypto fintech.
The company has also reported that it is in discussions with investment companies and pension funds.
Further development will see the platform become more multilateral, automated, proactive and able to handle large-scale data exchange in real-time.
Taavi Tamkivi, CEO and co-founder of Salv, said: “This initiative proves that an inter-institutional AML tactical data exchange is legally, operationally, and technically possible. It is taking place today, with live customer information exchanged at this very moment.
“Even amongst the early phase network from Estonia, the banks are preventing financial crime cases in the value of €50,000 to 100,000 per week. This is extremely relevant today as in recent weeks, we’ve seen sanctions-related investigations through AML Bridge more than double.
“Which shows just how important industry-wide collaboration is, not just to stop fraudsters exploiting the financial system, but also oligarch regimes conducting wars.”
The full findings of the pilot can be found in the company’s March 2022 whitepaper ‘AML Bridge – building the new standard in AML/CTF.’