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Estonian Banks Unite to Combat Fraud with Real-Time Data-Sharing Platform

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A pioneering real-time data-sharing platform, originally designed to combat money laundering, has been successfully repurposed to tackle the growing menace of authorized push payment (APP) fraud. The platform, known as Bridge, has already prevented millions of euros in laundered funds from reaching criminal-controlled accounts and is set to expand its reach across Europe.

Background

Bridge was developed by Estonian fintech firm Salv and initially deployed in 2020 following a major money laundering scandal involving Danske Bank’s tiny branch in Tallinn. The platform’s success in preventing fraudulent transactions has now been extended to combat APP fraud, which saw criminals use fake websites and emails to trick consumers into authorizing payments totaling £789.4 million in the UK last year.

How Bridge Works

Bridge enables banks to share real-time information about fraudulent transactions, allowing them to track and recover stolen funds. According to Salv’s founder and CEO, Taavi Tamkivi, the platform has already demonstrated its potential to detect 80% of APP fraud cases, with some banks reporting that they have been able to reclaim a significant proportion of the stolen money.

Seamless Information Sharing

The platform’s success is attributed to its ability to facilitate seamless information sharing between banks, which was previously hindered by traditional methods such as phone calls and emails. “Traditionally, people in banks might call or email each other with information, but this is not secure and there is no guarantee it goes to the right person,” said Andres Kitter, deputy CEO of LHV’s UK operations. “The Bridge is a good way to share data more quickly in a structured manner.”

Expansion Plans

Currently, 10 Estonian banks are signed up to the Bridge platform, with 11 others outside Estonia set to go live later this year. The platform’s expansion is expected to have a significant impact on the global fight against financial crime, with regulators hailing its potential to improve the quality of reports and enhance cooperation between banks.

Collaboration and Innovation

Salv’s CEO, Taavi Tamkivi, emphasized that the success of Bridge demonstrates the importance of non-competitive cooperation in the fight against fraud. “It is unlikely that banks will want to plug into technology from a competitor so it is good that fintechs are neutral,” he said.

The platform’s development has also highlighted the crucial role played by fintech companies like Salv in developing innovative solutions to combat financial crime. As the global financial services industry continues to evolve, Bridge serves as a prime example of how collaboration and data-sharing can lead to significant improvements in fraud detection and prevention.