European Regulatory Technology (RegTech) scale-up Salv has broken new ground by becoming the first technology firm in Europe to secure a regulator-awarded license to operate as a ‘Closed Service KYC Utility’ service provider.
The license, granted five years after the standards and regulations were established by the Data State Inspectorate of Latvia in 2019, “paves the way for financial institutions to collaborate whenever criminal activity is identified or suspected.”
By alerting their peers when financial crime is detected, firms can “take action to limit or prevent it from escalating across the financial services ecosystem.”
To become a trusted, licensed supplier of financial services intelligence data exchange services, Salv was required “to prove corporate due diligence and demonstrate ISO/IEC 27001 certification, the highest levels of security, data protection and compliance.”
The license will enable financial institutions “to leverage Salv’s Bridge platform to help combat financial crime.”
In 2023, customers of the four largest commercial banks in Latvia “were defrauded of funds amounting to €12.7 million, while the amount of prevented cases reached €9.2 million, according to the data compiled by the Financial Industry Association.”
Also, more than €5.6 million were obtained illegally “as a result of investment fraud €5.5 million as a result of telephone fraud, where customers have approved payments from their accounts. Compared to the previous year, 2023 also saw an 84% rise in investment fraud cases reported by financial institutions in Latvia, indicating a rapid rise in financial crime.”
Laima Letiņa, Advisor to the Finance Latvia Association, said:
“Collaboration between financial institutions is beneficial for all, but it requires confidence in the security of the process and compliance with a range of regulatory requirements before it can be put into practice. We therefore congratulate all those involved for the work they have done to ensure that the opportunity is realised in practice. Salv is the first regulatory technology company to meet the high quality standard and has obtained the Closed Shared KYC Utility licence issued by the State Data Inspectorate, which will enable the Latvian financial sector to fight money laundering more effectively.”
According to Bruno Puriņš, Salv Market lead in Latvia:
“In securing this licence and exceeding the challenging security and regulatory requirements set by the Latvian Data State Inspectorate, Salv has proven that our solutions are fit for purpose and our organisation is trustworthy and robust. We are proud to have excelled under independent scrutiny. Our success in gaining this license assures both current and future clients – in the Baltic States and more broadly across Europe – that it is now possible for the financial services community to unite against financial crime.”
Edgars Pastars, Senior Associate at Baltics legal advisory firm ZAB COBALT, said:
“The use of collaborative customer intelligence tools to fight financial crime have been discussed globally for many years. Despite its modest stature, Latvia is at the forefront of innovation and has pioneered the development of standards and regulations that have transformed this concept into reality. We are proud to have advised the Latvian authorities and financial institutions during the initial licence creation process in 2019, and subsequently to have supported Salv in their pursuit of securing the license.”
