Payment Systems Regulator (PSR) indicated its plans to make the full reimbursement of authorised push payment (APP) fraud victims mandatory for the banks. 

The regulator is expected to gain new powers from the UK parliament in the first half of 2023, and plans to implement the new measures by 2024. 

These moves have been commended by Estonian-based regtech company Salv, as the firm expects this new rule to give incentive to banks to focus more on protecting customers against fraud. 

In its own effort in the fight against fraud, Salv has set up a GDPR-compliant network, Bridge, a double-encrypted collaborative crime-fighting platform, which enables immediate connections between banks and financial institutions. Bridge has been proven to be effective against criminal activity such as APP fraud, sanctions and money laundering. 

Salv states that the speed of fraud investigations for participating banks has increased 100 times following Bridge’s introduction, reducing the time to solve a case from 24-72 hours to around 10 minutes.

Salv CEO and Co-Founder, Taavi Tamkivi, spoke to Payment Expert in-depth about the importance of cross-connectivity and data sharing when it pertains to combating fraud, a mechanism which has shown to be fruitful for all parties involved. 

He spoke on PSR’s recent announcement, stating: “To stop APP fraud, we need to make it too expensive for criminal networks to even attempt it. Today, Salv’s Bridge covers 99% of the Estonian market and has expanded internationally, with four new networks in Europe. 

“Currently, around 50% of the cases are effectively stopped by banks using Bridge. This number will increase when more institutions join or establish individual collaborative networks and improve the automation of their internal anti-fraud systems.”

APP fraud has been on the rise, particularly in the UK, since 2021. Salv highlights that APP fraud cases increased by 39%, with losses mounting to £583m. The fraud prevention firm also notes that 97% of fraud transactions were instant payments, making it more complicated to recover funds. 

In response, the PSR has encouraged financial institutions to continue to develop their fraud detection and prevention tools, including ’supporting and encouraging improved intelligence sharing to spot fraudulent transactions and stop them from happening’. 

“LHV Bank in Estonia took part in the Bridge pilot and saw excellent results in a very short period. Bridge has been particularly useful in fraud prevention, including the rising fraud cases and Authorised Push Payments fraud,” commented Andres Kitter, Deputy CEO of LHV UK

“Now we are using the tool in the UK, where we process millions of payments for our global fintech clients daily. The platform opens a direct line to other institutions, helping us communicate and find the necessary information to stop these actions from completing.”