The news confirms a Reuters report about the venture, which involves scandal-hit Danske Bank and Swedbank and their rivals Handelsbanken, Nordea, SEB and DNB.

The banks confirmed the KYC Utility would pool know your customer checks initially for their large and medium-sized Nordic-based companies and begin offering commercial services from next year.

Fighting money laundering has become a high profile issue for the region after Danske Bank and Swedbank became embroiled in a money laundering scandal involving their businesses in the Baltics, costing both billions in market value.

(Reporting by Esha Vaish in Stockholm; Editing by Keith Weir)