How has terrorism financing changed since 9/11?

While financial provisions enacted after the terrorist attacks of 9/11 have succeeded in addressing vulnerabilities in the global financial system, terrorist organizations have developed new methods of fundraising and moving assets, including digital assets and online platforms. In this article we examine how new technologies facilitate terrorism financing and the risks financial institutions should consider.

A Review of the Financial System Post 9/11

After the terrorist attacks on September 11, 2001, the private sector, especially financial institutions, began to play a vital part in protecting the U.S. and global financial systems. In this article we examine the changes to the financial system that resulted after 9/11 and discuss how the role of financial institutions has changed with respect to deterring and detecting the financing of terrorism.

The Ghost in the Shell

Shell companies, meaning businesses that have a legal structure but no real operations or assets, have been used extensively in money laundering, proliferation finance, sanctions evasion, tax evasion, and other types of financial crimes. There is now evidence that shell companies are increasingly being used for strategic trade control violations too. This is good news for financial institutions: existing controls designed to detect the misuse of shell companies for other financial crimes will catch export control-related activity in their net too – but some adaptations are required.

Collaboration Between Chinese Money Laundering Organizations & Drug Cartels

Global regulators are highlighting the growing threat of Chinese money laundering organizations that help transnational criminal organizations—particularly drug cartels—access and move assets through the global financial system. Global financial institutions must enhance their due diligence efforts, given the growing scope of the problem and the increasingly sophisticated methods used to launder drug proceeds.

Elevating Defenses

Dive into the cutting-edge strategies that financial institutions are implementing to combat the evolving threat of AI-driven fraud. From deploying advanced detection technologies to fostering robust networks of allies, learn how the financial sector is bolstering its defenses against sophisticated scams like deepfakes and biometric fraud.

Deepfakes and Dollars

While AI has the potential for transformative impact in the financial sector, it also introduces new challenges. From biometric mimicry to the alarming rise of deepfakes, this blog highlights emerging threats and challenges in countering AI-driven fraud.

Lessons from the Flight Deck

Automation and artificial intelligence, including machine learning, have the potential to provide significant benefits within financial services – however they must be implemented responsibly. In this article, we draw on the use of automation in other sectors such as aviation, review key global regulations, and examine regulatory enforcement actions, to identify best practices for responsible use of AI in compliance.

Adapting to Digital Assets Risks

In our recent webinar, "Mastering Compliance in Digital Assets through Multi-Tiered Defense Strategies," industry leaders examined the intricacies of digital asset compliance. Featuring a panel of industry experts including Andrew Rosenberg, Elizabeth Severinovskaya, and Catherine Woods, this blog post summarizes the key insights shared during the event.

The Convergence of Sanctions & AML

The convergence of sanctions and anti-money laundering efforts has significantly accelerated since Russia’s full-scale invasion of Ukraine in February 2022. FINTRAC in June 2024 released a special bulletin focusing on financial activity associated with suspected sanctions evasion. The report highlighted shared methodologies and insights to help compliance teams collaborate on best practices.

Three Lines of Defense: Case Study

The “three lines of defense” model is a widely recognized approach for effectively managing financial crime and regulatory risk. But how does it work in practice? This article explores how the three lines of defense applies using client due diligence as a real-life case study.