FinTech-Enabled Terrorism Financing: Lessons for Slovakia

Jun 7

Written By Kinga Redlowska - Project CRAAFT

On 1-2 June 2022, Project CRAAFT convened a workshop in Bratislava for Slovak stakeholders on the terrorism financing (TF) challenges and counter-terrorism financing (CTF) opportunities presented by the country’s active FinTech sector. Workshop presentations delivered by leading financial crime experts in the FinTech industry, as well as researchers from RUSI, focused on helping participants to anticipate how their services might be abused by terrorists or their supporters operating abroad. This is a crucial challenge for a country such as Slovakia, which does not face a substantial terrorist threat within its own borders. By bringing together representatives of the FinTech industry and the public sector, participants witnessed first-hand the advantages and creative synergies generated through public–private collaboration to tackle TF.

Several attributes of FinTech companies make them attractive to terrorist financiers and other illicit actors, although some of these attractive characteristics are in fact false perceptions of the working methods of FinTechs. FinTech engagement with law-enforcement agencies offers opportunities for rich intelligence sharing within legal restrictions. Given their technology-driven operations models, FinTechs are well-positioned to provide law-enforcement agencies with detailed intelligence during investigations, and novel modes of data transfer could supplement the STR regime to take fullest advantage of FinTech data holdings for CTF.

The value of enhanced public–private collaboration is appreciated by all parties and requires a well-understood legal framework for data-sharing and confidentiality to reach its full potential. In the near term, FinTech companies may benefit from receiving more security-relevant intelligence from the public sector to advance their understanding of the terrorism threat landscape. At the same time, the public sector would benefit from a greater understanding of the FinTech sector and its financial model to better comprehend its vulnerabilities.

Trainers for this workshop included: