New Technologies, New Risks? Innovation and Countering the Financing of Terrorism

Recent developments in the way financial services are delivered have provided both opportunities for economic development and prompted fears of their attractiveness for crimes such as terrorist financing. This paper explores four innovations, value...

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Bibliographic Details
Main Author:	Zerzan, Andrew
Format:	Publication
Language:	English
Published:	World Bank 2012
Subjects:	ACCOUNT BALANCE ACCOUNT HOLDERS ACCOUNT INFORMATION ACCOUNT NUMBER AUCTION AUTHENTICATION AUTHORIZATION BANK ACCOUNT BANK ACCOUNTS BANK BRANCHES BANK FOR INTERNATIONAL SETTLEMENTS BANKING ACCOUNT BANKING SERVICES BASIC BEST PRACTICES BIOMETRIC AUTHENTICATION BIOMETRIC TECHNOLOGY BUSINESS ENVIRONMENT BUSINESS MODEL BUSINESS MODELS BUSINESS RELATIONSHIP BUSINESSES BUYER BUYERS CAPABILITIES CARD TECHNOLOGY CARDHOLDER CARDHOLDERS CELLULAR NETWORK CENTRAL BANKS CENTRAL SERVER CLEARING SYSTEMS COMMODITY COMMUNICATION TECHNOLOGIES COMMUNICATIONS TECHNOLOGY COMMUNITIES COMPUTERS COPYING COPYRIGHT CREDIT CARD CREDIT CARDS CRIMINAL PURPOSES CURRENCY EXCHANGE CUSTOM CUSTOMER IDENTIFICATION CUSTOMER INFORMATION CUSTOMER PROFILE CUSTOMER PROFILING CUSTOMER SERVICE CUSTOMS DEBIT CARD DEPOSITS DIGITAL DIGITAL CURRENCIES DIGITAL CURRENCY DRUG TRAFFICKING DUE DILIGENCE ECONOMIC DEVELOPMENT ELECTRONIC BANKING ELECTRONIC FUNDS ELECTRONIC FUNDS TRANSFER ELECTRONIC MONIES ELECTRONIC PAYMENT ELECTRONIC PAYMENT SYSTEMS ELECTRONIC PURSE ELECTRONIC PURSES ELECTRONIC SIGNATURE EQUIPMENT FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF NEW YORK FINANCIAL ACTIVITY FINANCIAL CRIMES FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INTELLIGENCE FINANCIAL INTERMEDIARIES FINANCIAL MARKET FINANCIAL PRODUCT FINANCIAL RESOURCES FINANCIAL SERVICE FINANCIAL SERVICES FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TRANSACTIONS FRAUD FUNCTIONALITY FUNDS TRANSFERS GLOBAL STANDARD GUIDELINES FOR COMPANIES ID IDENTIFICATION CARDS IDENTIFICATION SYSTEM ILLICIT ACTIVITIES ILLICIT ACTIVITY INFORMATION SERVICES INNOVATION INNOVATIONS INSPECTION INSURANCE INTERFACE INTERFACES INTERNAL CONTROLS INTERNATIONAL BANK INTERNATIONAL STANDARDS INTERNATIONAL TELECOMMUNICATIONS INTERNET BANKING INTERNET DEVELOPMENT INTERNET USERS INTEROPERABILITY JOINT VENTURE LACK OF INTEROPERABILITY LAW ENFORCEMENT LAWS LEGAL REGIME LEGAL STATUS LEGISLATION LEVEL OF RISK LICENSE LICENSES MAGNETIC STRIP MARKET DEMAND MARKET SEGMENTS MARKET SHARE MATERIAL MEDIA MOBILE BANK MOBILE BANKING MOBILE PHONE MOBILE PHONE USERS MOBILE PHONES MOBILE TELEPHONE MOBILE TELEPHONES MOBILE USERS MONETARY AUTHORITY MONETARY INSTRUMENT MONETARY INSTRUMENTS MONEY LAUNDERING MONEY TRANSFER NETWORK ACCESS NETWORKS NEW TECHNOLOGIES NONBANK FINANCIAL INSTITUTIONS ONLINE BANKING ONLINE BANKS ONLINE FINANCIAL SERVICES ONLINE FRAUD ONLINE PAYMENT ONLINE PAYMENTS ONLINE SERVICES ONLINE TRANSACTIONS OPEN SYSTEM PASSWORDS PAYMENT METHOD PAYMENT METHODS PAYMENT PROVIDERS PAYMENT SERVICE PAYMENT SERVICES PAYMENT SYSTEM PAYMENT SYSTEMS PEER TO PEER PERSONAL INFORMATION PHONE CARD PHONE CARDS PHONE NUMBER PHYSICAL LOCATION PHYSICAL PRESENCE POINT OF SALE PRIVATE SECTOR PROFITABILITY PUBLIC TRANSPORTATION PUBLISHING QUERIES REDEMPTION REGISTRIES REGISTRY RESULT RESULTS RISK ANALYSIS RISK FACTOR RISK FACTORS SEARCH SECURITIES SECURITIES TRANSACTIONS SECURITY CONTROLS SECURITY MEASURES SERVICE PROVIDER SERVICE PROVIDERS SETTLEMENT SYSTEMS SMART CARD SMURFING STATISTICAL ANALYSIS STOCK TRADING SUBSIDIARY SUPERVISION SUSPICIOUS ACTIVITY TECHNOLOGICAL ADVANCEMENT TECHNOLOGICAL DEVELOPMENTS TELECOM TELECOMMUNICATIONS TELEPHONE TERRORISM TERRORIST TERRORIST ATTACK TERRORIST GROUPS TERRORISTS THIEVES TRACEABILITY TRADITIONAL FINANCIAL INSTITUTIONS TRADITIONAL PAYMENT TRANSACTION TRANSACTION COSTS TRANSACTION SERVICES TRANSFER OF OWNERSHIP TRANSMISSION TREASURY NOTES UNAUTHORIZED ACCESS USER USERS USES VERIFICATION WEBSITE WEBSITES WIRE TRANSFER WIRE TRANSFERS WIRELESS WIRELESS NETWORKS
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000333038_20100105024650 http://hdl.handle.net/10986/2400 http://hdl.handle.net/10986/5918

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Summary:	Recent developments in the way financial services are delivered have provided both opportunities for economic development and prompted fears of their attractiveness for crimes such as terrorist financing. This paper explores four innovations, value cards, mobile financial services, online banking and payments, and digital currencies, outlining how they work, analyzing their risks, and identifying some ways in which governments and providers are attempting to reduce their attractiveness to financiers of terrorism. Determining what the actual risks are is critical to ensuring that laws and regulations balance both the need to protect integrity in the market and to create an environment friendly to business and empowering to the poor. The paper concludes that these new methods of payment do not offer particular usefulness to terrorist financiers. However, some of these channels could be attractive for general criminal abuse because they have an ambiguous place in the legal regime. Providers therefore, may not know about or elect to properly mitigate risks. The industry is encouraged to work within itself to share information to prevent and detect criminal activity. Governments should consult with industry in deciding regulation and industry should notify government prior to rolling out a new service. This will make government oversight more effective. Lastly, since many of these services are international in scope, government coordination and awareness rising is central.

New Technologies, New Risks? Innovation and Countering the Financing of Terrorism

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