Terrorist financing isn’t always about large, suspicious transactions. It can be as small as a £10 mobile top-up, a series of seemingly harmless donations, or funds funnelled through a legitimate business. This is what makes it so difficult to track – and why it’s a key focus for financial crime teams.
Tackling terrorist financing protects financial systems from abuse. The stakes are high, and regulators expect businesses to go beyond basic compliance. A strong CFT strategy must be embedded into every aspect of an AML programme.
Every business subject to AML rules needs to assess the risk of terrorist financing as part of its overall financial crime risk assessment. While money laundering and fraud risks are often front of mind, terrorist financing presents a different challenge. The amounts involved can be smaller, the sources more diverse, and the transactions less obviously linked.
Risk indicators vary depending on the business, but common red flags include:
Customers using multiple small transactions rather than larger sums
Sudden changes in customer behaviour, particularly where funds are sent to high-risk regions
Involvement of charities or non-profits with no clear operational purpose
Transactions linked to jurisdictions with known terrorism concerns
AML compliance teams need to think beyond standard due diligence and monitoring rules. A static, tick-box approach won’t work, CFT risk needs to be built into onboarding, scheduled reviews, and wider compliance processes.
