FinTech-Enabled Terrorism Financing: Lessons for Latvia

On 26–27 January 2021, Project CRAAFT hosted an online workshop for Latvian stakeholders from the public sector and FinTech community. The workshop discussed terrorism financing (TF) challenges and counter-terrorism financing (CTF) opportunities presented by the rise of FinTechs (companies offering technology-driven payment and financial services) and peer-to-peer platforms (commonly known as ‘crowdfunding’ platforms). The sessions included presentations by leading financial crime experts in the FinTech industry who focused on helping the participants anticipate how their services could potentially be abused by terrorists or foreign-based supporters. By bringing together different representatives of the Latvian FinTech industry and the public sector, the participants were able to see the first-hand advantages of a public–private collaboration to tackle TF.  

Enthusiasm can be seen among the Latvian FinTech community in the role that the industry can play in supporting TF investigations and in developing policy and regulation. While unique opportunities for identifying and countering TF are found through the technologically-advanced operations models of FinTechs, the value of the human element must not be forgotten. These platforms and technologies are ultimately only as effective as the people who operate them, so investments in training for FinTech staff are still necessary: both in how to use new technologies as well as in the latest TF typologies and trends. The value of a furthered public–private collaboration is recognised by all the involved parties and requires a legal frameworks for data-sharing and confidentiality to be well understood in order for the partnership to reach its full potential. Overall, FinTech companies can greatly benefit from receiving more security-relevant intelligence from the public sector to advance their understanding of the terrorism threat landscape.