We should envisage that terrorist financiers will attempt to benefit from anonymous transactions made possible by innovations of new payment products and services such as internet-based payment systems, prepaid cards and virtual currencies. Likewise, fundraising through social media and other online platforms such as “crowdfunding” have increased in prominence, in addition to other more traditional sources of funds such as proceeds of criminal activities, conventional donations, and funding from legitimate purposes. As change is a constant, collation of data points that this environment will continue to persist. Global internet users have increased from 397 million in the year 2000 to nearly 3.9 billion as of June 2017, an impressive growth of almost 1000%. Similarly, global investment activities in the FinTech industry have increased from USD9 billion in 2010 to USD25 billion in 2016. If this trend is anything to go by, the financial industry will be hard pressed to mitigate, identify and prevent cases of abuse in the system. There is no doubt that rapid technological developments have offered immense potential for economic growth. Unfortunately, they have also spawned new ways for terrorist organisations to acquire, move and manage their funds. There are other risks not anticipated before, such as remote radicalisation via the internet that has resulted in an increase in the number of small terrorist cells and “lone wolf actors” that makes detecting and halting terrorism financing even more challenging. In light of this development, the role of financial sector as a bulwark against terrorists financing becomes even more critical.

This initiative allows for the viability of new technologies to be tested in a controlled environment while simultaneously exploring potential risks and the mitigating measures. In addition, Bank Negara Malaysia will continue to foster cooperative platforms between the authorities and financial institutions to enable “rapid responses” to terrorism financing threats. Early this year, we facilitated an information sharing platform between law enforcement agencies and selected financial institutions to swiftly and effectively mitigate risks and respond to threats. Greater access of intelligence information for financial institutions and the increased threats from ISIL had resulted in the upward trend of reporting of Suspicious Transaction Reports (STRs). To 2/3  BIS central bankers' speeches  put it in perspective, in 2015, the financial intelligent unit (FIU) received 93 terrorism financing related STRs which led to 14 disclosures to law enforcement agencies. In comparison, between January and June 2017, we received 346 terrorism financing related STRs which have led to 34 disclosures to law enforcement agencies. Importantly, the quality of STRs submitted has also improved. Bank Negara Malaysia is also in the midst of finalising the details of a new requirement for the Banking and Money Services Business sector to report remittances in high risk areas. The high risk areas will be determined based on the law enforcement agency’s intelligence on areas that they view may pose higher risks for funding of terrorism activities.