Anti-money laundering and counter-terrorist financing threats posed by mobile money

Purpose:  The purpose of this paper is to explore the various characteristics of mobile money transactions and the threats they present to anti-money laundering (AML) and counter terrorist financing regimes.

Design/methodology/approach:  A thorough literature review was conducted on mobile money transactions and the associated money-laundering and terrorist financing threats. Four key themes were identified in relations to the three stages of money laundering and effective law enforcement.

Findings:  The findings indicate that as money laundering and terrorist financing transactions continue to gravitate towards the weaknesses in the financial system, mobile money provides yet another avenue for criminals to exploit. Risk factors associated with anonymity, elusiveness, rapidity and lack of oversights were all integral considerations in building an effective AML regime. The use of cash is considered a higher threat than mobile money prior to implementation of systems and controls.

Practical Implications:  The study opens an avenue for ordinary users of financial information to process the data and question the validity of the numbers presented by listed firms. Furthermore, if fraud information is available, similar research can be conducted to examine the tendency for companies with anomalous financial reports to commit fraud.

Originality/Value:  The findings from this study can be used to gain greater insights on mobile money transactions and raise further awareness of the ever-increasing threat to global financial integrity.