Anti-money laundering and
counter-terrorist ﬁnancing threats
posed by mobile money
Northumbria University, Newcastle, UK, and
Mark Eshwar Lokanan
Royal Roads University Faculty of Management, Victoria, Canada
Purpose –The purpose of this paperis to explore the various characteristics of mobilemoney transactions
and the threatsthey present to anti-money laundering (AML) and counter terroristﬁnancing 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
identiﬁedin relations to the three stages of moneylaundering and effective law enforcement.
Findings –The ﬁndings indicatethat as money laundering and terrorist ﬁnancing transactions continueto
gravitate towards the weaknesses in the ﬁnancial system, mobile money provides yet another avenue for
criminalsto exploit. Risk factors associated with anonymity, elusiveness,rapidity and lack of oversights were
all integral considerationsin building an effective AML regime. The use of cashis considered a higher threat
than mobilemoney prior to implementation of systems and controls.
Practical implications –This rapidly changing environment of how individuals manage their money
during transactions is set to further explode globally, which poses new problems for regulators and
governments alike. Unlessthere is a uniﬁed concentration to heighten global awareness, the imposingthreat
of mobile moneyis set to increase at a rapid rate if appropriate actions arenot taken.
Originality/value –The ﬁndings from this study can be usedto gain greater insights on mobile money
transactionsand raise further awareness of the ever-increasingthreat to global ﬁnancial integrity.
Keywords Anti money laundering legislation, Financial service sector, Mobile money,
Money laundering activities, Terrorist ﬁnancing
Paper type Research paper
There has been an increase use of mobile money involving retail users and ﬁnancial
institutions (Scobey-Thal, 2015). In 2015, the GSMA (an organisation that represents the
interests of mobile operators worldwide)states that there are more than 411 million mobile
money accounts around theworld. Furthermore, mobile money accounts have penetrated 85
per cent of countries, often wherea majority of the population do not have access to a formal
ﬁnancial institution GSMA, 2015.Cisco Systems Inc. (2017) estimates that by 2021, more
people will have access to mobile phones than therewill be access to running water. Given
the enormous growth in the mobile market, it is internationally recognised that this
penetration should be capitalised on in the form of ﬁnancial inclusion. However, with such
beneﬁts, come new challenges and the success of mobile money depends on the industry’s
ability to adjust to a rapidlychanging ﬁnancial landscape GSMA, 2015.
A combination of exponential mobile growth and emerging ﬁnancial services creates
new opportunities for criminalsto exploit vulnerabilities in the system. Although there have
Journalof Money Laundering
Vol.22 No. 1, 2019
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