Financial innovations in terrorism financing: a case study of Malaysian terror financing

Abstract

Purpose This paper aims to employ the use of focus groups composed of enforcement officers to explore and identify the financial methods used by terrorism-related organisations in Malaysia. Design/methodology/approach The study used an open-ended question and focus group methods to gather information from 20 Malaysian enforcement officers with extensive experience in dealing with terrorism-related activities, as they strive to prevent and counter terrorism incidents. In addition, experienced practitioners and field experts also contributed to the study. Findings The study reveals various innovative financial methods used by terrorist-linked organisations to evade detection by local enforcement agencies. These findings are consistent with previous research, which highlights the intelligence of these organisations in avoiding detection by financial regulators. Research limitations/implications The findings are based on the perspectives of enforcement officers involved in preventing and countering terrorism activities. Further research could be conducted to gather insights from other government agencies, such as the judiciary or local agencies. Practical implications The study offers practical suggestions for organisations and institutions on effectively monitoring and taking appropriate actions in financial activities related to terrorism. Originality/value This study provides unique insights into the financial methods of terrorism-related organisations in an emerging country in Southeast Asia. Its findings can be applied throughout the region, given the country’s global connectivity. Furthermore, the study is distinctive in that it provides information from enforcement officers within terrorism-related government organisations, an area where resources are limited. The study also considers the impact of the pandemic on the development of these financial innovations by terrorist organisations.