TERROR FINANCING

Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi holding a copy of the ‘Terrorism Financing Regional Risk Assessment on Non-Profit Organisation’ book at the Third Counter-Terrorism Financing Summit 2017 in Kuala Lumpur yesterday. With him are (from left) Bank Negara Governor Tan Sri Muhammad Ibrahim, Australian Minister for Justice and Minister Assisting the Prime Minister for Counter-Terrorism Michael Keenan and Indonesia’s Coordinating Minister for Political, Legal and Security Affairs General Wiranto.

system — capitalising on technology, promoting “clever partnership” between the authorities and industry and closer international cooperation.

The adoption of artificial intelligence, machine learning and big data technology are imperative tools as suspicious transactions become more complex and harder to detect. Regulators cannot be oblivious to these developments.

“We need to prepare ourselves as digital currencies become the new norm, according to many pundits,” Ibrahim said.

Last year, Bank Negara 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 to intelligence information for financial institutions and increased threats from Islamic State of Iraq and the Levant had resulted in the upward trend of reporting of Suspicious Transaction Reports (STRs).

In 2015, the Financial Intelligent Unit (FIU) received 93 terrorism financing related STRs, leading to 14 disclosures to law enforcement agencies.

“In comparison, between January and June 2017, we received 346 terrorism-financing related

STRs, which led to 34 disclosures to law enforcement agencies,” Ibrahim said.

Importantly, the quality of STRs submitted had also improved, he added.

In the era of rapid technological advancements, it is essential that the financial sector’s risk management strategy remains agile in order to mitigate emerging risks.

“This requires not only the development of innovative technology-based deterrents and proactive detection systems, but also effective cooperation between the public and private sector, and law enforcement, both domestic and across borders.”