TITLE:
Enhancing Effectiveness in Countering Terrorism Financing: Strategies, Challenges, and Future Directions
AUTHORS:
Abdallah Uwihoreye, Moyofoluwa Adekunle
KEYWORDS:
Terrorism Financing, Counter-Terrorism Financing (CTF), Anti-Money Laundering (AML), FATF Mutual Evaluations, Financial Intelligence Units (FIUs), Cryptocurrency and Illicit Finance, Non-Profit Organization (NPO) Oversight, Public-Private Partnerships, Risk-Based Supervision, Global Terrorism Index (GTI), Cross-Border Fund Transfers, Network Analysis, Intelligence Sharing, Financial Regulation, Violent Extremism Financing
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.13 No.10,
October
23,
2025
ABSTRACT: Terrorism financing remains a critical global security threat, enabling terrorist organizations to mobilize resources, recruit operatives, and orchestrate violence worldwide. This study investigates the evolving mechanisms of terrorist financing, evaluates the effectiveness and limitations of current countermeasures, and proposes strategic innovations for an enhanced global response. Terrorism financing constitutes a persistent and dynamic global threat, facilitating the execution of violent acts, recruitment, propaganda dissemination, and operational sustainability of terrorist organizations. Despite concerted global efforts to combat terrorism financing, the evolving nature of financial technologies, the complexity of transnational financial systems, and the adaptability of terrorist networks present substantial challenges. This study seeks to enhance the effectiveness of counter-terrorism financing (CTF) strategies by critically analyzing current approaches, identifying systemic vulnerabilities, and proposing data-driven, innovative, and context-sensitive solutions. Utilizing a mixed-methods research design, the study integrates quantitative analyses of financial transaction data and mutual evaluation reports from institutions such as the Financial Action Task Force (FATF), FINTRAC, the IMF, and the World Bank, with qualitative insights derived from expert webinars, conferences, and policy documents. Analytical tools, including Power BI, ArcGIS, and i2 Analyst’s Notebook, were employed to examine trends, visualize financial flows, and map social networks within terrorism financing ecosystems. The research focused on several hypotheses concerning the diversity of financing methods, effectiveness and gaps in existing regulations, and the potential for strategic innovations in CTF. Findings indicate that significant vulnerabilities persist in global CTF frameworks, particularly in relation to non-profit organizations (NPOs), targeted financial sanctions, and cross-border money transfers. Countries such as Iraq, Lebanon, and Pakistan are frequently associated with complex financing networks, while money service businesses (MSBs) and crowdfunding platforms have emerged as high-risk vectors for illicit transactions. Moreover, inadequate intelligence sharing, deficiencies in regulatory harmonization, and technological exploitation through cryptocurrencies and cyber-resources further compromise global efforts. The study underscores the urgent need to strengthen regulatory compliance with FATF recommendations, enhance risk-based supervision, and foster international cooperation through data sharing and joint enforcement mechanisms. It advocates for capacity building, especially in high-risk jurisdictions, and recommends integrating counter-violent extremism (CVE) strategies with financial intelligence to proactively disrupt radicalization pipelines. The research also highlights the importance of leveraging public-private partnerships and emerging technologies to improve detection, analysis, and response mechanisms. Ultimately, this study contributes a nuanced understanding of the terrorism financing landscape and provides actionable, evidence-based recommendations to inform policy, enforcement, and academic discourse. It affirms that a comprehensive, adaptive, and multi-stakeholder approach grounded in empirical data and global collaboration is essential to mitigating the threat of terrorism financing and promoting sustainable international security.