The problems of preventing the financing of lone wolf terrorism

Updated: Dec 10, 2019

In light of the recent London Bridge terror attack, it seems prudent to revisit a real problem area of the financial services industry has in the countering of terrorism financing with particular focus on ‘lone wolf’ attacks.

The phenomenon of lone wolf attacks has been on the rise since the 1990s. In the last decade, a number of factors have produced a spike in terror attacks of this nature. Social media and online communication networks have been harnessed to indoctrinate and radicalise individuals as well as small groups to conduct terror attacks. The nature of these attacks represents a departure from the more typical group-network attacks of the 2000s and early 2010s.

With the existence of such a departure of the typically known terror cells, it is vital that counter terrorism finances adapt to meet this evolved threat. As FBI Director James Comey remarks “By their very nature, lone offender and small scale terrorist attacks are less vulnerable to many of the traditional tools in the counter-terror finance toolkit”. What Comey is alluding to is whether the rules and mechanisms in place to uncover the financing behind the more traditional large-scale group network attacks, can be applied to the funding streams behind these smaller attacks?

Lone wolf attacks present several issues for counter terrorism financing:

  1. Such attacks are low dollar financial transactions, thus limiting the effectiveness of traditional detection and reporting tools. Funds are normally amounts often considered too small to detect solely through the tracking of financial transactions – although the monitoring of specific patterns may help identify the illicit behaviour.

  2. Lone wolves don’t exhibit typical terrorist financing behaviour, frequently using their own clean money for the attack. Their behaviour is consistent of everyday citizens.

  3. These issues are compounded by new payment methods such as virtual currencies, crowdfunding technologies, mobile payment applications.

  4. Financial institutions are limited by law domestic to share information between institutions and across borders of the same institutions.

How can we limit this threat?

The private sector has access to tremendous wealth of financial information on individuals that the public sector simply does not. There has been a consistent growth in recent years between law enforcement and financial institutions as they seek to create public/private partnership initiatives in identifying and disrupting terrorist financing. Such initiatives are leading to better frameworks for identifying lone wolf attackers. Studies have shown that there is almost always some identifiable behaviour leading up to lone wolf attacks. The sharing of this information will provide a valuable point of entry for financial investigators as it will allow for much more effective targeting of individuals, cells or groups.

Lone wolf attackers still require funding in order to facilitate their attacks, meaning a financial footprint will always exist. Often these individuals will have ties to larger more organised groups so evidence of transactional activity will exist. With a better understanding of a lone wolf financial profile and typical behaviour, transactional monitoring can be refocussed to a more effective approach to exploiting this small financial footprint.

It is clear that more debate and discourse is required in this area. In doing so it will allow us to create a better approach to utilising the counter terrorism toolkit making us better equipped to tackle this continuing threat to our society.


By Gregory Collis, Junior Consultant at Lysis Group