The fintech revolution was promised as a great equaliser, a “frictionless” future where capital flows at the speed of light to the furthest corners of the globe.
Yet, for every unbanked entrepreneur in Lagos empowered by a digital wallet, a “shadow” counterpart exploits the same architecture to move blood money.
The industry faces a reckoning: the very features that define fintech-anonymity, speed, and decentralisation – are being weaponised by bad actors to fund global instability.
The digital shadow: when speed facilitates slaughter
The efficiency of modern payment rails has created a structural vulnerability.
According to the Financial Action Task Force (FATF) 2025 Report, there is a “marked increase in the mixed use of diverse methods of financing and the integration of digital technologies with conventional techniques.”
Terrorist organisations are no longer relying solely on bulky cash shipments; they are integrating into the same API-driven ecosystems managed by the executives reading this article.
Case study: A look into the crisis in Nigeria
Nigeria serves as a harrowing example of how local instability becomes a global financial problem.
While international narratives often frame the violence as religious persecution, the reality is a diffuse crisis of banditry, farmer-herder clashes, and jihadist insurgency.
“Insecurity affects everyone, without distinction of religion or ethnicity,” warns Mohamed Malik Fall, the UN resident and humanitarian coordinator.
Behind this violence is a sophisticated financial engine. From the kidnapping of 160 worshippers in Kaduna State to the displacement of 3.5 million people, every act of aggression requires a “paper trail” of logistics, weapons, and fuel, much of which is now facilitated through mobile money and informal digital value transfer systems.
For fintech leaders, the mandate is clear: follow the trail or inadvertently fund the tragedy.
The US$158 billion illicit tsunami
The scale of the “dark side” is no longer anecdotal. New data from TRM Labs’ 2026 Crypto Crime Report reveals that illicit cryptocurrency volume reached an all-time high of US$158 billion (£124 billion GBP) in 2025, a staggering 145% increase from the previous year.
While illicit activity as a percentage of total volume fell slightly to 1.2%, the absolute value of “dirty” capital circulating through digital protocols is high enough to destabilise regional economies and sustain private armies.
Algorithmic accountability and the regulatory hammer
The days of “move fast and break things” are ending in a flurry of litigation.
In the first half of 2025 alone, global regulatory fines for AML (Anti-Money Laundering) violations surged by 417%, totalling approximately $1.23 billion (£965 million), according to ComplyAdvantage.
- Cryptocurrency firms: Over $1 billion in fines.
- Payments and Fintechs: Over $160 million in fines.
These aren’t just “cost of doing business” figures; they represent a fundamental lack of oversight in high-growth firms that prioritised customer acquisition over compliance integrity.
The role of AI: more impactful than boots on the ground
In the fight against terrorism, the keyboard is becoming mightier than the rifle.
Fintech infrastructure allows for the surgical blocking of financing flows, which can be more effective than physical military intervention.
Research published in MDPI’s Journal of Risk and Financial Management demonstrates that ensemble machine learning models can now detect over 90% of suspicious transactions in migrant remittances, a primary channel for micro-financing lone-wolf attacks.
By identifying “outlier” patterns in real time, fintechs can starve insurgencies of resources before they reach the front line.
Stablecoins: the new frontier for illicit actors
While Bitcoin often grabs the headlines, the FATF 2025 update notes that “most on-chain illicit activity now involves stablecoins.”
The price stability of stablecoins makes them the preferred medium for drug traffickers and terrorist financiers who need to store value without the volatility of traditional crypto assets. They’re comparable to cash in some ways, but in digital form.
For executives, this means that “stable” products require even more rigorous surveillance than their speculative counterparts.
The moral cost of technological bias
The “dark side” isn’t just about crime; it’s about exclusion. Academic research suggests that “algorithms may harbour unintended biases that lead to discrimination in service delivery.”
When we automate security surveillance, we risk marginalising vulnerable populations who are already “deprived of the ability to live from their work and preserve their dignity,” as Mohamed Malik Fall notes regarding Nigeria’s displaced millions.
Transparency as a competitive advantage
In an era of “techno-stress” and waning consumer trust, transparency is no longer a legal burden – it is a brand asset.
Executives must move beyond “technical compliance” to “effective compliance.” This involves building robust public-private partnerships (PPPs) to share data on emerging threat actors.
“The industry may be moving beyond pure disruption towards collaborative transformation,” notes the World Economic Forum’s 2025 Future of Global Fintech Report.
Conclusion: securing the future of finance
The fintech industry stands at a crossroads. We can continue to provide the rails for an increasingly violent world, or we can use our unprecedented data visibility to act as the first line of defence.
Following the paper trail is not just a regulatory requirement; it is a moral imperative to prevent the spread of terrorism and protect the very markets we seek to serve.