Digital Hawala: Emerging Risks to Terror Financing and Financial Security

The rapid digitisation of finance has transformed traditional informal value-transfer systems. In September 2026, the Financial Action Task Force (FATF) released Investigating Professional Money Laundering, Underground Banking, and the Use of Hawala and Other Similar Service Providers, highlighting the growing exploitation of underground banking, hawala and other similar service providers (HOSSPs) for illicit finance.

From Traditional Hawala to Digital Hawala

  • Hawala is an informal value-transfer mechanism that enables the transfer of money or equivalent value outside conventional banking channels, relying on intermediaries and settlement through cash, trade or other value transfers.
  • FATF notes that such systems can serve legitimate remittance ....
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