Publication: New Technologies, New Risks?
Innovation and Countering the Financing of Terrorism
Loading...
Date
2010
ISSN
Published
2010
Author(s)
Editor(s)
Abstract
Recent developments in the way financial services are delivered have provided both opportunities for economic development and prompted fears of their attractiveness for crimes such as terrorist financing. This paper explores four innovations, value cards, mobile financial services, online banking and payments, and digital currencies, outlining how they work, analyzing their risks, and identifying some ways in which governments and providers are attempting to reduce their attractiveness to financiers of terrorism. Determining what the actual risks are is critical to ensuring that laws and regulations balance both the need to protect integrity in the market and to create an environment friendly to business and empowering to the poor. The paper concludes that these new methods of payment do not offer particular usefulness to terrorist financiers. However, some of these channels could be attractive for general criminal abuse because they have an ambiguous place in the legal regime. Providers therefore, may not know about or elect to properly mitigate risks. The industry is encouraged to work within itself to share information to prevent and detect criminal activity. Governments should consult with industry in deciding regulation and industry should notify government prior to rolling out a new service. This will make government oversight more effective. Lastly, since many of these services are international in scope, government coordination and awareness rising is central.
Link to Data Set
Citation
“Zerzan, Andrew. 2010. New Technologies, New Risks?
Innovation and Countering the Financing of Terrorism. World Bank Working Paper ; No. 174. © World Bank. http://hdl.handle.net/10986/5918 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication A Novel Tobacco Market Diversification(World Bank, Washington, DC, 2022-04-27)In this working paper, an exploration of available data and information is conducted and findings presented, to support the view that the dichotomous business model and related harm reduction narrative promoted nowadays by the tobacco industry, merits scrutiny by the international community. The promotion of e-cigarettes as welfare enhancing in rich countries, particularly because they are posited to help adult smokers quit, tends to obfuscate a dire reality. The same tobacco industry that promotes (e-cigarettes as harm reduction in rich countries, derives the bulk of its profits by selling cigarettes in lower income countries.Publication Environmental Implications of a Central Bank Digital Currency (CBDC)(Washington, DC : World Bank, 2022-07)Two-thirds of central banks in the East Asia and Pacific (EAP) region have started researching or testing the implementation of a Central Bank Digital Currency (CBDC). At the same time, the region accounts for one-third of world CO2 emissions and is vulnerable to climate risks. As the Group of 7 (G7), European Central Bank (ECB), and Bank of England (BoE) have stated in their public statements, it is increasingly important to consider environmental impact when designing CBDC. However, only a few brief studies have been done on this subject, which will be crucial for the region. This Note explores the environmental implications of CBDC by comparing technical mechanisms and energy consumption within its distributed structure. It also illustrates differences in ecological footprint between CBDC and other payment methods (cryptocurrency, cash, and card networks). As the legitimacy of CBDC is backed by the trust of central banks, CBDC does not need to prove its legitimacy through its technological structure. Therefore, CBDC does not require the energy-intensive consensus or mining mechanisms used by a cryptocurrency, so its energy consumption is lower (comparable to that of a credit card system). CBDC can be designed to use various systems, such as Real Time Gross Settlement (RTGS), Distributed Ledger Technology (DLT), or a mixture of both. Careful deliberation to meet the objectives and implications will be important as CBDC can be a catalyst for financial innovation.Publication Sustainable Cities Towards A Green, Resilient and Inclusive Recovery(Washington, DC, 2022-03)Cities are key to unlocking a climate-smart future for all, as they account for more than 50 percent of the global population, about 70 percent of global energy-related CO2 emissions and 80 percent of global GDP. Urban centers’ share of emissions is expected to grow as the urban population is projected to increase by 2.3 billion people by 20502. As the world recovers from the COVID-19 crisis, cities will present a huge opportunity to rebuild in a way that is climate friendly and meets some of the world’s ambitious climate targets. Cities are viewed as the source of and the solution to many of today's economic, social, and environmental challenges. This is not only because of the concentration of population and economic assets in urban areas, but also because local authorities perform key functions that impact the quality of life of their residents. From an urban management perspective, the leading resource and knowledge sharing platform is the GEF funded Global Platform for Sustainable Cities (GPSC), hosted by the World Bank. The GPSC states that achieving sustainability requires the balanced accomplishment of outcomes against four pillars, namely (1) robust economic growth, prosperity, and competitiveness across all parts of the city; (2) protection and conservation of ecosystems and natural resources into perpetuity; (3) mitigation of greenhouse gas (GHG) emissions while fostering overall city resilience; and (4) inclusiveness and livability, mainly through the reduction of city poverty levels and inequality. The Urban Sustainability Framework (USF), developed to outline the areas of work and support by the GPSC, offers a very useful representation of both outcomes as well as enabling actions and requirements (such as spatial data and good governance) cities could focus on.Publication Structured Lesson Plans for Literacy Instruction(World Bank, Washington, DC, 2022-03-31)Literacy is the cornerstone of education, and a driver of human economic, social, and civic wellbeing. Despite its importance, far too many children fail to become literate. The World Bank uses a measure called learning poverty to indicate when a child cannot read and understand an age-appropriate text by age ten. The best available data showed that more than two-thirds of children in low- and middle-income countries suffer learning poverty. The World Bank is committed to helping countries achieve the learning target: to cut learning poverty by at least half by 2030. Achieving better outcomes in literacy requires a comprehensive effort in many domains. One of the most important is ensuring that students and teachers have and use high-quality instructional materials, especially textbooks, for reading instruction. As countries and systems review their literacy teaching and learning materials, they will want to compare them to the materials from other countries and systems. The purpose of the compendium is to allow such reviews and comparisons by grouping a critical mass of structured pedagogy lesson plans and related materials in one place.Publication WBG COVID-19 Crisis Response Operational Update(Washington, DC, 2022-03-31)This note provides an update on the WBG’s COVID-19 Crisis Response, outlined in June 2020 to help developing countries address the impacts of the pandemic while maintaining a line of sight to long-term development goals. It comprises five short sections: (I) the impacts of COVID-19 and compounding crises on developing countries, (II) an update on the WBG’s operational crisis response and priorities moving forward, (III) the critical role of international coordination, (IV) WBG financing framework for GRID, and (V) concluding remarks.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Mobile Money Services Development : The Cases of the Republic of Korea and Uganda(World Bank, Washington, DC, 2014-02)This study intends to increase understanding of how different types of mobile money services have developed in different environments. For this purpose, two countries were selected, the Republic of Korea and Uganda. From these study cases, some conclusions emerge. The development of mobile banking services can appear at different stages of financial sector development, but it requires a vibrant and competitive telecommunications sector. The regulatory environment does not need to be very sophisticated for the mobile industry to emerge. However, some elements appear to be important. The legal framework should allow (or at least not explicitly forbid) nonbank financial institutions to issue money and use banking agents or correspondents. To ensure wider use of the service by the population, it is important to educate the population on the benefits of mobile money services.Publication Digital Identity Toolkit : A Guide for Stakeholders in Africa(Washington, DC, 2014-06)Digital identity, or electronic identity (eID), offers developing nations a unique opportunity to accelerate the pace of their national progress. It changes the way services are delivered, helps grow a country's digital economy, and supports effective safety nets for disadvantaged and impoverished populations. Though digital identity is an opportunity, it raises important considerations with respect to privacy, cost, capacity, and long-term viability. This report provides a strategic view of the role of identification in a country's national development, as well as a tactical view of the building blocks and policy choices needed for setting up eID in a developing country. The report presents a conceptual overview of digital identity management practices, providing a set of guidelines at a national level that policymakers can find helpful as they begin to think about modernizing the identity infrastructure of their country into eID. The report also provides an operating knowledge of the terminology and concepts used in identity management and an exposition of the functional blocks that must be in place. Policy considerations are referenced at the end of the report that governments can use as they contemplate a digital identity program. Given its abridged nature, the report is intended to be insightful and detailed, though not exhaustive. Several important topics related to eID are noted though deserve further discussion, including: economic and financial analysis, the development and setup of a national civil register, and cross-border aspects of eID. The building blocks, as discussed, can help ensure that a secure, robust and reliable digital identity platform can serve the development needs of a country for the foreseeable future.Publication Malaysia : Sustainable Adoption of Innovative Channels for Financial Inclusion(Washington, DC, 2013)This note focuses on the regulatory and market environment relevant to the emergence and adoption of innovative delivery channels to promote greater financial inclusion in Malaysia. Financial inclusion is defined here not only as providing access to financial services, but also as enabling and promoting increased usage of those services. Achieving higher levels of access and usage requires an extensive and efficient retail payments infrastructure, affordable financial products that meet the needs of customers, and actions to address cultural and social factors that influence customers' choices. This note therefore considers the implications for financial inclusion of Malaysia's evolving retail payments landscape and the country's potential to go beyond providing physical access to services. Malaysia has achieved remarkable progress in providing access to basic bank accounts to the majority of the population and credit to small and medium enterprises. Increasing access and usage will depend, to a large extent, on greater availability of technology-enabled channels that go beyond brick-and-mortar branches and leverage on existing third-party infrastructure such as retailers and neighborhood shops, which are usually referred to as 'retail agents.' There are only a few regulatory obstacles for the use of agents by banks (there is already an enabling framework for nonbanks) and for development of other alternative delivery modes. Relevant regulation is generally permissive while maintaining minimum standards for the safety and security of transactions and the protection of users. Financial inclusion is defined in this Note as a situation where financial services are not only readily accessible, but also widely used by the majority of the population in meeting all or most of their financial needs. After a brief overview of the state of access to basic financial services and the institutional potential for expansion in Malaysia, the note analyzes the market environment and the policy and regulatory frameworks that may have an impact on the emergence and sustainability of delivery modes that could cater to underserved and un-served communities.Publication IFC Mobile Money Study 2011(Washington, DC, 2011)Mobile money (m-money) refers to the use of mobile phones to perform financial and banking functions. However, the technology is far ahead of the infrastructure of financial and technical network service providers needed for an m-money system to function. This study was undertaken to increase the understanding of m-money and to address key issues in scaling up development of m-money services globally. It examines the potential demand for m-money, national regulatory environments, major obstacles, and the requirements of potential service providers and networks to run m-money services as viable businesses. Four countries - Brazil, Nigeria, Sri Lanka, and Thailand - each of which represents a different world region, socioeconomic situation, and financial sector context, were included in the study. The countries were analyzed in terms of m-money business models, money flows and demand, potential user perceptions and behavior, regulations, and agent networks. In each country, an m-money service provider acted as a partner institution. To place these four countries in the wider context of m-money developments, three case studies - Japan, Kenya, and the United States were also examined. The size of potential opportunities for m-money were quantified through demand estimates and compared with estimates in the three reference countries. Chapter one provides an introduction to the study's objectives and context, and explains the definition and positioning of m-money used in this report. Chapter two presents case studies of the prominent m-money countries Kenya and Japan, as well as the United States. Chapter three presents an overview of the four country study findings and analysis. Chapter four describes the m-money business models adopted in each country and the challenges that each country faces. Chapter five concludes by placing each country along an m-money demand curve and explains the impact of this placement on the development of an opportunity for m-money.Publication Improving Payment Mechanisms in Cash-Based Safety Net Programs(World Bank, Washington, DC, 2013-08)Cash transfers have proliferated in the past decade as key policy instruments to tackle vulnerability and inequality. Payment mechanisms (PMs), the backbone of cash transfers, are the channels through which cash travels from the funding source to the hands of beneficiaries. In theory, the harmonization of payment flows in PMs with other program processes is critical to delivering the right benefit to the right people at the right time while minimizing costs. In reality, however, PMs tend to remain disconnected, rendering payments inefficient and plagued by error, fraud and corruption. In recent years, program operators, financial institutions, and technology innovators have developed strategies for streamlining payment flows. These innovations, if properly integrated into program management through a Management Information System (MIS) and supported by rigorous outreach, can not only promote efficiency and transparency but also ensure effectiveness. This paper provides a framework for integrating PMs within program management. It walks the reader through seven basic steps to process payments. It does so by articulating the flow of beneficiary information and funds from the point of beneficiary enrollment to payment reconciliation and grievance redress. It also looks at the framework through the lenses of different cash transfer interventions and the cases of Kenya, Rwanda, and Mexico. The paper concludes that to execute successful PMs it is key to: (i) integrate payments within an MIS; (ii) adopt a cost-effective mix of traditional and technology instruments suitable to the country's context in the short and long run; (iii) decentralize the control and accountability of service provision across government levels; (iv) understand the capacity and incentives of stakeholders; (v) provide manuals, training and information to key players; and (vi) enforce payment parameters and penalize their violation.
Users also downloaded
Showing related downloaded files
Publication Impact Evaluation in Practice, Second Edition(Washington, DC: Inter-American Development Bank and World Bank, 2016-09-13)The second edition of the Impact Evaluation in Practice handbook is a comprehensive and accessible introduction to impact evaluation for policy makers and development practitioners. First published in 2011, it has been used widely across the development and academic communities. The book incorporates real-world examples to present practical guidelines for designing and implementing impact evaluations. Readers will gain an understanding of impact evaluations and the best ways to use them to design evidence-based policies and programs. The updated version covers the newest techniques for evaluating programs and includes state-of-the-art implementation advice, as well as an expanded set of examples and case studies that draw on recent development challenges. It also includes new material on research ethics and partnerships to conduct impact evaluation. The handbook is divided into four sections: Part One discusses what to evaluate and why; Part Two presents the main impact evaluation methods; Part Three addresses how to manage impact evaluations; Part Four reviews impact evaluation sampling and data collection. Case studies illustrate different applications of impact evaluations. The book links to complementary instructional material available online, including an applied case as well as questions and answers. The updated second edition will be a valuable resource for the international development community, universities, and policy makers looking to build better evidence around what works in development.Publication Digital Progress and Trends Report 2023(Washington, DC: World Bank, 2024-03-05)Digitalization is the transformational opportunity of our time. The digital sector has become a powerhouse of innovation, economic growth, and job creation. Value added in the IT services sector grew at 8 percent annually during 2000–22, nearly twice as fast as the global economy. Employment growth in IT services reached 7 percent annually, six times higher than total employment growth. The diffusion and adoption of digital technologies are just as critical as their invention. Digital uptake has accelerated since the COVID-19 pandemic, with 1.5 billion new internet users added from 2018 to 2022. The share of firms investing in digital solutions around the world has more than doubled from 2020 to 2022. Low-income countries, vulnerable populations, and small firms, however, have been falling behind, while transformative digital innovations such as artificial intelligence (AI) have been accelerating in higher-income countries. Although more than 90 percent of the population in high-income countries was online in 2022, only one in four people in low-income countries used the internet, and the speed of their connection was typically only a small fraction of that in wealthier countries. As businesses in technologically advanced countries integrate generative AI into their products and services, less than half of the businesses in many low- and middle-income countries have an internet connection. The growing digital divide is exacerbating the poverty and productivity gaps between richer and poorer economies. The Digital Progress and Trends Report series will track global digitalization progress and highlight policy trends, debates, and implications for low- and middle-income countries. The series adds to the global efforts to study the progress and trends of digitalization in two main ways: · By compiling, curating, and analyzing data from diverse sources to present a comprehensive picture of digitalization in low- and middle-income countries, including in-depth analyses on understudied topics. · By developing insights on policy opportunities, challenges, and debates and reflecting the perspectives of various stakeholders and the World Bank’s operational experiences. This report, the first in the series, aims to inform evidence-based policy making and motivate action among internal and external audiences and stakeholders. The report will bring global attention to high-performing countries that have valuable experience to share as well as to areas where efforts will need to be redoubled.Publication World Development Report 2004(World Bank, 2003)Too often, services fail poor people in access, in quality, and in affordability. But the fact that there are striking examples where basic services such as water, sanitation, health, education, and electricity do work for poor people means that governments and citizens can do a better job of providing them. Learning from success and understanding the sources of failure, this year’s World Development Report, argues that services can be improved by putting poor people at the center of service provision. How? By enabling the poor to monitor and discipline service providers, by amplifying their voice in policymaking, and by strengthening the incentives for providers to serve the poor. Freedom from illness and freedom from illiteracy are two of the most important ways poor people can escape from poverty. To achieve these goals, economic growth and financial resources are of course necessary, but they are not enough. The World Development Report provides a practical framework for making the services that contribute to human development work for poor people. With this framework, citizens, governments, and donors can take action and accelerate progress toward the common objective of poverty reduction, as specified in the Millennium Development Goals.Publication Empowerment in Practice : From Analysis to Implementation(Washington, DC: World Bank, 2006)This book represents an effort to present an easily accessible framework to readers, especially those for whom empowerment remains a puzzling development concern, conceptually and in application. The book is divided into two parts. Part 1 explains how the empowerment framework can be used for understanding, measuring, monitoring, and operationalizing empowerment policy and practice. Part 2 presents summaries of each of the five country studies, using them to discuss how the empowerment framework can be applied in very different country and sector contexts and what lessons can be learned from these test cases. While this book can offer only a limited empirical basis for the positive association between empowerment and development outcomes, it does add to the body of work supporting the existence of such a relationship. Perhaps more importantly, it also provides a framework for future research to test the association and to prioritize practical interventions seeking to empower individuals and groups.Publication Mobile Money and the Economy(Published by Oxford University Press on behalf of the World Bank, 2018-08)Mobile money is a recent innovation that provides financial transaction services via mobile phone, including to the unbanked global poor. The technology has spread rapidly in the developing world, “leapfrogging” the provision of formal banking services by solving the problems of weak institutional infrastructure and the cost structure of conventional banking. This article examines the evolution of mobile money and its important role in widening financial inclusion. It explores the channels of economic influence of mobile money from a micro perspective, and critically reviews the empirical literature on the economic impact of mobile money. The evidence convincingly suggests that mobile money fosters risk-sharing, but direct evidence of the promotion of welfare and saving is still mostly rather less robust.