The next threat isn’t a bomb, it’s a bank transfer

A terrorist doesn’t need to rely on a suitcase packed with explosives to wreak havoc. Today, the most dangerous weapon can be a routine bank transfer. A few clicks on a computer can channel money across borders in seconds, fueling violence thousands of miles away.

We have entered an era where the frontline of national security runs through financial networks. The September 11 attacks, which killed nearly 3,000 people, were financed with only $250,000 to $500,000 dollars. Two decades later, cyber-enabled financing operations can mobilize millions without ever having to move a crate of supplies. The war on terrorism has shifted from city streets to cyberspace, and the battle is now measured in milliseconds, not in bullets.

In the past, counter-terrorist financing (CTF) often meant tracking lone actors moving funds on shoestring budgets. In a study I worked on with the Royal United Services Institute, we examined these low-value transactions—the small but deadly signals that could reveal a radical preparing for violence. Those risks haven’t gone away. But today, the challenge has expanded: terrorist financing now intersects with complex networks, digital payments, and crypto flows, making behavioral detection more critical than ever.

The bigger danger today comes from state-backed organizations, particularly those supported by Iran, Qatar and Cuba. These groups no longer survive on scraps. They fund large armies, advanced weapons programs, social services, and salaries for thousands of terrorists. Their operations are disguised as legitimate businesses, and their financing is engineered to blend into the global economy, creating a terrorism financing industry that is professionalized, industrialized, and cyber-enabled.

The laundering methods used by these networks are chilling in their efficiency. A stolen sum might first be sent to a UK account, where payments are processed if the account number matches, even when the name does not. From there, the money can vanish across borders within minutes, routed through multiple jurisdictions until it is effectively unrecoverable.

Contrary to popular belief, these funds do not always hide in exotic tax havens. More often, they flow through mainstream banking hubs where legacy monitoring systems struggle to keep pace. By the time a suspicious pattern is detected, the funds are long gone, already paying for weapons, training camps, or disinformation campaigns.

Digital tools have supercharged this machinery. Entire “avatars”—fabricated companies, employees, and online profiles—are created to pass know-your-customer checks. These entities exist only to channel funds to terrorism.

At the same time, hackers launch ransomware attacks, demanding bitcoin and other cryptocurrencies. Some of these groups operate independently, while others overlap with or funnel money into terrorist campaigns. Crypto mixers and darknet markets introduce layers of obfuscation that bypass compliance teams and enable illicit funds to flow undetected.

Meanwhile, phishing and account-takeover scams target ordinary citizens, luring them into sharing card details or unknowingly transferring money overseas. Increasingly, these scams are powered by AI, making the deception more convincing and the risk of infiltration greater.

Detecting terrorist financing is significantly more challenging than detecting money laundering. Laundering investigations usually focus on the source of funds; terrorist financing, however, often looks legitimate at the source. The real red flag lies at the destination—where the money ultimately ends up.

That means dozens of small, ordinary-looking payments present a far greater security risk than single large transfers, as these micro-transactions seamlessly integrate into routine banking activity and evade conventional detection mechanisms. By the time financial institutions recognize the coordinated nature of these dispersed payments, the underlying illicit scheme has typically already achieved its objectives.

This is where advanced technology, and specifically artificial intelligence, becomes indispensable. Unlike traditional monitoring tools, AI can examine both ends of a transaction at once, identifying mismatches between declared beneficiaries and actual recipients. It can map suspicious flows across jurisdictions, detect interactions with darknet infrastructure, and reveal hidden connections between mule accounts.

Most importantly, AI can identify the nuanced or complex patterns—patterns that no human investigator would think to look for, yet that may reveal networks funneling money to violence. A handful of small transfers routed through mule accounts, or a payment to a seemingly ordinary business in a high-risk region, can set off alarms when analyzed in context.

Financial institutions may not have asked to play a role in national defense, but today they are central to it. Every anomalous transfer blocked is a potential attack disrupted. Every suspicious pattern reported to regulators and law enforcement is an opportunity to thwart funding before it translates into bloodshed.

The next attack won’t be planned only in a training camp or hidden in a shipping container. It may already be moving through the banking system, disguised as a legitimate transaction. The difference today is that we have the technology to uncover it, if we act fast enough. Our only defense is to upgrade faster than the adversaries innovate.

The war on terror now begins in the financial system. Outsmarting the criminals there means we can stop the money trail before it funds the next attack on our streets.