Impact case study database

Improving understanding of the threats posed by terrorism financing

Research grants ( G1, G2) and related research formed the basis for a series of counter-terrorism financing (CTF) training seminars in 2018 and 2019 to lead organisations in the field including representatives of North Atlantic Treaty Organisation (NATO), the European Union Agency for Law Enforcement (EUROPOL) and the European Union Agency for Law Enforcement Training (CEPOL). Involving a wide range of law enforcement agencies, the seminars had a substantial influence on understanding and practice on how these organisations have subsequently addressed issues of terrorism financing. Stakeholders were, as a result, better equipped to understand the expansion of the funding streams used by terrorism financiers including the use of crypto-assets and social media platforms.

Seminar organiser, Price Waterhouse Coopers (PWC), confirmed that Professor Ryder’s research had altered perceptions of the traditional funding mechanisms used by terrorism financiers. Whereas law enforcement agencies had historically focused on funding models including state sponsorship and private individuals, Ryder’s work had illustrated the need to move away from the money laundering model, towards the threat posed by so-called ‘lone wolf terrorists.’ This has benefited the financial services sector and changed behaviour with regards to operational and strategic approaches. According to a partner at PWC’s Financial Crime Team:

‘financial investigators now look at open source data which can be accessed from social media platforms to obtain a more holistic understanding of the suspected terrorism financier’ ( S1).

‘PwC have developed a closer working relationship with social media platforms and cryptoasset providers. This has resulted in an improvement in the exchange of information between law enforcement agencies and private corporations. This has been beneficial because it has improved the mechanisms we have used to tackle terrorism financing’ ( S1).

LexisNexis Risk Solutions (LNRS), a company advising industry and government on predicting and managing risk, also stated that Professor Ryder’s research had been valuable in the findings it was able to share with experts in the industry indicating that the research:

‘played an integral role in our Money Laundering Exposed initiative which highlighted the true cost of financial crime on society… Through his continued participation in our public facing events, we have been able to share Professor Ryder’s insight with our extensive financial crime compliance audience’ ( S2) .

The research also provided the Dutch police with instruments enabling a more strategic approach to counter-terrorism financing (CTF) investigations. A senior member of the Dutch counter terrorism unit confirmed that Professor Ryder’s seminar in June 2019 had had a profound effect on herself and her colleagues and that the research had ‘ changed our way of investigating’ ( S3). They had learned:

‘how to use social media to search for financial evidence (something I'd never used before). This is now something I regularly do in my investigations. My colleagues in my unit also use the information Nicholas provided in their investigations (to search for financial links through social media platforms in their investigations into terrorist threats)’ ( S3).

NATO’s Director of the Centre of Excellence-Defence Against Terrorism at the time stated that as a result of the research and corresponding seminar in February 2018 ‘ more than 53 participants from 24 different nations are now better prepared to the contemporary challenges we face…in responding to the threat of terrorism’ ( S4).

Professor Ryder’s research also enabled a successful bid to Innovate UK ( G1) in collaboration with UK-based technology company Synalogik. This had enabled initial work in the second half of 2020, to develop a platform to automate data analysis from multiple data sources to provide actionable intelligence rapidly and at much reduced cost compared to existing approaches. Innovate UK described this project as:

‘one of the strongest on record’ with the project receiving ‘one of the highest-ranking scores in recent history, due to the complexity and perceptive problem analysis identified by Professor Ryder’ ( S4).

Synalogik believe that the ongoing project will contribute towards:

‘reducing mainstream terrorist financial activity within the UK and perhaps internationally longer-term. The strategy is based upon the technological advances, which will be implemented based on the structured analysis and research of Professor Ryder’ ( S5).

Financial crime and policymakersIn 2019, Professor Ryder’s research underpinned work by Transparency International, a global NGO tasked with combating government corruption. This provided a detailed and independent analysis of the effectiveness of the UK’s financial crime legislation and enforcement stance towards money laundering and corporate economic crime. Professor Ryder’s work is reported to have played a key role in supporting this analysis:

‘the central argument of our advocacy to government has been heavily informed by discussion with and articles and book chapters with Nicholas’ ( S6).

Crucially, the UK Government was informed through this work that:

‘not a single UK financial institution has faced criminal charges as a result of the 2008 financial crisis despite economic crime being a key contributing factor. Economic crimes…have ultimately caused far-reaching harm and significantly held back global development. These points were taken from Nicholas’ book The Financial Crisis and White-Collar Crime: The Perfect Storm’ ( S6).

In 2019, Professor Ryder submitted written evidence to both Houses of Parliament through the Treasury Select Committee Economic Crime Inquiry and House of Lords Committee Inquiry on the Bribery Act 2010 ( S7, S8). Professor Ryder responded to the Treasury Select Committee’s questions on money laundering, the financing of terrorism, the respective legislative frameworks, regulatory agencies and the enforcement of financial crime legislation in the UK ( R3). The submission to the House of Lords Committee Inquiry was able to present new evidence that the Financial Conduct Authority was potentially able to use its existing enforcement powers (financial regulation laws) to cover bribery and corruption. Thus, in response to Ryder’s evidence, the Committee acknowledged that:

‘The Financial Conduct Authority (FCA) has the capacity to impose fines on regulated companies for lax procedures in relation to bribery and corruption, under section 206(1) of the Financial Services and Markets Act 2000’ ( S8).

The findings from this research ( R3) extended beyond the United Kingdom being cited by the Law Reform Commission of Ireland in its 2018 Law Reform Commission report Regulatory Powers and Corporate Offences, Volume 2 (LRC 199-2018). A Deputy Director of Research at the organisation noted that:

‘ on the basis of this [Ryder’s] research…the Commission ultimately recommended that a failure to prevent model should be available, on a case-by-case basis, as an alternative to a due diligence model for strict liability offences under Irish law’ ( S9).

The research influenced the conclusions, findings and recommendations of the Irish Law Reform Commission review ( S10).