Digital hawala is creating new challenges for financial institutions seeking to detect money laundering and terrorist financing, according to analysis from financial crime technology provider ZIGRAM, as informal value-transfer networks increasingly use digital communication, payment services and virtual assets to move value beyond the visibility of individual institutions.

ZIGRAM’s analysis highlights findings from a September 2026 assessment by the Financial Action Task Force (FATF), which found that nearly 70% of respondents had identified new technologies being incorporated into underground banking and hawala-related activity. The findings underline how established financial crime risks are evolving alongside digital payment infrastructure.

Hawala operates through intermediaries who arrange for equivalent value to reach a recipient while settling their own obligations separately, using mechanisms such as cash, trade and netting. Rather than requiring a corresponding bank transfer for every customer instruction, the system relies on trust and relationships between operators. Although hawala can support legitimate remittance needs, including transfers made by migrant workers, its networks can also be exploited for financial crime.

Digital tools are changing how these arrangements operate. Messaging applications can facilitate communication between intermediaries, while bank transfers, mobile wallets, FinTech applications and instant payments provide ways for customers to initiate transactions. Virtual assets, including stablecoins, may also be used to settle balances between operators. These developments can increase the speed and reach of networks, with some transfers completed within hours.

For banks, FinTechs, digital asset platforms, insurers and capital markets firms, the central challenge is that visible payment records may reveal only part of the activity.

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