Certified AML Fintech Compliance
Associate (CAFCA) with verified
answers rated A+
What is Financial Crime? - correct answer ✔✔ Illegal activities that typically are economically
motivated, such as money laundering, terrorist financing, sanctions, fraud, bribery, corruption,
and tax evasion
Name the three basic stages of money laundering. - correct answer ✔✔ Placement, layering,
and integration
State the key differences between money laundering and terrorist financing. - correct answer
✔✔ Terrorist financing uses funds to support terrorist activities, but the funds are not
necessarily derived from illegal activities. Money laundering always involves the proceeds of
illegal activities, typically committed by the ultimate beneficiaries of the funds.
What are the main types of sanctions and who do they target? - correct answer ✔✔ Financial,
economic, and trade. They generally target individuals, organizations, and countries.
List the three major reasons people commit fraud, and what this model is called. - correct
answer ✔✔ The three major reasons are pressure, opportunity, and rationalization. This model
is referred to as the "Fraud Triangle".
Name two important pieces of anti-bribery and corruption legislation with extra-territorial
reach. - correct answer ✔✔ The Foreign Corrupt Practices Act in the US and The UK Bribery Act
2010.
, State two differences between tax avoidance and tax evasion. - correct answer ✔✔ Tax
avoidance uses legal practices to reduce taxes owed, whereas tax evasion uses illegal practices
to evade paying taxes owed.
Name an example of politically exposed persons (PEPs). - correct answer ✔✔ Examples of PEPs
include heads of state or heads of government, senior politicians, senior government, judicial
and military officials, senior executives of state-owned corporations, and important political
party officials, as well as their families and close associates. Usually, PEP positions are specified
in each jurisdiction's AML regulation.
State an example of high-risk customers that Fin Techs might encounter. - correct answer ✔✔
Examples include customers who sign up using false identities, customers who lie about the
purpose of business relationships, front companies, companies with complex ownership
structures, and customers linked to organized crime groups.
Name some jurisdiction risks and red flags in the FinTech sector. - correct answer ✔✔
Jurisdictions with higher risk include those with poor AML regulations, high levels of corruption,
inadequate frameworks to prevent financing of terrorism, and economic sanctions in place.
Jurisdictions that are tax havens and those known to host shell companies are also high risk.
Why are Fin Techs often considered to be high-risk companies? - correct answer ✔✔ Because of
the lack of face-to-face encounters and the speed with which a person can access financial
products.
What are some Fin Tech risks and red flags? - correct answer ✔✔ Non face-to-face customer
interactions and onboarding, cryptocurrencies and anonymity, faster payments, new
technologies and their potential vulnerabilities, unproven business models, and undeveloped
governance frameworks.
What are the benefits to using banking as a service provider? - correct answer ✔✔ Faster speed
to market and overcoming regulatory complexities.
Associate (CAFCA) with verified
answers rated A+
What is Financial Crime? - correct answer ✔✔ Illegal activities that typically are economically
motivated, such as money laundering, terrorist financing, sanctions, fraud, bribery, corruption,
and tax evasion
Name the three basic stages of money laundering. - correct answer ✔✔ Placement, layering,
and integration
State the key differences between money laundering and terrorist financing. - correct answer
✔✔ Terrorist financing uses funds to support terrorist activities, but the funds are not
necessarily derived from illegal activities. Money laundering always involves the proceeds of
illegal activities, typically committed by the ultimate beneficiaries of the funds.
What are the main types of sanctions and who do they target? - correct answer ✔✔ Financial,
economic, and trade. They generally target individuals, organizations, and countries.
List the three major reasons people commit fraud, and what this model is called. - correct
answer ✔✔ The three major reasons are pressure, opportunity, and rationalization. This model
is referred to as the "Fraud Triangle".
Name two important pieces of anti-bribery and corruption legislation with extra-territorial
reach. - correct answer ✔✔ The Foreign Corrupt Practices Act in the US and The UK Bribery Act
2010.
, State two differences between tax avoidance and tax evasion. - correct answer ✔✔ Tax
avoidance uses legal practices to reduce taxes owed, whereas tax evasion uses illegal practices
to evade paying taxes owed.
Name an example of politically exposed persons (PEPs). - correct answer ✔✔ Examples of PEPs
include heads of state or heads of government, senior politicians, senior government, judicial
and military officials, senior executives of state-owned corporations, and important political
party officials, as well as their families and close associates. Usually, PEP positions are specified
in each jurisdiction's AML regulation.
State an example of high-risk customers that Fin Techs might encounter. - correct answer ✔✔
Examples include customers who sign up using false identities, customers who lie about the
purpose of business relationships, front companies, companies with complex ownership
structures, and customers linked to organized crime groups.
Name some jurisdiction risks and red flags in the FinTech sector. - correct answer ✔✔
Jurisdictions with higher risk include those with poor AML regulations, high levels of corruption,
inadequate frameworks to prevent financing of terrorism, and economic sanctions in place.
Jurisdictions that are tax havens and those known to host shell companies are also high risk.
Why are Fin Techs often considered to be high-risk companies? - correct answer ✔✔ Because of
the lack of face-to-face encounters and the speed with which a person can access financial
products.
What are some Fin Tech risks and red flags? - correct answer ✔✔ Non face-to-face customer
interactions and onboarding, cryptocurrencies and anonymity, faster payments, new
technologies and their potential vulnerabilities, unproven business models, and undeveloped
governance frameworks.
What are the benefits to using banking as a service provider? - correct answer ✔✔ Faster speed
to market and overcoming regulatory complexities.
