CAFCA Basic Questions with Verified Correct
Detailed Solutions Graded A+ latest update
2025
What factors do transaction monitoring
scenarios analyze? --- correct precise answers ---Transaction
monitoring scenarios
analyze factors such as industry size, jurisdiction, and customer
activity when
setting alerts.
What does it mean to "use contextual
information" when clearing a transaction
monitoring alert? --- correct precise answers ---To consider the
nature of the rule
that flagged the transaction, as well as the wider customer profile and
transaction
history.
Name red flags that could point to corporate
,money laundering through shell companies. --- correct precise
answers ---Shell companies exist only on
paper with no active business
operations. Red flags include: companies with
no public profile, no clear business, and a poorly
populated or nonexistent website.
Name red flags that arise during payment
screening that might point to sanctions violations. --- correct precise
answers ---Payments to a region that borders
a sanctioned jurisdiction; payments with references linked to
sanctions; payments
to charities or companies operating in
sanctioned countries; payments for high-risk or
dual-use goods; and customers or
screening counterparties with sanctioned ownership.
What is the difference between anti-fraud and AML monitoring? ---
correct precise answers ---Anti-fraud monitoring ultimately
aims to reduce an organization's
fraud losses. AML efforts are done mainly to
,comply with regulations and ensure that an
organization is not used for money laundering.
Why is it important to scale an organization's
transaction monitoring program along with its
growth? --- correct precise answers ---To monitor evolving and new
risks;
detect financial crime activity
among new customers, products, and
geographies; and quickly resolve open alerts.
What is meant by "financial inclusion" in the
context of AML obligations? --- correct precise answers ---Ensuring
that legitimate customers
have access to financial systems,
even when they cannot provide all of the
information typically required. Organizations
must balance AML risks with support for financial inclusion required
by law.
In what ways can a Fin Tech take a risk-based
, approach to balance customer risk with
customer experience at onboarding? --- correct precise answers ---
Focusing EDD measures on
customers who pose specific risks;
using technology to speed up the onboarding
process; allowing customers who are
considered low-risk to onboard with no
intervention; carefully designing onboarding
flow; and providing positive customer support.
What role does network analysis play in AML
investigations? --- correct precise answers ---Network analysis is an
investigation
tool that searches for common
traits among account holders and activities that
could link them as part of a network. Some
organizations build internal network analysis tools
whereas others use third-party investigative
software.
What are some ways to verify the credibility of
Detailed Solutions Graded A+ latest update
2025
What factors do transaction monitoring
scenarios analyze? --- correct precise answers ---Transaction
monitoring scenarios
analyze factors such as industry size, jurisdiction, and customer
activity when
setting alerts.
What does it mean to "use contextual
information" when clearing a transaction
monitoring alert? --- correct precise answers ---To consider the
nature of the rule
that flagged the transaction, as well as the wider customer profile and
transaction
history.
Name red flags that could point to corporate
,money laundering through shell companies. --- correct precise
answers ---Shell companies exist only on
paper with no active business
operations. Red flags include: companies with
no public profile, no clear business, and a poorly
populated or nonexistent website.
Name red flags that arise during payment
screening that might point to sanctions violations. --- correct precise
answers ---Payments to a region that borders
a sanctioned jurisdiction; payments with references linked to
sanctions; payments
to charities or companies operating in
sanctioned countries; payments for high-risk or
dual-use goods; and customers or
screening counterparties with sanctioned ownership.
What is the difference between anti-fraud and AML monitoring? ---
correct precise answers ---Anti-fraud monitoring ultimately
aims to reduce an organization's
fraud losses. AML efforts are done mainly to
,comply with regulations and ensure that an
organization is not used for money laundering.
Why is it important to scale an organization's
transaction monitoring program along with its
growth? --- correct precise answers ---To monitor evolving and new
risks;
detect financial crime activity
among new customers, products, and
geographies; and quickly resolve open alerts.
What is meant by "financial inclusion" in the
context of AML obligations? --- correct precise answers ---Ensuring
that legitimate customers
have access to financial systems,
even when they cannot provide all of the
information typically required. Organizations
must balance AML risks with support for financial inclusion required
by law.
In what ways can a Fin Tech take a risk-based
, approach to balance customer risk with
customer experience at onboarding? --- correct precise answers ---
Focusing EDD measures on
customers who pose specific risks;
using technology to speed up the onboarding
process; allowing customers who are
considered low-risk to onboard with no
intervention; carefully designing onboarding
flow; and providing positive customer support.
What role does network analysis play in AML
investigations? --- correct precise answers ---Network analysis is an
investigation
tool that searches for common
traits among account holders and activities that
could link them as part of a network. Some
organizations build internal network analysis tools
whereas others use third-party investigative
software.
What are some ways to verify the credibility of
