CAFCA EXAM CERTIFIED AML FINTECH COMPLIANCE ASSOCIATE
EXAM | ALL QUESTIONS AND CORRECT ANSWERS | ALREADY
GRADED A+ | VERIFIED ANSWERS | LATEST EXAM 2025
Why is it important for the second line of defense to be independent from
the business line? ---------CORRECT ANSWER-----------------To be
empowered to obtain access to information throughout the organization,
conduct investigations of possible breaches, and freely express and
disclose findings to senior management.
Describe the responsibilities of the money laundering reporting officer
(MLRO). ---------CORRECT ANSWER-----------------Ensuring that the
organization's AML/CFT efforts are effectively designed and implemented,
handling inquiries, determining whether SARs require reporting to
authorities, and overseeing training.
For optimal effectiveness, who should perform an organization's audit? -----
----CORRECT ANSWER-----------------The audit should be independent, that
is, performed by people not involved with the organization's AML/CFT
compliance staff. The audit team should report directly to the board of
directors or a designated board committee of outside directors.
What is an organization's risk appetite? ---------CORRECT ANSWER---------
--------Risk appetite determines the type of customer it will accept, the type
of product it will offer, and the jurisdictions in which it will do business.
Why should customer risk assessments be dynamic and capable of
revision over time? ---------CORRECT ANSWER-----------------Customer risk
can change during the business relationship. Organizations need a current
understanding of customer risk so they can apply due diligence and
ongoing monitoring.
,For any financial institution, who should receive ongoing AML training? -----
----CORRECT ANSWER-----------------An organization's employees and
third parties, such as contractors and agents.
How can a FinTech prepare for a successful audit? ---------CORRECT
ANSWER-----------------Plan in advance, ensure staff availability, ensure
documentation is correct and up to date, address potential issues on an
ongoing basis throughout the year, and fully understand the audit scope.
What are two sources of internal risk in a FinTech? ---------CORRECT
ANSWER-----------------The organization's employees and internal
processes
Aside from the legal requirement, why is good recordkeeping important to
FinTechs? ---------CORRECT ANSWER-----------------It could help to defend
your organization against a money laundering or a terrorist financing
offense. It also supports law enforcement agencies to fight financial crime.
With whom can financial institutions share customer data? ---------
CORRECT ANSWER-----------------Data you hold about a customer should
be shared only with others who need to know. Many jurisdictions have
privacy and data security laws and regulations that apply to financial
institutions.
What is the advantage of independently collecting customer information in
addition to customer-completed digital forms? ---------CORRECT ANSWER-
,----------------It can be more reliable and less prone to fraud and
manipulation.
Name some common red flags when onboarding customers. ---------
CORRECT ANSWER-----------------Customers who are overly evasive,
provide documents that appear to be false, are linked to high-risk or
sanctioned jurisdictions, are PEPs or affiliated with PEPs, and are subjects
of adverse media.
When does name screening typically take place? ---------CORRECT
ANSWER-----------------Customers typically are screened at onboarding and
on an ongoing basis. Some organizations continuously rescreen customers
in real-time, and others do hourly or daily batch screening.
With regard to list management controls, how does a FinTech determine
which lists to use? ---------CORRECT ANSWER-----------------The decision is
based on geographic location, the currencies used, the business model,
where customers are based, and customer activities.
How does a Fintech determine the necessary level of verification and
research during customer onboarding? ---------CORRECT ANSWER----------
-------The level is based on the risk score given to a customer through the
customer risk assessment process and any local regulatory requirements.
Why is it crucial for CDD programs to evolve along with organizational
growth? ---------CORRECT ANSWER-----------------To accommodate new
customer types, volumes, and risks, and to prevent delays in the
onboarding process.
, What is the purpose of controls for transaction monitoring? ---------
CORRECT ANSWER-----------------The purpose of having controls for
transaction monitoring is to manage the financial crime risk to an
organization, in a risk-based approach, these controls are appropriate,
specific, and risk-based.
What factors do transaction monitoring scenarios analyze? ---------
CORRECT ANSWER-----------------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 ANSWER-----------------To
consider the nature of the rule that flagged the transaction, as well as the
wider customer profile and transaction history.
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
EXAM | ALL QUESTIONS AND CORRECT ANSWERS | ALREADY
GRADED A+ | VERIFIED ANSWERS | LATEST EXAM 2025
Why is it important for the second line of defense to be independent from
the business line? ---------CORRECT ANSWER-----------------To be
empowered to obtain access to information throughout the organization,
conduct investigations of possible breaches, and freely express and
disclose findings to senior management.
Describe the responsibilities of the money laundering reporting officer
(MLRO). ---------CORRECT ANSWER-----------------Ensuring that the
organization's AML/CFT efforts are effectively designed and implemented,
handling inquiries, determining whether SARs require reporting to
authorities, and overseeing training.
For optimal effectiveness, who should perform an organization's audit? -----
----CORRECT ANSWER-----------------The audit should be independent, that
is, performed by people not involved with the organization's AML/CFT
compliance staff. The audit team should report directly to the board of
directors or a designated board committee of outside directors.
What is an organization's risk appetite? ---------CORRECT ANSWER---------
--------Risk appetite determines the type of customer it will accept, the type
of product it will offer, and the jurisdictions in which it will do business.
Why should customer risk assessments be dynamic and capable of
revision over time? ---------CORRECT ANSWER-----------------Customer risk
can change during the business relationship. Organizations need a current
understanding of customer risk so they can apply due diligence and
ongoing monitoring.
,For any financial institution, who should receive ongoing AML training? -----
----CORRECT ANSWER-----------------An organization's employees and
third parties, such as contractors and agents.
How can a FinTech prepare for a successful audit? ---------CORRECT
ANSWER-----------------Plan in advance, ensure staff availability, ensure
documentation is correct and up to date, address potential issues on an
ongoing basis throughout the year, and fully understand the audit scope.
What are two sources of internal risk in a FinTech? ---------CORRECT
ANSWER-----------------The organization's employees and internal
processes
Aside from the legal requirement, why is good recordkeeping important to
FinTechs? ---------CORRECT ANSWER-----------------It could help to defend
your organization against a money laundering or a terrorist financing
offense. It also supports law enforcement agencies to fight financial crime.
With whom can financial institutions share customer data? ---------
CORRECT ANSWER-----------------Data you hold about a customer should
be shared only with others who need to know. Many jurisdictions have
privacy and data security laws and regulations that apply to financial
institutions.
What is the advantage of independently collecting customer information in
addition to customer-completed digital forms? ---------CORRECT ANSWER-
,----------------It can be more reliable and less prone to fraud and
manipulation.
Name some common red flags when onboarding customers. ---------
CORRECT ANSWER-----------------Customers who are overly evasive,
provide documents that appear to be false, are linked to high-risk or
sanctioned jurisdictions, are PEPs or affiliated with PEPs, and are subjects
of adverse media.
When does name screening typically take place? ---------CORRECT
ANSWER-----------------Customers typically are screened at onboarding and
on an ongoing basis. Some organizations continuously rescreen customers
in real-time, and others do hourly or daily batch screening.
With regard to list management controls, how does a FinTech determine
which lists to use? ---------CORRECT ANSWER-----------------The decision is
based on geographic location, the currencies used, the business model,
where customers are based, and customer activities.
How does a Fintech determine the necessary level of verification and
research during customer onboarding? ---------CORRECT ANSWER----------
-------The level is based on the risk score given to a customer through the
customer risk assessment process and any local regulatory requirements.
Why is it crucial for CDD programs to evolve along with organizational
growth? ---------CORRECT ANSWER-----------------To accommodate new
customer types, volumes, and risks, and to prevent delays in the
onboarding process.
, What is the purpose of controls for transaction monitoring? ---------
CORRECT ANSWER-----------------The purpose of having controls for
transaction monitoring is to manage the financial crime risk to an
organization, in a risk-based approach, these controls are appropriate,
specific, and risk-based.
What factors do transaction monitoring scenarios analyze? ---------
CORRECT ANSWER-----------------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 ANSWER-----------------To
consider the nature of the rule that flagged the transaction, as well as the
wider customer profile and transaction history.
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
