CAFCA EXAM 2025 UPDATES QUESTIONS AND CORRECT
VERIFIED ANSWERS ALREAD GRADED A+ (BRAND NEW
VISION)
Why are Fin Techs often considered to be high-risk companies? - answersBecause 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? - answersNon 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? - answersFaster speed to market
and overcoming regulatory complexities.
What are card schemes? - answersMembership-based networks that enable a payment
method, such as Visa, JCB and MasterCard.
What are the three lines of defense in AML compliance? - answersThe first line of defense is
the line of business. The second line of defense is the compliance and internal control
functions. The third line of defense is internal audit.
What is meant by a "four-eyes check" during onboarding? - answersTo ensure proper checks
are performed, a second person might review the file. This is also known as employing "dual
controls."
, What are dual controls? - answersIn the prevention of financial crime, dual controls can be
applied during CDD (customer due diligence) to ensure it is performed correctly.
Why is it important for the second line of defense to be independent from the business line? -
answersTo 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). -
answersEnsuring 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? - answersThe 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? - answersRisk 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? -
answersCustomer 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? - answersAn
organization's employees and third parties, such as contractors and agents.
VERIFIED ANSWERS ALREAD GRADED A+ (BRAND NEW
VISION)
Why are Fin Techs often considered to be high-risk companies? - answersBecause 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? - answersNon 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? - answersFaster speed to market
and overcoming regulatory complexities.
What are card schemes? - answersMembership-based networks that enable a payment
method, such as Visa, JCB and MasterCard.
What are the three lines of defense in AML compliance? - answersThe first line of defense is
the line of business. The second line of defense is the compliance and internal control
functions. The third line of defense is internal audit.
What is meant by a "four-eyes check" during onboarding? - answersTo ensure proper checks
are performed, a second person might review the file. This is also known as employing "dual
controls."
, What are dual controls? - answersIn the prevention of financial crime, dual controls can be
applied during CDD (customer due diligence) to ensure it is performed correctly.
Why is it important for the second line of defense to be independent from the business line? -
answersTo 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). -
answersEnsuring 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? - answersThe 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? - answersRisk 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? -
answersCustomer 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? - answersAn
organization's employees and third parties, such as contractors and agents.
