Which of the following enables financial institutions to detect and assess whether customers’ transactions pose suspicion when considered against their respective backgrounds and profiles?

An effective transaction monitoring system comprises of different elements. Which of the following is likely to be an element of an effective transaction monitoring system?

I. A well-calibrated framework.
II. Meaningful integration.
III. Robust risk awareness.
IV. Passive reaction

Which of the following is characterized by the personalized delivery of a wide variety of financial services and products to wealthy individuals?

I. Public banking
II. Private banking
III. Government banking
IV. Wealthy banking

Taking into consideration the close relationships, sophistication, and complexity in managing the wealth of individuals, which of these statements is true for financial institutions engaging in private banking businesses?

Which of the following is characteristic of financial institutions involved in private banking, with more robust and effective controls?

I. Financial institutions with a strong culture of control-consciousness permeating across all functions within the institution.
II. Financial institutions with a strong culture of control-consciousness permeating across all levels within the institution.
III. Financial institutions with a board and senior management setting the tone at the top.
IV. Financial institutions with a weak culture of team collaboration and communication.

Private banking is banking, investment and other financial services provided by banks and financial services firms primarily to high-net-worth individuals. Which of these is one of the things that sound private banking business is centered upon?

I. Subjecting higher-risk accounts to zero proactive monitoring.
II. Having an effective customer due diligence.
III. Having an effective customer onboarding policy.
IV. Subjecting higher-risk accounts to more extensive due diligence.

Which of the following group of individuals is it their duty to set the right tone at the top and foster a strong and enduring control culture and risk awareness throughout their financial institutions?

I. It is the responsibility of the Board.
II. It is the responsibility of senior management.
III. It is the responsibility of the covered persons.
IV. It is the responsibility of the customer care department.

Certain factors are considered by financial institutions in determining the ML/TF risk classification of customers. Which of the following is one of the factors used in determining the ML/TF risk classification of customers?

I. Involvement in high-risk countries/business industries.
II. Political connections of the customer and related individuals.
III. Unknown adverse information on the customer.
IV. Complexity of structures used.

Under which of the following conditions are financial institutions expected not to proceed with establishing business relations with the customer?

I. When the legitimacy of the customer’s source of wealth can be ascertained.
II. When the legitimacy of the customer’s or beneficial owner’s source of wealth cannot be reasonably ascertained.
III. When the legitimacy of the beneficial owner’s source of wealth can be ascertained.
IV. When the customer’s or beneficial owner’s source of wealth is discovered.

For which of the following reasons is it critical for all outgoing payment instructions to contain complete originator information?

I. To prevent the passing of funds through different financial institutions.
II. To stop the tracing of funds from one financial institution to another.
III. To hinder the tracing of funds passing through different financial institutions.
IV. To enable the tracing of funds passing through different financial institutions.

In private banking, the close and trusted nature of the relationship between which of the following individuals exposes the financial institution to a higher risk of fraud?

I. The relationship between the teller and the accountant.
II. The relationship between the relationship manager and the accountant.
III. The relationship between the customer and the relationship manager.
IV. The relationship between the customer and the next of kin.

Which of the following is most likely the most common means through which internal fraud involving account transfers from inactive/dormant accounts to third party accounts at another financial institution is perpetrated?

External fraud is another risk that financial institutions have to confront and manage. Which of the following events is an example of external fraud?

I. Employees performing unauthorized transactions.
II. Payroll fraud committed by the human resource person.
III. Fraudulent email instructions to release funds from customers’ accounts to third-party accounts.
IV. Non-reporting of transactions intentionally by the financial accountant.

Many financial institutions have instituted call-backs as an enhanced fraud risk control in place to authenticate customer instructions. Which of the following factors affects the effectiveness of call-backs in mitigating fraud risks?

I. The absence of call-backs as a fraud risk control.
II. The quality of implementation of call-backs.
III. The presence of call-backs as a fraud risk control.
IV. The financial institution’s dependence on call-backs.

Financial institutions must establish the authenticity of all customer instructions before acting on them. Which of the following should perform this authentication?

Call-back procedures are generally performed by parties independent of the front office. Which of the following is most likely used in making call-backs?

Some financial institutions adopt a risk-based approach for call-back procedures. Which of the following statements best describes the risk-based approach for call-back procedures?

Financial institutions generally do not accept email or fax instructions for high fraud risk transactions. Which of the following is most likely the reason why financial institutions do not accept email or fax instructions for high fraud risk transactions?

To enhance the timely detection of unauthorized funds withdrawals and transactions, which of the following types of information technology should financial institutions make use of to alert customers of their account activities?

I. SMS
II. Email
III. Television
IV. Radio

Given the ease with which customers’ signatures can be forged and their email addresses and fax numbers compromised or tampered with, enhanced independent verification procedures can be conducted. Which of the following is most likely an example of an enhanced verification procedure?

Hold-mail stops mail delivery to your address but does not redirect it. For which of the following reasons are accounts with hold-mail services more susceptible to being abused?

Financial institutions should not offer hold-mail services except in exceptional circumstances and upon request by customers. Requests for hold-mail services should be ascertained and approved by parties independent of which of the following persons?

For which of the following reasons should financial institutions only offer non-system generated (i.e. manually compiled) or customized statements to their customers on a selective basis?

Financial institutions typically require customers to collect their retained mail within a certain period of time. Within what period time do financial institutions require customers to collect their retained mail?

Accounts with long uncollected retained mail are escalated to management’s attention. The rigor and extent of follow-up on such accounts vary across institutions. Which of the following is likely to be a follow-up action on accounts with long uncollected retained mail?

I. Financial institutions could temporarily block the accounts.
II. Financial institutions could impose a forced despatch of the retained mail to the registered mailing address as per the institution’s official records.
III. Financial institutions could conduct independent confirmations of account balances and/or activity directly with the customers.
IV. Financial institutions could request an arrest and issue a warning to the customers.

Which of the following is likely to be an effective means of timely detection of account irregularities that have been implemented by financial institutions?

Which of the following statements concerning retained mail is true?

I. Financial institutions should ensure that retained mail is not delivered to third parties without written instructions from customers to confirm that these individuals are duly authorized to collect the retained mail on their behalf.
II. Financial institutions should not have retained mail left uncollected for an extended period of time.
III. Financial institutions can have retained mail left uncollected for an unlimited period of time.
IV. Relationship managers should not be allowed to deliver retained mail to customers without the involvement of independent parties.

Unauthorized withdrawals from inactive/dormant accounts could escape detection if proper controls are not in place. What is the reason behind unauthorized withdrawals from inactive/dormant accounts escaping detection?

Financial institutions have frameworks in place to govern the operations of inactive/dormant accounts. Which of the following is one of the frameworks governing the operations of inactive/dormant accounts?

I. Preventing active accounts from becoming inactive/dormant.
II. Stating the approval authority for an inactive/dormant account’s reactivation.
III. Defining when an account is classified as inactive/dormant.
IV. Stating conditions under which such inactive/dormant may be reactivated.

Which of the following is the mostly widely used definition for a dormant/inactive account by financial institutions?