CAMS Dumps with Practice Exam Questions Answers

Adverse media screening is an important component of customer due diligence, but reliance on general search engines presents several limitations recognized by AML practitioners and regulators.

Search engines typically provide unstructured data, which makes it difficult to systematically analyze and document results for compliance purposes. Information may be incomplete, duplicated, or lack context.

The process is also time-consuming and highly manual, particularly for institutions screening large customer populations. Manual reviews increase operational burden and introduce inconsistency and human error.

Additionally, search engine algorithms vary, meaning results can differ depending on timing, location, and personalization, leading to inconsistent outcomes that are difficult to audit or reproduce.

While language coverage and relevance may be challenges, the most critical limitations relate to lack of structure, inefficiency, and inconsistent results.

Conducting a periodic enterprise-wide risk assessment (EWRA) is the most effective approach to identifying, assessing, and mitigating financial crime risks. It ensures all inherent risks across areas like AML, CFT, sanctions, fraud, ABC, and tax evasion are evaluated, existing controls are assessed, and residual risks are identified. This comprehensive view enables a cohesive and proactive risk management strategy aligned with regulatory expectations.

The relationship manager is in the best position to identify and report money laundering risks due to their direct and ongoing interaction with clients. They have detailed knowledge of clients’ profiles, financial behaviors, and any unusual activities that may raise red flags.

Correspondent banking relationships are recognized as higher risk under FATF guidance primarily because transactions are cross-border and conducted on behalf of third-party customers.

In correspondent banking, a respondent bank may process transactions for customers that the correspondent bank does not have a direct relationship with. This reduces transparency and limits the correspondent’s ability to fully assess customer identity, beneficial ownership, and transaction purpose.

While correspondent transactions may involve high-risk jurisdictions, this is not always the case. They are not anonymous by design, and payment messaging standards often require significant information. However, the indirect customer relationship and cross-border nature introduce complexity, jurisdictional risk, and reliance on the respondent bank’s controls.

Therefore, third-party and cross-border exposure is the key driver of heightened risk.