CAMS Transaction Monitoring 2

Question 1

Which metric is most commonly used to measure the effectiveness of a transaction monitoring system?

Accepted Answer

False positive rate

Answer

The false positive rate measures how often legitimate transactions are incorrectly flagged, directly indicating system efficiency and analyst workload.

Question 2

A transaction monitoring system generates an alert for a wire transfer that matches a known money laundering typology. What is the analyst's FIRST step?

Accepted Answer

Gather all available information about the customer and transaction

Answer

Before making any filing or action decision, analysts must collect and review all relevant customer and transaction data to properly assess the alert.

Question 3

Which of the following best describes 'alert batching' in transaction monitoring?

Accepted Answer

Grouping related alerts for a single customer to review together

Answer

Alert batching consolidates multiple related alerts on one customer so analysts can see the full pattern rather than isolated incidents.

Question 4

What is the primary purpose of segmenting customers into peer groups within a transaction monitoring system?

Accepted Answer

To compare a customer's behavior against similar customers and detect anomalies

Answer

Peer group segmentation allows the system to flag unusual behavior relative to comparable customers, reducing false positives from legitimate industry-specific activity.

Question 5

A bank's transaction monitoring system is not tuned for its specific customer base and produces 95% false positives. This situation is BEST described as:

Accepted Answer

A model risk management failure

Answer

Excessively high false positive rates indicate the monitoring model is poorly calibrated, which is a model risk management issue requiring tuning and validation.

CAMS - Certified Anti-Money Laundering Specialist Certification Practice Test

CAMS - Certified Anti-Money Laundering Specialist Certification Practice Test

CAMS Transaction Monitoring 2