RBS Banking Regulations and Compliance 2

Question 1

What is 'Enhanced Due Diligence' (EDD) and when is it typically applied?

Accepted Answer

Additional scrutiny applied to higher-risk customers such as Politically Exposed Persons (PEPs)

Answer

A standard onboarding process applied to all new customers

Answer

A post-transaction review conducted monthly for corporate accounts

Answer

An annual audit of all customer accounts regardless of risk level

Question 2

Who is classified as a Politically Exposed Person (PEP) in banking compliance?

Accepted Answer

Individuals who hold or have held prominent public functions, such as heads of state or senior government officials

Answer

Any customer who has donated to a political party

Answer

Bank employees who lobby for regulatory changes

Answer

Customers who work in government-regulated industries

Question 3

What is the main purpose of the UK's Money Laundering Regulations 2017?

Accepted Answer

To implement the EU's Fourth Anti-Money Laundering Directive and set out obligations for firms to prevent financial crime

Answer

To allow banks to freeze accounts of suspected criminals without court approval

Answer

To establish maximum penalty limits for money laundering offenses

Answer

To create a national database of all financial transactions over £5,000

Question 4

In banking, what does 'ring-fencing' refer to following the Financial Services (Banking Reform) Act 2013?

Accepted Answer

Separating retail banking services from riskier investment banking activities

Answer

Protecting customer data from external cyber threats

Answer

Limiting the number of accounts a customer can hold

Answer

Restricting foreign banks from operating in the UK

Question 5

What is the role of the Financial Conduct Authority (FCA) in relation to RBS?

Accepted Answer

It regulates RBS's conduct toward customers and markets, ensuring fair treatment and market integrity

Answer

It sets the Bank of England base interest rate that affects RBS mortgage products

Answer

It manages RBS's government ownership stake and shareholder relations

Answer

It approves all new financial products RBS wishes to launch

Question 6

What is GDPR's primary relevance to banks like RBS?

Accepted Answer

It governs how banks must collect, store, process, and protect personal customer data

Answer

It sets minimum interest rates for savings accounts across Europe

Answer

It requires banks to share customer financial data with government tax authorities

Answer

It mandates that banks offer digital banking services to all customers

Question 7

What does 'layering' refer to in the context of money laundering?

Accepted Answer

The second stage of money laundering where criminals obscure the audit trail through complex transactions

Answer

A tiered interest rate system offered to high-value customers

Answer

The process of diversifying investments across multiple asset classes

Answer

Structuring loan products with multiple repayment schedules