Swift Professional Standards & Competencies 3 — Questions and Answers
Question 1: Under Swift's Know Your Customer (KYC) Registry, what is the primary purpose of the KYC Registry service?
- To provide real-time transaction monitoring for all Swift members
- To centralize and standardize correspondent banking due diligence documentation (Correct answer)
- To replace national AML regulations for Swift member banks
- To automate sanction screening across the Swift network
Correct answer: To centralize and standardize correspondent banking due diligence documentation
Swift's KYC Registry allows financial institutions to upload and share standardized due diligence documentation, reducing duplicated effort in correspondent banking relationships.
Question 2: When a Swift message is flagged during sanction screening, what is the standard professional response?
- Process the transaction but add an internal note
- Immediately escalate to compliance and halt the transaction pending review (Correct answer)
- Forward to the next bank in the chain without intervention
- Cancel all transactions from that sender for 30 days
Correct answer: Immediately escalate to compliance and halt the transaction pending review
Flagged transactions must be halted and escalated to compliance officers immediately, as processing sanctioned transactions carries severe legal and reputational consequences.
Question 3: Which field in an MT 103 message is mandatory and carries the sender's reference number?
- Field 20 (Correct answer)
- Field 32A
- Field 50K
- Field 59
Correct answer: Field 20
Field 20 (Transaction Reference Number) is mandatory in MT 103 and contains the sender's unique reference for the transaction.
Question 4: A Swift professional is asked by management to approve a transaction that bypasses normal AML screening 'just this once.' What is the correct response?
- Approve it since management has authority to override controls
- Approve it only if the transaction is under $10,000
- Refuse and document the request, escalating to compliance (Correct answer)
- Process the transaction but file a Suspicious Activity Report afterward
Correct answer: Refuse and document the request, escalating to compliance
Professional standards require refusal and documentation when asked to circumvent compliance controls, regardless of who makes the request.
Question 5: What is the role of a Relationship Management Application (RMA) in the Swift network?
- It encrypts all messages between correspondent banks
- It controls which counterparties a Swift user can exchange messages with (Correct answer)
- It monitors transaction volumes for suspicious patterns
- It generates BIC codes for new Swift members
Correct answer: It controls which counterparties a Swift user can exchange messages with
RMA (Relationship Management Application) is a bilateral authorization mechanism that controls message exchange permissions between Swift users.
Question 6: Which Swift message type is used by a bank to request a copy of a previously sent message from another bank?
- MT 195 (Correct answer)
- MT 292
- MT 900
- MT 999
Correct answer: MT 195
MT 195 is a Queries message used to request clarification or a copy of a previously sent message in the customer payments category.
Question 7: What does 'Straight-Through Processing' (STP) rate measure in a Swift operational context?
- The percentage of transactions cleared without manual intervention (Correct answer)
- The speed at which Swift messages are encrypted and decrypted
- The ratio of MT 103 to MT 202 messages processed daily
- The number of sanction hits detected per thousand transactions
Correct answer: The percentage of transactions cleared without manual intervention
STP rate measures the proportion of transactions that are processed automatically from initiation to settlement without requiring human intervention.
Swift Professional Standards & Competencies 3
Under Swift's Know Your Customer (KYC) Registry, what is the primary purpose of the KYC Registry service?