Swift Regulatory Frameworks & Compliance 5

Question 1

What was the primary compliance lesson from the 2016 Bangladesh Bank SWIFT heist?

Accepted Answer

Weak internal controls at member institutions, not the SWIFT network itself, enabled fraudulent messages to be sent

Answer

Attackers compromised Bangladesh Bank's local SWIFT environment and submitted fraudulent MT 103 messages, exposing gaps in endpoint security and internal controls.

Question 2

How does PSD2 (EU Payment Services Directive 2) affect SWIFT-connected banks operating in Europe?

Accepted Answer

PSD2 introduces open banking obligations and strong customer authentication requirements that overlay existing SWIFT compliance frameworks

Answer

PSD2 mandates strong customer authentication and open APIs, which must be reconciled with existing SWIFT-based payment processes and compliance controls.

Question 3

What is 'nested correspondent banking' and why is it a compliance concern?

Accepted Answer

When a respondent bank allows its own downstream clients to access the correspondent's services indirectly, obscuring transaction originators

Answer

Nested correspondent banking creates layers that make it difficult for the upstream correspondent to identify who is actually initiating transactions.

Question 4

Which provision of the USA PATRIOT Act specifically addresses due diligence requirements for US banks maintaining correspondent accounts for foreign institutions?

Accepted Answer

Section 312

Answer

Section 312 of the USA PATRIOT Act requires US banks to establish due diligence programs for foreign correspondent accounts, with enhanced due diligence for high-risk jurisdictions.

Question 5

What is the function of a SWIFT Relationship Management Application (RMA) from a security and compliance perspective?

Accepted Answer

It controls which counterparties a SWIFT user authorizes to send them messages, preventing unauthorized message receipt

Answer

RMA ensures a bank only receives messages from counterparties it has explicitly authorized, reducing the risk of receiving fraudulent or unsolicited SWIFT messages.

Swift Practice Test

Swift Practice Test

Swift Regulatory Frameworks & Compliance 5