Free CTMA sample questions

Correct answer: The enterprise-wide risk assessment (EWRA)

The enterprise-wide risk assessment (EWRA) identifies the specific financial crime risks inherent to the institution's customers, products, and geographies. A risk-based TM program must map its scenarios and rules directly to the high-risk areas identified in the EWRA to demonstrate coverage aligned with risk appetite.

Correct answers: It compares current activity against a customer's historical profile; It is better suited for detecting unknown or evolving typologies

Behavior-based monitoring establishes a baseline of 'normal' activity for a customer (or peer group) and generates alerts when deviations from this baseline occur (e.g., a sudden spike in wire volume).

Because it looks for anomalies rather than specific known patterns, behavior-based monitoring is effective at catching new or evolving financial crime typologies that static rules might miss.

Correct answer: False

False. High false positive rates are common in TM systems and do not necessarily mean the system is broken. They often indicate a need for tuning thresholds or segmenting customers more effectively. Replacing the system is a last resort; optimization/tuning is the standard response.

Correct answer: Conduct enhanced due diligence on the counterparty to confirm or rule out a sanctions match

Before taking drastic action like closing the account or filing a SAR, the investigator must determine if the partial match is a true positive. This involves gathering additional information (EDD) on the counterparty's address, ownership, and business activities to verify if it is indeed the sanctioned entity.

Correct answer: An alert generated by a system error that flags internal bank transfers as customer transactions

Non-productive alerts are those that provide no value to the investigation process, often caused by data errors, system glitches, or poor configuration (like flagging internal transfers). A 'false positive' usually refers to activity that correctly met the rule criteria but turned out to be benign after investigation.

Correct answer: A specific explanation of why the activity was deemed reasonable and not suspicious

Auditors and regulators need to understand the investigator's thought process. Simply stating 'activity is normal' is insufficient. The rationale must explain *why* the activity is normal for that specific customer (e.g., 'Cash deposits align with the customer's stated business as a restaurant').