CAMS Question #282: Real Exam Question with Answer & Explanation

The correct answer is B. Customer identification, risk assessment, customer screening, monitoring. According to the Basel Committee on Banking Supervision (BCBS), a sound KYC program should contain four essential elements: (i) customer acceptance policy; (ii) customer identification; (iii) on- going monitoring of higher risk accounts; and (iv) risk management. These elements c

Question

What are four key elements that a KYC program should contain according to the Basel Committee requirements?

Options

ACustomer onboarding, sanction monitoring, customer acceptance, customer due diligence
BCustomer identification, risk assessment, customer screening, monitoring
CCustomer onboarding, risk monitoring, customer acceptance, enhanced due diligence
DCustomer identification, risk management, customer acceptance, monitoring

Explanation

According to the Basel Committee on Banking Supervision (BCBS), a sound KYC program should contain four essential elements: (i) customer acceptance policy; (ii) customer identification; (iii) on- going monitoring of higher risk accounts; and (iv) risk management. These elements correspond to the options B in the question, as customer identification involves verifying the identity and beneficial ownership of the customers, risk assessment involves determining the level of risk posed by the customers and their activities, customer screening involves checking the customers against relevant sanctions and watch lists, and monitoring involves reviewing the customers' transactions and behavior for any anomalies or red flags.

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