Pearson CAMS New Attempt

Key performance indicators (KPIs) are essential for evaluating the effectiveness and efficiency of transaction monitoring systems within an AML/CFT program. Regulators expect institutions to monitor how well their systems identify, prioritize, and resolve suspicious activity.

The number of alerts raised provides insight into system sensitivity and potential over- or under-alerting. Tracking alerts by region helps institutions identify geographic risk concentrations and emerging threats. The average time to review an alert measures operational efficiency and whether investigations are conducted promptly, as required by regulatory expectations.

Hiring timelines and transaction volumes by top customers are operational or business metrics and do not directly assess transaction monitoring effectiveness.

Cryptoassets, such as cryptocurrencies, pose specific ML/TF risks due to their technological characteristics and usage patterns:

Potential for anonymity (C): Cryptoassets allow users to make transactions without revealing their true identities, which hinders law enforcement from tracking illicit activity. The CAMS 6th Edition states:“Cryptoassets can be transferred or exchanged between users without the need for identification, presenting a significant risk due to the potential for anonymity.”(CAMS 6th Edition, Chapter: Risks and Methods of Money Laundering and Terrorist Financing, Virtual Assets section)

Global reach (D): Cryptoassets operate on a global scale, enabling rapid cross-border transfers without the limitations of traditional financial systems. This increases the complexity of monitoring and controlling illicit transactions.“The global nature of virtual assets makes it easy for criminals to move value across borders quickly, evading jurisdictional controls.”(CAMS 6th Edition; FATF Guidance on Virtual Assets 2019)

Use to layer illicit funds (F): The ability to move cryptoassets between numerous wallets and exchanges allows criminals to obscure the source of funds through layering, a key stage of money laundering.“Layering can be achieved by rapidly moving cryptoassets between wallets, exchanges, and across different jurisdictions, making tracing more difficult.”(CAMS 6th Edition, Chapter: Risks and Methods of Money Laundering and Terrorist Financing)