Senior AML KYC Analyst Interview Questions and Answers

Pooled accounts refer to accounts where funds from multiple individuals or entities are combined into a single account.

• Pooled accounts are commonly used by investment funds, such as mutual funds or hedge funds, to pool together the investments of multiple investors.

• These accounts allow for diversification of investments and can be managed by a fund manager.

• The funds in a pooled account are typically invested in various assets, such as stocks, bonds, or other securities.

• Profit...read more

The parameters for enhanced due diligence are customer location, financial status, nature of business, and purpose of transaction.

• Enhanced due diligence is a more thorough investigation of a customer's risk profile.

• Customer location can indicate higher risk jurisdictions.

• Financial status can reveal potential for money laundering or terrorist financing.

• Nature of business can indicate higher risk industries.

• Purpose of transaction can reveal potential for illicit activity.

• Exampl...read more

Enhanced due diligence parameters include high-risk customers, politically exposed persons, complex ownership structures, and unusual transactions.

• Identifying high-risk customers based on their industry, location, or transaction history

• Conducting enhanced due diligence on politically exposed persons (PEPs) and their close associates

• Investigating complex ownership structures to identify ultimate beneficial owners (UBOs)

• Monitoring for unusual transactions that may indicate mone...read more

KYC Policy refers to the set of guidelines and procedures that a financial institution follows to verify the identity of its clients.

• KYC Policy is a crucial part of AML compliance.

• It outlines the procedures for verifying the identity of clients and assessing their risk.

• It includes guidelines for customer due diligence, ongoing monitoring, and record-keeping.

• Examples of KYC Policy include verifying the identity of clients through government-issued IDs, conducting background ch...read more

Customer Acceptance Policy outlines the criteria for onboarding new customers and ongoing monitoring.

• The policy should include risk assessment procedures

• It should define the types of customers the institution will not do business with

• It should outline the documentation required for customer identification and verification

• It should specify the frequency and scope of ongoing monitoring

• It should be regularly reviewed and updated

• Example: A bank may refuse to do business with cust...read more

I have experience in programming applications to pull transactions triggered by thresholds.

• Utilize programming languages such as Python, SQL, or R to create scripts that monitor transactions

• Set up automated alerts to notify relevant parties when threshold transactions occur

• Implement filters and rules to accurately identify threshold-triggered transactions

• Regularly test and update the application to ensure accuracy and efficiency

Accruals are adjustments made to financial statements to reflect the recognition of revenues and expenses in the period they are earned or incurred, regardless of when cash is exchanged.

• Accruals are used to match revenues and expenses to the time period in which they are incurred, rather than when cash is exchanged.

• Accruals are necessary for accurate financial reporting and to provide a more realistic view of a company's financial position.

• Examples of accruals include accrued...read more

A sinking fund is a fund set up by a corporation to retire a bond issue before maturity.

• Sinking funds are used to ensure that a corporation has enough funds to repay its debt obligations.

• Money is periodically deposited into the sinking fund to accumulate until the bond's maturity date.

• The corporation then uses the funds in the sinking fund to buy back a portion of the outstanding bonds.

• Sinking funds can help reduce the risk for bondholders by providing assurance that the issu...read more