CDD ENG
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Questions and Answers

What are the two types of approaches that can be applied in Customer Due Diligence investigations?

  • Guideline Based Approach and Risk Based Approach
  • Rule Based Approach and Risk Based Approach (correct)
  • Policy Based Approach and Regulation Based Approach
  • Principle Based Approach and Customer Based Approach

    • Which approach focuses more on specific rules, regulations, and guidelines when conducting checks on customers?

  • Rule Based Approach (correct)
  • Policy-Based Approach
  • Risk Based Approach
  • Guideline-Based Approach

    • What does the rule-based approach in Know Your Customer emphasize?

  • Monitoring customer activities
  • Compliance with regulations and laws (correct)
  • Setting customer risk levels
  • Understanding the customer and risks associated with the customer relationship

    • What does the risk-based approach entail for a financial institution?

    <p>Adjusting procedures based on the risk level associated with a specific customer</p> Signup and view all the answers

    How does the risk-based approach suggest institutions should focus their resources?

    <p>On customers who pose the greatest risk</p> Signup and view all the answers

    What is a key difference between the rule-based approach and the risk-based approach?

    <p>Use of professional judgement in arriving at decisions</p> Signup and view all the answers

    In the rule-based approach, what is emphasized when conducting checks on customers?

    <p><strong>Compliance with regulations</strong></p> Signup and view all the answers

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