39. In a large US bank, an individual leads a team in charge of overseeing the governance and effectiveness of the bank's transaction monitoring approach. Which strategies should the team implement? (Select Two.)
Answer: A,D
Implementing Periodic Reviews of Transaction Monitoring Scenarios
The team should implement periodic reviews of transaction monitoring scenarios and their productivity to ensure that appropriate AML typologies are reflected. This strategy is essential for maintaining an effective transaction monitoring approach and enhancing the overall governance of the bank's compliance program.
A) Periodic review of transaction monitoring scenarios and their productivity to ensure that appropriate AML typologies are reflected
This option is correct as it directly addresses the need for ongoing assessment of transaction monitoring scenarios. By regularly reviewing these scenarios, the team can identify and incorporate relevant AML typologies, thus improving the effectiveness of the monitoring process and ensuring compliance with regulatory requirements.
B) Periodic review of client profiles to ensure that the most up-to-date information is on file for high-risk clients in line with the bank's internal policies and procedures
While important for risk management, this option is not directly related to the governance and effectiveness of the transaction monitoring approach. It focuses more on customer due diligence rather than the specific monitoring scenarios that need to be evaluated for compliance and effectiveness.
C) Periodic review of suspicious activity reports (SARs) filed with FinCEN to determine whether any should be withdrawn
This option is also not the best choice as it pertains to the review of SARs after they are filed rather than the proactive monitoring of transactions. The effectiveness of transaction monitoring is better served by focusing on the scenarios that trigger these reports rather than evaluating the reports themselves.
D) Periodic review of the transaction monitoring scenarios and their productivity to ensure that appropriate AML typologies are reflected
This option is correct and is essentially a reiteration of Option A. It emphasizes the importance of regularly assessing transaction monitoring scenarios and ensuring their alignment with relevant AML typologies, which is critical for effective governance and compliance within the bank.
Conclusion
The correct strategies for overseeing the governance and effectiveness of the bank's transaction monitoring approach involve periodic reviews of the transaction monitoring scenarios and their productivity. Both Options A and D emphasize the necessity of continuous evaluation to align monitoring practices with applicable AML typologies, while Options B and C, although relevant to compliance, do not directly address the core focus of transaction monitoring effectiveness. Consequently, A and D are the most appropriate choices.