Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What is a key function of electronic banking?

1. To reduce the use of physical cash during transactions

2. To support only international money transfers

3. To require manual approvals for every transaction

4. To engage solely with cryptocurrency markets

The correct answer is: To reduce the use of physical cash during transactions

The key function of electronic banking is to reduce the use of physical cash during transactions. By facilitating online transactions, transfers, and payments, electronic banking makes it possible for consumers and businesses to engage in financial activities without the need for physical currency. This not only streamlines the payment process but also enhances efficiency, as individuals can make payments from anywhere at any time using electronic devices. Additionally, this shift towards electronic transactions helps to improve security and tracking capabilities, reducing the risks associated with cash handling. In contrast, the other options do not accurately represent the fundamental role of electronic banking. Supporting only international money transfers restricts the broader capabilities of electronic banking, which encompasses various domestic and international transactions. Requiring manual approvals for every transaction contradicts the efficiency and speed that electronic banking aims to provide; most systems are designed for quick and automated processing. Finally, engaging solely with cryptocurrency markets limits the scope of electronic banking, which encompasses traditional banking services as well as various digital payment methods.