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

Which of the following has been recently identified as an emerging money laundering risk?

1. Invoicing discrepancies

2. Funds transfers

3. Currency exchange fluctuations

4. Asset diversification

The correct answer is: Funds transfers

Funds transfers have gained attention as an emerging money laundering risk due to the increasing speed and cross-border nature of transactions in today's financial environment. With the rise of digital payment solutions and online banking, the potential for individuals to move money quickly and anonymously has heightened the risk of illicit activities. Criminals can exploit the rapid transfer capabilities to obscure the origin of funds, making it challenging for financial institutions to identify suspicious activities. While invoicing discrepancies may present risks, particularly in relation to trade-based money laundering, they do not carry the same urgency as the direct movement of funds. Currency exchange fluctuations can impact investment strategies but are not inherently linked to money laundering activities. Similarly, asset diversification is a legitimate financial strategy and does not represent a direct risk for money laundering in the same way that quick and less transparent funds transfers do. Therefore, the recognition of funds transfers as a significant threat helps institutions focus their anti-money laundering efforts effectively.