Cryptoasset Anti-Financial Crime Specialist (CCAS) Certification Practice Test

If regulators inquire about the effectiveness of a negative media search tool, what response would be strongest?

1. The bank provides a live walk-through of the system

2. Independent consultants completed model validation and confirmed effectiveness

3. The bank scheduled a targeted audit of KYC processes

4. The bank conducted pre- and post-implementation validation of the tool

The correct answer is: Independent consultants completed model validation and confirmed effectiveness

The strongest response to regulators inquiring about the effectiveness of a negative media search tool is that independent consultants completed model validation and confirmed its effectiveness. This demonstrates a level of objectivity and credibility that is crucial in regulatory contexts. By involving independent consultants, the bank ensures that the assessment of the tool’s performance is unbiased and based on established methodologies. Independent validation serves not only to affirm the tool’s reliability but also enhances the bank's response by showing that due diligence was exercised in ensuring compliance with regulatory standards. This external verification can be more persuasive to regulators than internal assessments, as it indicates a thorough review process that adheres to industry best practices. In contrast, the other options, while potentially valuable, do not carry the same weight. A live walk-through of the system might provide insight into its workings but doesn’t necessarily demonstrate or confirm its effectiveness. Scheduling a targeted audit of KYC processes might be relevant, but it does not directly address the functioning of the media search tool itself. Finally, conducting pre- and post-implementation validation, while useful, may lack the impartiality that independent validation offers. Thus, the involvement of independent consultants stands out as the strongest response for demonstrating the tool's efficacy to regulators.