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

An Alternative Remittance System (ARS) typically involves cross-border value transfer without utilizing the traditional banking system. This definition captures the essence of ARS as it refers to informal money transfer mechanisms that operate outside the formal financial sector, often providing services where regular banking resources are limited or unavailable.

These systems can facilitate the movement of funds between individuals in different countries by leveraging networks, often relying on personal relationships or community ties, instead of traditional banking methods. Common examples of ARS include hawala and informal value transfer systems (IVTS), which can offer lower fees and faster services compared to formal banking channels.

In contrast, the other options relate to different financial activities. Peer-to-peer lending platforms involve matching borrowers with individual lenders but do not necessarily represent means for cross-border value transfer. International trade financing refers to specific financial products and services that support businesses engaged in international trade, which is more structured and involves commercial transactions. Traditional banking services operate within the formal financial system, offering remittance options that follow regulatory practices, which is distinct from the informal structures characteristic of ARS.