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// EXAM HALL21 QUESTIONS · 30 MINUTES

Bank Compliance Officer Practice Test

Independent without being obstructive: what a new rule means in practice, who owns it, and how you know it is being followed.

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

A bank compliance officer practice test asks whether you can be independent without being obstructive, and whether your advice comes with a workable alternative. This paper has three parts: who owns a risk and how you test a policy; a new rule set on an exhibit, with a booked campaign and a sample of files; and calls on conduct, escalation, speak-up reports and regulators. The rule is fictional and written for no one country's law. Every question is original, and none comes from any bank's test. Sit it against a thirty-minute clock, or take it as practice.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// HOW TO SIT IT

Answer below as practice, and each read opens as you go. Or sit it as a test: 30 minutes, with every read held back until you finish.

PART A

The lines

Who owns what, and how you know a rule is being followed.

PART A · QUESTION 1

After a mis-selling complaint, a business head says: 'Compliance signed this product off, so this is compliance's problem.'

What is the right reading?

PART A · QUESTION 2

Every branch manager has attested that a new policy is in place. Your head of compliance asks how you know it is being followed.

What do you do?

PART A · QUESTION 3

A new head of financial crime says the team cannot look at everything, and asks each analyst to say what 'risk-based' means.

What is the best answer?

PART A · QUESTION 4

A colleague in corporate finance asks to see the management accounts of one of your lending clients, 'to get a feel for the sector'.

Signal or noise?

PART A · QUESTION 5

A borrower tells you: 'Your colleague said my rate would be fixed. Now my bill has gone up.'

What are you hearing?

PART B

The new rule

One rule, eight weeks, eight questions. Read where the bank stands before you read what the head of cards says.

EXHIBIT AL · THE NEW RULE

A new rule on consumer credit cards takes effect in 8 weeks. The regulator's notice says that before any limit increase a bank must assess whether the customer can afford it, and must keep records of limit increases, past and future, for seven years. Offers of an increase may go only to customers who have agreed to receive them.

Where the bank stands
ItemToday
AffordabilityAssessed at application. On pre-approved limit increases, income is checked and affordability is not.
SystemsTechnology says the change takes 14 weeks.
LettersPre-approved offers go out in campaigns, about 1,000 a month. The next is booked for week 10.
RecordsKept for five years, then deleted automatically.
ConsentThe customer record has no field for it.
Your test of the bank's present policy, that income is confirmed before a limit increase
Files
Sampled at random from last year's 4,000 increases60
Income confirmed51
No confirmation on file9

The head of cards says the rule “does not really apply” to pre-approved customers, who have already been assessed, and an industry body's summary reads the same way.

PART B · QUESTION 6

You have just been handed Exhibit AL's file, and have a fortnight to bring the bank a plan.

What comes first?

BACK TO EXHIBIT AL ↑
PART B · QUESTION 7

You have read Exhibit AL's rule. It says 'any limit increase', with no carve-out for pre-approved customers. The head of cards and the industry body still read them as outside it.

How do you settle it?

BACK TO EXHIBIT AL ↑
PART B · QUESTION 8

From Exhibit AL.

How long a gap is there?

BACK TO EXHIBIT AL ↑
PART B · QUESTION 9

Exhibit AL's system will not be ready by the rule's date, and technology cannot go faster.

What do you press for?

BACK TO EXHIBIT AL ↑
PART B · QUESTION 10

Exhibit AL's head of cards says: 'The week 10 campaign is worth US$2m, and it goes ahead.' You are not comfortable.

What do you do?

BACK TO EXHIBIT AL ↑
PART B · QUESTION 11

From Exhibit AL's sample test.

What does it suggest about last year's increases?

BACK TO EXHIBIT AL ↑
PART B · QUESTION 12

The head of cards looks at Exhibit AL's test: '51 out of 60 is a good score. Call it a process improvement.'

What do you do?

BACK TO EXHIBIT AL ↑
PART B · QUESTION 13

Exhibit AL's rule needs records for seven years, and the bank deletes them after five. The system change is 14 weeks away.

What do you do about the deletion first?

BACK TO EXHIBIT AL ↑

PART C

The calls

Savings, letters, launches, files, a frightened teller and a regulator.

PART C · QUESTION 14

Customers on an old savings rate stay on it unless they ask to move. The bank's lawyers say that is legal, and it earns US$4m a year, mostly from older customers. A product head asks for your view.

What do you say?

PART C · QUESTION 15

A product manager asks whether a letter can say 'no fee' when a fee starts after 12 months. Your team's habit is to send such questions to the head of compliance.

What do you do?

PART C · QUESTION 16

A new savings account launches on Friday. You have read the terms and the test results, the disclosures are clear, and the complaints route has been tried. Your own form is the last item open.

What do you do?

PART C · QUESTION 17

A test of 200 files finds one exception: a clerk keyed a date wrongly, the second check caught it, and no customer was affected.

Signal or noise?

PART C · QUESTION 18

A teller tells you in confidence that their manager pressures staff to open accounts customers did not ask for. They are frightened, and ask you to keep their name out of it.

What do you do?

PART C · QUESTION 19

After Exhibit AL's test, a regulator asks how many customers had a limit increase without an income check last year. All you have is the sample's estimate, and the answer is due on Friday.

What do you do?

PART C · QUESTION 20

Training on a new rule shows 98% completion. When you sit with branch staff, they still describe the rule wrongly to customers.

What do you do?

PART C · QUESTION 21

A check you run finds that customer risk reviews were missed for six months after a system change. Nothing bad appears to have happened. Your manager says: 'Fix it quietly. No need to write this up.'

What do you do?

0 OF 21 ANSWERED · 0 WITH THE SENIOR READ · 0 STANDS UP · 0 OFF THE LINE

// THE REST OF THE ROUND

Every question here is original; none is any bank's real test. Written for: Compliance officer.