Digital Banking and Fintech Flashcards
7 cards from real Banking Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Digital Banking and Fintech flashcards as text
Which authentication method uses behavioral biometrics such as typing rhythm and mouse movement patterns?
Answer: Continuous or passive authentication
Continuous or passive authentication monitors behavioral biometrics in real time to verify user identity without interrupting the session.
What is 'Buy Now, Pay Later' (BNPL) and how is it typically regulated in the US?
Answer: A short-term installment loan product that largely falls outside traditional consumer credit regulation
BNPL products typically split purchases into installments and have historically operated in a regulatory gray area, though CFPB has moved to extend TILA protections to them.
What is the purpose of a 'sandbox' environment in fintech development and regulatory contexts?
Answer: A controlled testing environment where fintechs can pilot products with limited regulatory requirements
Regulatory sandboxes allow fintech companies to test innovative products with real customers under relaxed regulatory oversight within defined parameters.
What distinguishes a 'prepaid debit card' from a standard debit card in terms of federal protections?
Answer: Prepaid cards under the CFPB Prepaid Rule receive protections similar to debit cards including error resolution rights
The CFPB's Prepaid Rule extended Regulation E error resolution rights and disclosure requirements to prepaid accounts, aligning protections closer to those for debit cards.
What is a 'stablecoin' in the cryptocurrency ecosystem?
Answer: A digital asset designed to maintain a stable value by pegging to a reference asset such as the US dollar
Stablecoins are cryptocurrencies pegged to stable reference assets (fiat currency, commodities, or algorithms) to minimize price volatility.
Which fraud scheme involves criminals intercepting and altering payment instructions, often via email compromise, to redirect funds?
Answer: Business Email Compromise (BEC) / payment redirection fraud
BEC fraud involves attackers compromising business email accounts to intercept payment communications and redirect wire transfers or ACH payments to criminal accounts.
What is the role of a 'core banking system' in a financial institution's technology stack?
Answer: The central software platform that processes daily banking transactions and maintains account records
Core banking systems are the central back-end platforms that process deposits, loans, payments, and maintain the ledger of all customer accounts.