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Digital Banking Flashcards

7 cards from real Banking 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 flashcards as text

  1. A customer receives a text message claiming their account is frozen and asking them to call a number to verify their information. This type of SMS-based scam is called:

    Answer: Smishing

    Smishing is a phishing attack conducted via SMS text messages, tricking recipients into revealing personal or financial information.

  2. Which of the following is a key advantage of real-time payment networks (such as RTP or FedNow) over traditional ACH transfers?

    Answer: Funds are available to the recipient within seconds, 24/7/365

    Real-time payment networks settle transactions instantly and operate around the clock, unlike ACH which typically takes 1–3 business days.

  3. What does 'tokenization' mean in the context of digital payment security?

    Answer: Replacing sensitive payment card data with a non-sensitive placeholder value

    Tokenization replaces a card's actual account number with a randomly generated token, so merchants never handle the real card data, reducing fraud risk.

  4. Under the Electronic Fund Transfer Act (EFTA), if a customer reports an unauthorized debit card transaction within 2 business days, their maximum liability is:

    Answer: $50

    EFTA limits consumer liability to $50 if an unauthorized electronic funds transfer is reported within 2 business days of discovering the loss.

  5. A bank's mobile app crashes for thousands of users during peak hours because its servers cannot handle the load. This is an example of a failure in:

    Answer: Scalability and infrastructure resilience

    Scalability refers to a system's ability to handle increased load; infrastructure resilience ensures services remain available during high-demand periods.

  6. Which of the following best describes 'open banking'?

    Answer: A framework where banks share customer financial data with third parties via APIs with customer consent

    Open banking is a system that lets consumers share their financial data securely with authorized third-party providers through standardized APIs.

  7. What is 'chargeback fraud' (also known as friendly fraud) in digital banking?

    Answer: A customer making a legitimate purchase then falsely disputing it to get a refund while keeping the goods

    Friendly fraud occurs when a customer intentionally disputes a valid transaction to reclaim money while retaining the product or service.