Banking Digital Banking 5 — Questions and Answers
Question 1: A bank's chatbot uses artificial intelligence to answer customer questions about balances and transactions. This technology is best described as:
- Robotic process automation (RPA)
- Conversational AI / virtual assistant (Correct answer)
- Blockchain smart contract
- Core banking system upgrade
Correct answer: Conversational AI / virtual assistant
Conversational AI virtual assistants use natural language processing to understand and respond to customer inquiries in real time through text or voice interfaces.
Question 2: Which of the following is a common method banks use to verify a new customer's identity during digital onboarding?
- Requiring in-person notarization
- Document scanning with AI-powered liveness detection (Correct answer)
- Sending a physical letter to the customer's address first
- Calling the customer's employer for verification
Correct answer: Document scanning with AI-powered liveness detection
Modern digital KYC onboarding uses AI to scan government-issued IDs and liveness detection to confirm the person is physically present, not using a photo.
Question 3: What is 'BaaS' (Banking as a Service) in the fintech ecosystem?
- A government program offering subsidized savings accounts
- A model where licensed banks provide their banking infrastructure to non-bank companies via APIs (Correct answer)
- A cloud storage service for bank audit records
- A type of FDIC insurance for fintech startups
Correct answer: A model where licensed banks provide their banking infrastructure to non-bank companies via APIs
Banking as a Service (BaaS) allows fintech companies and other businesses to offer financial products by connecting to a licensed bank's infrastructure through APIs.
Question 4: A customer receives an alert that their debit card was used at a gas station skimmer. The criminal copied card data using a device physically attached to the card reader. This attack is called:
- Phishing
- Card skimming (Correct answer)
- Account takeover
- SIM swapping
Correct answer: Card skimming
Card skimming involves attaching a device to ATMs or point-of-sale terminals that reads and copies magnetic stripe data from cards inserted by unsuspecting victims.
Question 5: Which U.S. agency has authority to supervise and enforce consumer financial protection laws against banks and large fintech companies?
- The Securities and Exchange Commission (SEC)
- The Consumer Financial Protection Bureau (CFPB) (Correct answer)
- The Federal Trade Commission (FTC)
- The Office of the Comptroller of the Currency (OCC)
Correct answer: The Consumer Financial Protection Bureau (CFPB)
The CFPB was created by the Dodd-Frank Act to supervise financial companies and enforce consumer protection laws in areas such as mortgages, credit cards, and digital payments.
Question 6: What does 'SIM swapping' allow a cybercriminal to do in a digital banking attack?
- Clone a customer's banking app on another device
- Convince a carrier to transfer the victim's phone number to the attacker's SIM, intercepting SMS authentication codes (Correct answer)
- Install malware on a bank's server via a compromised SIM card
- Duplicate a contactless payment chip
Correct answer: Convince a carrier to transfer the victim's phone number to the attacker's SIM, intercepting SMS authentication codes
SIM swapping hijacks a victim's phone number by tricking the mobile carrier, allowing attackers to receive SMS-based 2FA codes and gain access to bank accounts.
Question 7: A bank offers a feature that automatically rounds up each debit purchase to the nearest dollar and transfers the difference to a savings account. This is an example of:
- Overdraft protection
- Micro-savings or round-up automation (Correct answer)
- Sweep account functionality
- Certificate of deposit laddering
Correct answer: Micro-savings or round-up automation
Micro-savings tools like round-up automation help customers save small amounts passively by automatically transferring spare change from everyday purchases.
Banking Digital Banking 5
A bank's chatbot uses artificial intelligence to answer customer questions about balances and transactions.
This technology is best described as: