Digital Banking and Technology Flashcards
7 cards from real CBP 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 Technology flashcards as text
What is 'explainable AI' (XAI) and why is it particularly important for credit decisioning in US banking?
Answer: AI models whose decision logic can be understood and explained, required by regulations like ECOA to justify adverse credit actions
ECOA and Regulation B require banks to provide specific reasons for adverse credit actions, making explainable AI essential so lenders can articulate why an algorithmic model denied credit.
Which payment rail in the US is designed specifically for instant, 24/7/365 credit transfers between bank accounts?
Answer: FedNow Service
The FedNow Service, launched by the Federal Reserve in 2023, enables instant interbank credit transfers available around the clock every day of the year.
In digital banking, what is 'consent management' as it relates to customer data?
Answer: A framework allowing customers to control which third parties can access their financial data and for what purpose
Consent management in digital banking gives customers granular control over their data—who can access it, what data can be shared, and for how long—in compliance with data privacy regulations.
A bank's mobile app uses 'push provisioning' for digital wallets. What does this process involve?
Answer: Securely delivering payment credentials directly from the bank to a digital wallet without the customer entering card details manually
Push provisioning allows banks to securely deliver tokenized payment credentials directly into a customer's digital wallet app (like Apple Pay or Google Pay) through an authenticated, encrypted process.
What is the purpose of a 'model risk management' (MRM) framework in a digital bank?
Answer: Identifying, assessing, and mitigating risks arising from the use of quantitative models in credit, fraud, and trading decisions
MRM frameworks, guided by OCC/Fed guidance (SR 11-7), govern the development, validation, and ongoing monitoring of quantitative models to prevent incorrect decisions caused by model errors.
Which type of cyberattack targets bank customers by creating fake websites or emails that mimic legitimate bank communications to steal credentials?
Answer: Phishing
Phishing attacks use fraudulent emails, texts, or websites that impersonate trusted institutions to trick customers into revealing login credentials or sensitive information.
In the context of digital banking innovation, what is a 'regulatory sandbox'?
Answer: A formal program where regulators allow fintech firms to test innovative products with real customers under relaxed rules within defined parameters
Regulatory sandboxes, offered by agencies like the OCC and CFPB, let innovators test new financial products with real customers under regulatory supervision without immediately facing the full burden of compliance.