FIA Financial Technology & Systems 3

Question 1

Which financial technology standard provides a common language for reporting financial data to regulators using XML-based tagging?

Accepted Answer

XBRL

Answer

XBRL (eXtensible Business Reporting Language) is an XML-based standard used by regulators like the SEC to receive standardized financial reports.

Question 2

In payment processing, what does the term 'interchange fee' refer to?

Accepted Answer

The fee an issuing bank charges the acquiring bank per card transaction

Answer

Interchange fees are paid by the merchant's bank (acquirer) to the cardholder's bank (issuer) and are set by card networks like Visa and Mastercard.

Question 3

What is the role of a 'payment gateway' in e-commerce transactions?

Accepted Answer

It authorizes and captures payment data between merchant and processor

Answer

A payment gateway encrypts and transmits card data from a merchant to the payment processor and returns an approval or decline response.

Question 4

Which regulatory framework requires financial institutions to give third-party providers access to customer account data via APIs?

Accepted Answer

PSD2 (Payment Services Directive 2)

Answer

PSD2, the EU's revised Payment Services Directive, mandates open banking APIs allowing licensed third parties to access customer accounts with consent.

Question 5

In blockchain technology applied to finance, what is a 'smart contract'?

Accepted Answer

Self-executing code that automatically enforces contract terms on a blockchain

Answer

Smart contracts are programs stored on a blockchain that automatically execute predefined actions when specified conditions are met.

(FIA) Financial Information Associate Certification Practice Test

(FIA) Financial Information Associate Certification Practice Test

FIA Financial Technology & Systems 3