Finastra Assessment Test Finastra Assessment Open Finance and APIs 4 — Questions and Answers
Question 1: What does 'mTLS' (mutual TLS) add compared to standard TLS in Open Banking API security?
- It compresses API payloads to reduce latency
- Both the client and server authenticate each other with certificates, not just the server authenticating itself (Correct answer)
- It replaces OAuth 2.0 with a simpler key-based scheme
- It enables faster certificate renewal via ACME protocol
Correct answer: Both the client and server authenticate each other with certificates, not just the server authenticating itself
Mutual TLS requires both parties to present valid certificates, ensuring that the API client (e.g., a TPP) is authenticated in addition to the server.
Question 2: What is 'account aggregation' in the context of Open Finance?
- Combining multiple bank branches into a single legal entity
- Consolidating financial data from multiple institutions into a unified view for the customer or application (Correct answer)
- Batching payment instructions to reduce transaction fees
- Merging duplicate customer records in a core banking system
Correct answer: Consolidating financial data from multiple institutions into a unified view for the customer or application
Account aggregation uses Open Finance APIs to pull account balances, transactions, and data from multiple banks into a single dashboard or application.
Question 3: In Finastra's developer portal, what is the primary benefit of 'API versioning'?
- It reduces the cost of API calls for registered developers
- It allows Finastra to evolve APIs without breaking existing integrations by maintaining multiple API versions simultaneously (Correct answer)
- It automatically migrates all integrations to the latest API version
- It encrypts older API versions to prevent legacy access
Correct answer: It allows Finastra to evolve APIs without breaking existing integrations by maintaining multiple API versions simultaneously
API versioning (e.g., /v1/, /v2/) lets Finastra introduce breaking changes in new versions while legacy integrations continue working on older versions.
Question 4: What is 'payment initiation' as defined under PSD2?
- A bank's internal process for approving loan disbursements
- A service where a licensed TPP initiates a payment from a customer's account at their bank on the customer's behalf (Correct answer)
- A peer-to-peer transfer between two accounts at the same bank
- A batch settlement process run by card networks
Correct answer: A service where a licensed TPP initiates a payment from a customer's account at their bank on the customer's behalf
Payment Initiation Services (PIS) allow authorized Third Party Providers to trigger payments directly from a customer's bank account via Open Banking APIs.
Question 5: Which data format is predominantly used in Finastra's Open APIs for request and response payloads?
- XML with SOAP envelopes
- CSV with base64 encoding
- JSON (JavaScript Object Notation) (Correct answer)
- Binary Protocol Buffers (protobuf)
Correct answer: JSON (JavaScript Object Notation)
Finastra's modern Open APIs use JSON as the standard payload format due to its human readability, lightweight structure, and broad ecosystem support.
Question 6: What is 'rate limiting' in Open Finance APIs and why does it matter?
- A cap on interest rates that banks can charge through API-initiated loans
- Restricting the number of API requests a client can make in a given time window to protect infrastructure and ensure fair use (Correct answer)
- A limit on the size of financial transactions processed via API
- A regulatory cap on the number of TPPs that can access a bank's API
Correct answer: Restricting the number of API requests a client can make in a given time window to protect infrastructure and ensure fair use
Rate limiting (e.g., 1,000 requests/minute) prevents API abuse, ensures stable performance for all consumers, and protects backend systems from overload.
Question 7: What is the role of 'ISO 20022' in the evolution of financial messaging and Open Finance?
- A cybersecurity certification for API developers
- A rich, flexible financial messaging standard replacing legacy formats like SWIFT MT, enabling richer data in payments (Correct answer)
- A US regulation requiring banks to open APIs to fintechs
- A Finastra-proprietary protocol for inter-bank settlements
Correct answer: A rich, flexible financial messaging standard replacing legacy formats like SWIFT MT, enabling richer data in payments
ISO 20022 provides a structured, data-rich messaging format for financial transactions that improves straight-through processing and analytics compared to legacy SWIFT MT messages.
Finastra Assessment Test Finastra Assessment Open Finance and APIs 4
What does 'mTLS' (mutual TLS) add compared to standard TLS in Open Banking API security?