D367 - CUSTOM QUESTIONS

A bank uses a system where one application can request customer account data from another system using predefined rules.

What concept does this describe?

A. Tokenization
B. API
C. Blockchain
D. Cloud computing

• B (API) ✅ → A set of rules allowing software to communicate (exact definition in your doc)

• A ❌ → Tokenization replaces sensitive data, not communication

• C ❌ → Blockchain = distributed ledger

• D ❌ → Cloud = infrastructure, not communication rules

A fintech company replaces customers’ credit card numbers with random strings during transactions.

What concept is being used?

A. Encryption
B. Tokenization
C. API-fication
D. Blockchain

• B ✅ → Replaces sensitive data with a non-usable token

• A ❌ → Encryption scrambles data but doesn’t replace it

• C ❌ → Turning services into APIs

• D ❌ → Ledger system, not data replacement

A startup uses AWS to scale its servers instantly as user demand increases instead of buying hardware.

What concept does this represent?

A. SaaS
B. Cloud computing
C. API
D. IoT

• B ✅ → On-demand infrastructure, scalability, cost efficiency

• A ❌ → SaaS = software, not infrastructure

• C ❌ → Communication layer

• D ❌ → Connected devices

Which cloud service model provides applications accessed through a browser on a pay-per-use basis?

A. IaaS
B. SaaS
C. PaaS
D. API

• B ✅ → Software via browser (exact definition)

• A ❌ → Infrastructure (servers/storage)

• C ❌ → Developer platform

• D ❌ → Not a cloud model

A fintech app recommends an optimal investment portfolio automatically.

What type of AI is this?

A. Descriptive
B. Predictive
C. Prescriptive (Decision)
D. Business Intelligence

• C ✅ → Recommends what to do

• A ❌ → Only explains past

• B ❌ → Predicts future, no action

• D ❌ → Reporting/dashboarding only

A borrower receives a loan that must be repaid in fixed installments over time.

What type of credit is this?

A. Open-ended credit
B. Close-ended credit
C. P2P lending
D. Payday lending

• B ✅ → Fixed amount + fixed repayment schedule

• A ❌ → Revolving credit

• C ❌ → Lending type, not repayment structure

• D ❌ → Short-term high-interest loan

Which lending type involves no intermediaries and occurs directly between individuals?

A. POS lending
B. Payday lending
C. P2P lending
D. Microfinance

• C ✅ (P2P lending) → This is direct person-to-person lending, usually through an online platform. No traditional bank sits in the middle.

• A ❌ (POS lending) → Happens at checkout (like financing a purchase). Still involves a lender/platform.

• B ❌ (Payday lending) → Comes from a lender/company, not individuals.

• D ❌ (Microfinance) → Usually institutions lending small amounts, not direct individuals.

A fintech lender approves student loans based on the borrower’s degree and future earning potential rather than their current credit score.

What concept is being demonstrated?

A. Traditional lending
B. Credit score dependency
C. Fintech alternative credit evaluation
D. Informal lending

• C ✅ → Fintech uses alternative data (education, career path, future income).

• A ❌ → Traditional = heavy reliance on credit score/history.

• B ❌ → Opposite — they’re NOT relying on credit score.

• D ❌ → Informal = friends/family lending, not structured fintech analysis.

Which is a key drawback of traditional credit scoring systems?

A. Too predictive
B. Ignores future earning potential
C. Requires too much AI
D. Always includes cash users

• B ✅ → Big flaw: it looks at past behavior, not future potential (like a student with no history).

• A ❌ → It’s actually not predictive enough

• C ❌ → Credit scores don’t rely heavily on AI in this context

• D ❌ → Opposite — it often ignores cash-based users entirely

Which lending type is MOST associated with extremely high interest rates and short repayment periods?

A. Microfinance
B. Payday lending
C. P2P lending
D. POS lending

• B ✅ → Payday loans = short-term + extremely high interest, often trap borrowers

• A ❌ → Microfinance = lower-cost loans for underserved populations

• C ❌ → P2P varies, not inherently high interest

• D ❌ → POS lending is usually structured installment payments

A customer taps their phone near a POS terminal to complete a payment.

What technology enables this?

A. API
B. NFC
C. Blockchain
D. IoT

In NFC communication, which scenario describes a credit card transaction?

A. Two-way communication
B. One-way communication
C. Blockchain verification
D. Cloud authentication

• B ✅ (NFC) → Short-range communication (a few cm) enabling tap-to-pay

• A ❌ (API) → Software communication, not physical device interaction

• C ❌ (Blockchain) → Ledger system, not tap payments

• D ❌ (IoT) → Connected devices broadly, but not specific tech for payment tap

What is the primary purpose of KYC compliance?

A. Increase profits
B. Verify identity and prevent financial crime
C. Enable faster payments
D. Replace banks

• B ✅ → KYC = identity verification + risk assessment (anti-fraud, anti-money laundering)

• A ❌ → Indirect benefit maybe, but not purpose

• C ❌ → Not about speed

• D ❌ → Completely unrelated

Which mobile security feature isolates apps to prevent system-wide risk?

A. Encryption
B. Tokenization
C. Sandboxing
D. API

• C ✅ (Sandboxing) → Keeps apps in a “contained environment” so damage doesn’t spread

• A ❌ → Protects data, not system isolation

• B ❌ → Replaces sensitive data

• D ❌ → Communication tool

A model predicts the probability that a customer will default on a loan.

What type of model is this?

A. Descriptive
B. Predictive
C. Prescriptive
D. Business Intelligence

• B ✅ → Predicts future outcomes

• A ❌ → Only explains past

• C ❌ → Recommends actions

• D ❌ → Reporting/visualization only

A dashboard shows last month’s revenue and transaction trends.

What type of AI/analytics is this?

A. Predictive
B. Prescriptive
C. Descriptive
D. Neural network

• C ✅ → Summarizes past data (what happened)

• A ❌ → Predicts future

• B ❌ → Suggests actions

• D ❌ → Model type, not purpose

A model recommends whether to approve or deny a loan application.

What type of analytics is this?

A. Predictive
B. Descriptive
C. Prescriptive
D. Time series

• C ✅ → Recommends decision (what to do)

• A ❌ → Would only predict likelihood

• B ❌ → Past summary only

• D ❌ → Time-based forecasting

Which Big Data “V” refers to the speed at which data is processed?

A. Volume
B. Variety
C. Velocity
D. Veracity

• C ✅ (Velocity) → Speed of data creation/processing

• A ❌ (Volume) → Amount of data

• B ❌ (Variety) → Types of data

• D ❌ (Veracity) → Accuracy/trustworthiness

A model performs extremely well on training data but poorly on new data.

What issue is this?

A. Underfitting
B. Overfitting
C. Concept drift
D. Feature leakage

• B ✅ (Overfitting) → Memorizes training data, doesn’t generalize

• A ❌ → Too simple, bad everywhere

• C ❌ → Data changes over time

• D ❌ → Using future/test data incorrectly

A startup joins a short-term program, receives funding, mentorship, and gives up equity.

What is this?

A. Incubator
B. Accelerator
C. Venture capital
D. Crowdfunding

• B ✅ → Fast-paced, short-term, equity exchange

• A ❌ → Longer-term, early-stage support, usually no immediate equity

• C ❌ → Investment, not program

• D ❌ → Public funding

Which funding stage is MOST appropriate for a company with only an idea?

A. Series B
B. Venture capital
C. Seed funding
D. IPO

• C ✅ → Earliest funding stage

• A ❌ → Later-stage scaling

• B ❌ → Usually after traction

• D ❌ → Public offering (very late stage)

Two companies collaborate but remain independent.

What is this called?

A. Merger
B. Acquisition
C. Partnership
D. IPO

• C ✅ → Work together, no ownership change

• A ❌ → Become one company

• B ❌ → One buys another

• D ❌ → Public listing

A company buys another company completely.

What is this?

A. Partnership
B. Merger
C. Acquisition
D. Co-branding

• C ✅ → Full ownership transfer

• A ❌ → Collaboration only

• B ❌ → Combine into one entity

• D ❌ → Shared branding only

Why do fintech startups often fail?

A. Too much regulation
B. Lack of customer demand
C. Failure to secure funding
D. Too much infrastructure

• C ✅ → Most rely on investor funding → if it stops, they collapse

• A ❌ → Not main reason in your material

• B ❌ → Demand often exists

• D ❌ → Opposite — fintechs are asset-light

A ride-sharing app allows users to take out a small loan directly within the app to pay for rides.

What is the BEST description?

A. Digital wallet
B. Embedded finance
C. Mobile banking
D. P2P lending

• B ✅ → Financial services built inside a non-financial platform (key concept)

• A ❌ → Wallet stores/payment method, not lending feature

• C ❌ → Banking apps, not integrated into other platforms

• D ❌ → Person-to-person lending, not platform-based service

A bank allows third-party apps to access customer financial data (with permission) to build new services.

What concept is this?

A. Cloud computing
B. Open banking
C. Blockchain
D. Tokenization

• B ✅ → Open banking = sharing financial data via APIs

• A ❌ → Infrastructure

• C ❌ → Ledger system

• D ❌ → Data protection method

A company turns its internal services into APIs so other developers can build on top of them.

What is this strategy called?

A. Tokenization
B. API-fication
C. SaaS
D. Open banking

• B ✅ → Turning services into APIs = monetization + scalability

• A ❌ → Data security

• C ❌ → Delivering software, not exposing services

• D ❌ → Specific to banking data sharing

Which scenario BEST represents financial inclusion?

A. Offering premium investment tools to wealthy clients
B. Providing microloans to underserved populations
C. Increasing bank fees
D. Restricting credit access

• B ✅ → Expanding access to financial services

• A ❌ → Opposite

• C ❌ → Reduces access

• D ❌ → Reduces access

Which is the BEST distinction between a digital wallet and mobile banking?

A. Digital wallets cannot store money
B. Mobile banking is only for businesses
C. Digital wallets focus on payments, while mobile banking provides full banking services
D. They are the same thing

• C ✅ → Wallet = payments; banking = full account services

• A ❌ → Wallets can store value

• B ❌ → Mobile banking is for individuals too

• D ❌ → Test trap

A customer finances a purchase at checkout and pays over time with fixed installments.

What is the BEST classification?

A. Payday lending
B. POS lending
C. P2P lending
D. Informal lending

• B ✅ → Happens directly at checkout

• A ❌ → Short-term emergency loans

• C ❌ → Person-to-person

• D ❌ → Friends/family

• Note: BNPL is a type of POS lending → they may try to confuse you

A startup receives long-term mentorship and support without immediate pressure to scale.

What is this?

A. Accelerator
B. Incubator
C. Venture capital
D. Seed funding

• B ✅ → Slow growth, nurturing environment

• A ❌ → Fast, short-term, equity-driven

• C ❌ → Just funding

• D ❌ → Funding stage, not program

Which scenario BEST demonstrates a tradeoff between innovation and regulation?

A. A company increases profits
B. Strict compliance slows product development
C. A startup hires more employees
D. A bank improves customer service

• B ✅ → Regulation can slow innovation → classic fintech tension

• Others ❌ → Not related

Which option BEST represents data privacy, not security?

A. Encrypting transaction data
B. Restricting access to personal data
C. Ensuring data is not misused without consent
D. Using firewalls

• C ✅ → Privacy = how data is used ethically

• A ❌ → Security

• B ❌ → Security control

• D ❌ → Security

A fintech platform predicts loan default risk and then automatically declines high-risk applicants.

What combination is being used?

A. Descriptive only
B. Predictive only
C. Predictive + Prescriptive
D. Prescriptive only

C. Predictive + Prescriptive

Predictive → estimates default risk

Prescriptive → makes decision (approve/deny)