Chapter 12: Digitisation of Retail Banking Products (JAIIB – Paper 4)

1. Which of the following is a key benefit of digitisation in retail banking?

• A. Increase in manual paperwork
• B. Slower customer service
• C. Faster and more convenient services
• D. Reduced use of technology

Digitisation in retail banking helps provide faster, convenient, and paperless services to customers.

2. Which technology is commonly used for authentication in digital banking services?

• A. Blockchain ledger
• B. OTP (One-Time Password)
• C. Core banking server
• D. CRM software

OTPs are widely used for secure authentication in internet and mobile banking services.

3. Which of the following is a major technology process in retail banking?

• A. Core banking operations
• B. Manual ledger maintenance
• C. Paper cheque processing only
• D. Face-to-face account verification only

Core banking systems centralize and automate banking operations, forming the backbone of retail banking technology processes.

4. Which feature is considered user-friendly in retail banking digital services?

• A. Complex multi-step login process
• B. Hidden charges without notification
• C. Limited access hours
• D. Intuitive interface and 24/7 accessibility

User-friendly digital banking includes intuitive interfaces, easy navigation, and round-the-clock accessibility.

5. Mobile banking apps allow customers to:

• A. Only deposit cheques
• B. Check balances, transfer funds, and pay bills
• C. Visit branch physically every time
• D. Only withdraw cash

Mobile banking apps offer multiple functions including balance inquiry, fund transfer, bill payments, and more.

6. Which of the following is NOT a benefit of technology adoption in retail banking?

• A. Increased human error due to automation
• B. Faster processing of transactions
• C. Enhanced customer satisfaction
• D. Reduced operational cost

Automation reduces human errors; thus, increased human error is not a benefit of technology adoption.

7. Customer analytics in retail banking is primarily used to:

• A. Reduce the number of branches
• B. Avoid technology adoption
• C. Understand customer behavior and improve services
• D. Increase manual operations

Customer analytics helps banks analyze customer behavior, preferences, and transaction patterns to offer better services and personalized products.

8. What is the primary role of IDRBT (Institute for Development and Research in Banking Technology)?

• A. Regulate commercial banks
• B. Conduct research and development in banking technology
• C. Issue currency notes
• D. Monitor stock market trends

IDRBT promotes research, development, and education in banking technology to modernize the Indian banking system.

9. INFINET (Indian Financial Network) is used primarily for:

• A. Customer relationship management
• B. Mobile banking apps only
• C. Marketing and promotion of bank products
• D. Secure interbank communication and transaction settlement

INFINET provides a secure network for communication between banks and facilitates electronic funds transfer and interbank transactions.

10. Which of the following is a key benefit of using customer analytics in banks?

• A. Targeted marketing and personalized product offerings
• B. Slower loan processing
• C. Reduced use of technology
• D. Increased paperwork

Customer analytics enables banks to design products and campaigns tailored to individual customer needs, improving satisfaction and revenue.

11. Which organization provides research support, training, and infrastructure development for banking technology in India?

• A. SEBI
• B. IDRBT
• C. NPCI
• D. IRDAI

IDRBT provides research, training, and infrastructure to modernize banking technology in India.

12. Which of the following is a primary function of INFINET in the Indian banking system?

• A. Conduct retail customer surveys
• B. Issue bank licenses
• C. Connect banks for secure transaction messaging
• D. Provide credit rating services

INFINET connects banks across India, enabling secure communication for interbank transactions and messaging.

13. What is the primary purpose of the Structured Financial Messaging System (SFMS)?

• A. Customer relationship management
• B. Secure electronic communication of financial messages between banks
• C. Mobile banking app development
• D. Stock market transactions only

SFMS is used for secure, standardized, and electronic transmission of financial messages like fund transfers, payments, and settlement instructions between banks.

14. National Financial Switch (NFS) primarily provides:

• A. Core banking services
• B. Mobile banking alerts
• C. Customer analytics services
• D. Interconnectivity of ATMs across banks

NFS enables interbank ATM connectivity, allowing customers to withdraw cash and access banking services from any bank's ATM across India.

15. Which organization manages the National Financial Switch (NFS) in India?

• A. RBI directly
• B. IDRBT
• C. NPCI (National Payments Corporation of India)
• D. SEBI

NPCI manages the National Financial Switch to provide interconnectivity and settlement between ATMs of different banks.

16. Which of the following is a key advantage of SFMS for banks?

• A. Reduces risk of manual errors in financial messaging
• B. Eliminates need for mobile banking
• C. Provides customer credit rating
• D. Conducts retail banking surveys

SFMS automates and standardizes financial messaging, reducing errors and improving efficiency in interbank communications.

17. A customer can withdraw cash from any bank's ATM due to which system?

• A. SFMS
• B. NFS
• C. Core Banking System
• D. Mobile Banking Network

NFS connects ATMs of multiple banks, allowing customers to withdraw cash and access services across any participating bank's ATM.

18. SFMS messages typically follow which standard format?

• A. XML for customer alerts
• B. JSON for retail banking reports
• C. CSV for fund transfers
• D. ISO 20022 standard for financial messaging

SFMS messages are structured according to ISO 20022 standards to ensure uniformity, security, and interoperability in interbank messaging.

19. What is the primary purpose of the Indian Banking Community Cloud (IBCC)?

• A. To provide personal cloud storage for customers
• B. To offer a secure cloud infrastructure for banking operations and services
• C. To host social media banking apps
• D. To provide cloud services for insurance companies only

IBCC provides a secure and shared cloud infrastructure for Indian banks to host applications, store data, and facilitate seamless banking services.

20. Wealth Management Solutions in retail banking primarily aim to:

• A. Help clients manage investments, plan finances, and grow assets
• B. Only provide credit cards to customers
• C. Reduce bank staffing requirements
• D. Operate ATMs and POS machines

Wealth management solutions offer advisory services to clients for investments, financial planning, tax management, and asset growth.

21. Digital lending in retail banking allows customers to:

• A. Only apply for loans in a bank branch
• B. Negotiate loan terms manually with bank staff
• C. Apply for loans online and get faster approval through technology
• D. Only request loan statements

Digital lending enables customers to apply for loans online, verify KYC digitally, and receive faster approvals through automated processes.

22. Which technology is crucial for enabling digital lending platforms?

• A. Manual ledger books
• B. Face-to-face verification only
• C. Paper-based loan applications
• D. Core banking systems integrated with online portals

Digital lending relies on integrated core banking systems, online portals, and automated verification to process loans efficiently.

23. A key advantage of IBCC for banks is:

• A. Reducing customer interaction completely
• B. Shared cloud infrastructure reduces costs and improves efficiency
• C. Only supports branch-level operations
• D. Eliminates the need for internet banking

IBCC provides a common cloud platform, allowing banks to share resources, reduce infrastructure costs, and improve operational efficiency.

24. Wealth management solutions can include which of the following services?

• A. Investment advisory, portfolio management, and retirement planning
• B. Only ATM services
• C. Only savings account deposits
• D. Only branch cash withdrawals

Wealth management encompasses advisory on investments, tax planning, estate planning, and retirement solutions for clients.