Chapter 47: Impact of Technology Adoption and Trends in Banking Technology (JAIIB – Paper 2)

1. Which of the following technologies is primarily used in UPI (Unified Payments Interface) for real-time fund transfers?

  • A. Blockchain
  • B. Artificial Intelligence
  • C. Immediate Payment Service (IMPS) infrastructure
  • D. Cloud computing
UPI transactions are enabled using the IMPS infrastructure, allowing real-time fund transfer 24x7.

2. Banks adopting Chatbots for customer service are mainly leveraging which technology trend?

  • A. Artificial Intelligence (AI) and Natural Language Processing (NLP)
  • B. Internet of Things (IoT)
  • C. Blockchain
  • D. Robotic Process Automation (RPA)
Chatbots in banking rely on AI and NLP to interact with customers and provide instant query resolution.

3. Blockchain technology in banking is most suitable for:

  • A. Increasing ATM withdrawal limits
  • B. Issuing debit cards
  • C. Conducting physical branch audits
  • D. Ensuring secure, tamper-proof transaction records
Blockchain creates a decentralized, immutable ledger, making it ideal for secure transaction records and fraud prevention in banking.

4. A bank implements Robotic Process Automation (RPA) for processing loan applications. What will be the primary benefit?

  • A. Eliminating credit risk completely
  • B. Faster and error-free repetitive processing tasks
  • C. Higher interest rate on loans
  • D. Better ATM network availability
RPA automates repetitive tasks like loan processing and KYC verification, reducing errors and improving efficiency.

5. Open Banking trend allows customers to share their financial data securely with third-party providers. This is enabled through:

  • A. RTGS
  • B. IMPS
  • C. Application Programming Interfaces (APIs)
  • D. Virtual Private Networks (VPNs)
Open Banking relies on secure APIs to allow third-party fintechs to access customer financial data (with consent).

6. One major role of technology upgradation in banking is:

  • A. To increase manual intervention
  • B. To reduce financial literacy of customers
  • C. To discourage digital channels
  • D. To improve efficiency, speed, and customer service
Upgradation of technology reduces dependence on manual work and enhances efficiency, accuracy, and customer satisfaction.

7. Which of the following is a direct use of technology upgradation in risk management?

  • A. Increasing paperwork in loan processing
  • B. Using data analytics and AI to detect fraud patterns
  • C. Maintaining only physical ledgers
  • D. Restricting digital channels
Banks use advanced analytics, AI, and machine learning to identify unusual patterns and prevent fraud, which is a key benefit of technology upgradation.

8. Core Banking Solutions (CBS) introduced through technology upgradation allow customers to:

  • A. Access their accounts from any branch of the bank
  • B. Restrict transactions only to the home branch
  • C. Perform transactions only in physical mode
  • D. Eliminate the need for ATM networks
CBS integrates all branches into a single system, enabling customers to operate their accounts from any branch, ATM, or digital channel.

9. Which of the following is a customer-centric benefit of technology upgradation?

  • A. More manual forms to fill
  • B. Restricted service timings
  • C. 24x7 banking through ATMs, internet, and mobile banking
  • D. Increase in branch-only transactions
Technology upgrades such as mobile and internet banking enable customers to access banking services anytime, anywhere.

10. A bank implements biometric authentication for mobile banking. This reflects the use of technology upgradation in:

  • A. Marketing strategies
  • B. Enhancing security in customer transactions
  • C. Increasing branch paperwork
  • D. Reducing digital penetration
Biometric authentication is an advanced technology that enhances the security of digital transactions and prevents unauthorized access.

11. Which of the following best describes the concept of “Neobank”?

  • A. A digital-only bank that operates without physical branches
  • B. A cooperative bank with rural focus
  • C. A traditional bank offering home loans
  • D. A foreign bank with overseas branches
Neobanks are fully digital banks that provide services via mobile apps and websites without maintaining physical branch infrastructure.

12. The launch of Central Bank Digital Currency (CBDC) by various countries reflects which global trend in banking?

  • A. Increasing use of barter trade
  • B. Preference for only cash transactions
  • C. Focus on manual banking
  • D. Digitalization of currency and payments
CBDCs are digital versions of national currencies issued by central banks, reflecting the trend toward digital money and secure electronic transactions.

13. Open Banking regulations in many countries require banks to provide secure customer data access through:

  • A. SWIFT codes
  • B. Application Programming Interfaces (APIs)
  • C. Bank guarantees
  • D. Magnetic stripe cards
Open Banking relies on secure APIs that allow third-party providers to access banking data (with customer consent), boosting competition and innovation.

14. Globally, banks are partnering with fintech companies primarily to:

  • A. Reduce the number of ATMs
  • B. Increase paperwork in transactions
  • C. Enhance innovation in payments, lending, and customer experience
  • D. Restrict cross-border transactions
Banks collaborate with fintechs to leverage new technologies in payments, lending, robo-advisory, and customer services, making banking more efficient and innovative.

15. A key global trend in banking is the use of “Big Data Analytics”. Its primary role is:

  • A. Reducing customer awareness
  • B. Restricting internet banking
  • C. Limiting product innovation
  • D. Analyzing customer behavior and improving decision-making
Big Data Analytics allows banks to study customer patterns, detect risks, personalize services, and take better strategic decisions.

16. One major impact of Information Technology (IT) on banking operations is:

  • A. Increased dependence on manual ledger posting
  • B. Restriction of customer access to banking services
  • C. Faster processing and real-time availability of data
  • D. Limitation of banking hours
IT enables real-time processing and availability of customer data across branches and digital channels, improving speed and accuracy.

17. The introduction of ATMs in banking is an example of IT impact in which area?

  • A. Customer convenience and 24x7 service availability
  • B. Increasing paperwork for withdrawals
  • C. Restricting banking to branch hours
  • D. Manual processing of transactions
ATMs revolutionized banking by enabling customers to withdraw cash and perform transactions anytime, without branch dependency.

18. Which of the following is a direct security challenge arising from the adoption of IT in banking?

  • A. Manual errors in passbook writing
  • B. Cyber threats like phishing, hacking, and malware attacks
  • C. Delayed transfer of physical cash
  • D. Increased paperwork in compliance
With IT adoption, banks face risks of cybercrimes including hacking, phishing, identity theft, and malware attacks, requiring strong cybersecurity measures.

19. Financial inclusion through IT in banking is mainly achieved by:

  • A. Limiting branch expansion
  • B. Manual record-keeping in rural banks
  • C. Restricting mobile banking usage
  • D. Use of mobile banking, micro-ATMs, and digital wallets
IT-driven tools such as mobile banking, micro-ATMs, and Aadhaar-enabled payment systems extend banking services to unbanked and rural areas.

20. Core Banking Solutions (CBS), a result of IT adoption, provide banks with:

  • A. Centralized data management and customer access across all branches
  • B. Restriction to home branch only
  • C. Delay in inter-branch transactions
  • D. Limited digital transaction capability
CBS allows centralized processing and enables customers to access banking services from any branch, ATM, or digital channel seamlessly.

21. Banks are increasingly using Artificial Intelligence (AI) in customer service. Which is a common example?

  • A. Manual passbook printing
  • B. Chatbots and virtual assistants handling customer queries
  • C. Only offline complaint registers
  • D. Handwritten signature verification
AI-powered chatbots like EVA, Siri-like assistants, and WhatsApp bots are widely used to provide instant 24x7 customer service in banks.

22. Machine Learning in banking is primarily used for:

  • A. Printing cheques
  • B. Issuing physical tokens for queue management
  • C. Maintaining physical registers
  • D. Detecting fraud patterns and credit scoring
Machine Learning algorithms analyze large data sets to detect suspicious activity, improve credit scoring, and predict customer behavior.

23. Which emerging technology allows banks to offer decentralized and tamper-proof transaction records?

  • A. Cloud storage
  • B. Internet of Things (IoT)
  • C. Blockchain
  • D. Quantum computing
Blockchain technology provides decentralized, secure, and tamper-proof ledgers, reducing fraud and improving trust in transactions.

24. Cloud computing helps banks by:

  • A. Reducing IT infrastructure costs and enabling scalability
  • B. Increasing dependency on only physical servers
  • C. Limiting digital services
  • D. Restricting internet banking
Cloud solutions provide on-demand computing power, reduce hardware costs, and allow banks to scale up digital services quickly.

25. Internet of Things (IoT) in banking can be applied in:

  • A. Manual cheque clearing
  • B. Smart ATMs and wearable payment devices
  • C. Handwritten registers
  • D. Paper-based statements only
IoT enables innovative banking like smart ATMs, wearable devices (watches, bands) for payments, and real-time transaction monitoring.

26. Which of the following emerging technologies has the potential to break existing encryption systems, posing a challenge for banking security?

  • A. AI-based chatbots
  • B. Cloud computing
  • C. IoT-enabled devices
  • D. Quantum computing
Quantum computing can perform complex calculations extremely fast, potentially breaking traditional encryption systems used in banking security.

27. “Green Banking Technology” is an emerging trend aimed at:

  • A. Promoting only paper-based banking
  • B. Increasing carbon emissions
  • C. Encouraging paperless banking and eco-friendly operations
  • D. Limiting use of renewable energy
Green banking promotes sustainable practices such as paperless transactions, energy-efficient data centers, and use of renewable energy in bank operations.

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