Digital Banking and Financial Technology
Digital Banking and Financial Technology
This domain tests electronic channels, payment systems and the security controls that protect customers. Expect UPI, cards, wallets, internet banking, NPCI systems and cyber-fraud responses.
Core rules and concepts
- UPI is an instant account-to-account payment system operated by NPCI; a VPA identifies the account.
- NEFT, RTGS and IMPS differ in settlement timing and value limits; UPI is designed for retail immediacy.
- Two-factor authentication combines something you know with something you have or are.
- Phishing, vishing, smishing and screen-sharing frauds target credentials, not bank servers.
- Report unauthorised transactions immediately; blocking the channel limits further loss.
- Digital signatures and encryption support authenticity and confidentiality.
Worked example
A customer transfers ₹5,000 by UPI to a wrong VPA. The bank should log a dispute, block further access if credentials may be compromised, and raise the case with the beneficiary bank through the network. The money is not automatically reversed because a valid UPI instruction was authenticated. Reasoning: the customer’s quick report and the beneficiary bank’s cooperation matter, but recovery depends on the funds still being available and the evidence.
Traps that cost marks
- Saying UPI transfers are always reversible.
- Sharing an OTP with a bank officer.
- Confusing a collect request with a payment request; approving a collect request can debit you.
- Treating a wallet as a bank deposit account.