FinTech Regulation and Compliance: 2026
Official Prep
Licensing, Anti-Money Laundering & Digital Governance (100 Questions)
1. What is the primary purpose of "Anti-Money Laundering" (AML) regulations?
A) To make banking more expensive for the consumer
B) To prevent criminals from disguising illegally obtained funds as legitimate income
C) To limit the amount of cash a person can carry
D) To ensure all banks have the same logo
Correct Answer: B) To prevent criminals from disguising illegally obtained funds as
legitimate income
2. "KYC" (Know Your Customer) requires financial institutions to:
A) Know the customer's favorite color
B) Verify the identity of their clients and assess potential risks of illegal intentions
C) Send a gift to every new customer
D) Track the customer's location via GPS 24/7
Correct Answer: B) Verify the identity of their clients and assess potential risks of illegal
intentions
3. The "Travel Rule" (FATF) mandates that virtual asset service providers (VASPs) must:
A) Only allow travel-related purchases
B) Exchange information about the originator and beneficiary of crypto transfers above a certain
threshold
C) Prohibit customers from traveling abroad
D) Only verify IDs in person at a physical branch
Correct Answer: B) Exchange information about the originator and beneficiary of crypto
transfers above a certain threshold
4. "Open Banking" regulation (like PSD3 in the EU) focuses on:
A) Forcing banks to close their branches
B) Allowing third-party financial service providers to access customer account data via APIs with
user consent
C) Making all bank accounts public for everyone
D) Removing the need for passwords in banking
Correct Answer: B) Allowing third-party financial service providers to access customer
account data via APIs with user consent
,5. "GDPR" impacts FinTech primarily by:
A) Restricting the speed of financial apps
B) Setting strict requirements on how personal and financial data is collected, stored, and
processed
C) Forcing all banks to delete their databases every year
D) Limiting the amount of profit a bank can make
Correct Answer: B) Setting strict requirements on how personal and financial data is
collected, stored, and processed
6. What is a "Regulatory Sandbox"?
A) A place for children to play at the bank
B) A controlled testing environment where FinTech firms can test innovative products under
regulator supervision
C) A tool for building sandcastles on a beach
D) An offline database for secure storage
Correct Answer: B) A controlled testing environment where FinTech firms can test
innovative products under regulator supervision
7. "Operational Resilience" for FinTechs in 2026 includes:
A) Being able to survive a physical fire only
B) The ability to withstand, respond to, and recover from operational disruptions (e.g.,
cyberattacks, system failures)
C) Hiring more people to answer phones
D) Having a backup power generator in every home
Correct Answer: B) The ability to withstand, respond to, and recover from operational
disruptions (e.g., cyberattacks, system failures)
8. "MiCA" (Markets in Crypto-Assets) is a comprehensive regulation adopted by:
A) The USA
B) The European Union
C) Japan
D) Australia
Correct Answer: B) The European Union
9. "Stablecoins" under MiCA are regulated to ensure:
A) They never change price
B) They have sufficient reserves to back their value and protect consumers
C) They can only be used by governments
D) They are banned from public exchange
, Correct Answer: B) They have sufficient reserves to back their value and protect
consumers
10. What is "RegTech"?
A) Technology used for regular cleaning of offices
B) Use of technology (AI, Big Data, Blockchain) to improve regulatory monitoring and reporting
compliance
C) A new type of high-tech computer monitor
D) A training course for bank tellers
Correct Answer: B) Use of technology to improve regulatory monitoring and reporting
compliance
11. "PII" (Personally Identifiable Information) includes:
A) Only the company's name
B) Name, social security number, email, and biometric data
C) Only public stock prices
D) The number of clicks on a website
Correct Answer: B) Name, social security number, email, and biometric data
12. "SCA" (Strong Customer Authentication) requires:
A) At least two independent factors (e.g., password + biometric) for payment authorization
B) A very long password only
C) A signature on a piece of paper
D) A verbal confirmation from the bank manager
Correct Answer: A) At least two independent factors (e.g., password + biometric) for
payment authorization
13. "Smart Contract Audits" are important for compliance because:
A) They check the grammar of the contract
B) They verify code security to prevent hacks and financial loss, often required for insurance
C) They check if the lawyer is qualified
D) They calculate the legal fees
Correct Answer: B) They verify code security to prevent hacks and financial loss, often
required for insurance
14. In 2026, "AI Regulation in Finance" focuses on:
A) Banning AI from using calculators
B) Transparency, explainability, and preventing algorithmic bias in lending/credit decisions
C) Making AI speak only one language
D) Ensuring AI only works during office hours
Correct Answer: B) Transparency, explainability, and preventing algorithmic bias in
lending/credit decisions
15. "Data Localization" laws require:
Official Prep
Licensing, Anti-Money Laundering & Digital Governance (100 Questions)
1. What is the primary purpose of "Anti-Money Laundering" (AML) regulations?
A) To make banking more expensive for the consumer
B) To prevent criminals from disguising illegally obtained funds as legitimate income
C) To limit the amount of cash a person can carry
D) To ensure all banks have the same logo
Correct Answer: B) To prevent criminals from disguising illegally obtained funds as
legitimate income
2. "KYC" (Know Your Customer) requires financial institutions to:
A) Know the customer's favorite color
B) Verify the identity of their clients and assess potential risks of illegal intentions
C) Send a gift to every new customer
D) Track the customer's location via GPS 24/7
Correct Answer: B) Verify the identity of their clients and assess potential risks of illegal
intentions
3. The "Travel Rule" (FATF) mandates that virtual asset service providers (VASPs) must:
A) Only allow travel-related purchases
B) Exchange information about the originator and beneficiary of crypto transfers above a certain
threshold
C) Prohibit customers from traveling abroad
D) Only verify IDs in person at a physical branch
Correct Answer: B) Exchange information about the originator and beneficiary of crypto
transfers above a certain threshold
4. "Open Banking" regulation (like PSD3 in the EU) focuses on:
A) Forcing banks to close their branches
B) Allowing third-party financial service providers to access customer account data via APIs with
user consent
C) Making all bank accounts public for everyone
D) Removing the need for passwords in banking
Correct Answer: B) Allowing third-party financial service providers to access customer
account data via APIs with user consent
,5. "GDPR" impacts FinTech primarily by:
A) Restricting the speed of financial apps
B) Setting strict requirements on how personal and financial data is collected, stored, and
processed
C) Forcing all banks to delete their databases every year
D) Limiting the amount of profit a bank can make
Correct Answer: B) Setting strict requirements on how personal and financial data is
collected, stored, and processed
6. What is a "Regulatory Sandbox"?
A) A place for children to play at the bank
B) A controlled testing environment where FinTech firms can test innovative products under
regulator supervision
C) A tool for building sandcastles on a beach
D) An offline database for secure storage
Correct Answer: B) A controlled testing environment where FinTech firms can test
innovative products under regulator supervision
7. "Operational Resilience" for FinTechs in 2026 includes:
A) Being able to survive a physical fire only
B) The ability to withstand, respond to, and recover from operational disruptions (e.g.,
cyberattacks, system failures)
C) Hiring more people to answer phones
D) Having a backup power generator in every home
Correct Answer: B) The ability to withstand, respond to, and recover from operational
disruptions (e.g., cyberattacks, system failures)
8. "MiCA" (Markets in Crypto-Assets) is a comprehensive regulation adopted by:
A) The USA
B) The European Union
C) Japan
D) Australia
Correct Answer: B) The European Union
9. "Stablecoins" under MiCA are regulated to ensure:
A) They never change price
B) They have sufficient reserves to back their value and protect consumers
C) They can only be used by governments
D) They are banned from public exchange
, Correct Answer: B) They have sufficient reserves to back their value and protect
consumers
10. What is "RegTech"?
A) Technology used for regular cleaning of offices
B) Use of technology (AI, Big Data, Blockchain) to improve regulatory monitoring and reporting
compliance
C) A new type of high-tech computer monitor
D) A training course for bank tellers
Correct Answer: B) Use of technology to improve regulatory monitoring and reporting
compliance
11. "PII" (Personally Identifiable Information) includes:
A) Only the company's name
B) Name, social security number, email, and biometric data
C) Only public stock prices
D) The number of clicks on a website
Correct Answer: B) Name, social security number, email, and biometric data
12. "SCA" (Strong Customer Authentication) requires:
A) At least two independent factors (e.g., password + biometric) for payment authorization
B) A very long password only
C) A signature on a piece of paper
D) A verbal confirmation from the bank manager
Correct Answer: A) At least two independent factors (e.g., password + biometric) for
payment authorization
13. "Smart Contract Audits" are important for compliance because:
A) They check the grammar of the contract
B) They verify code security to prevent hacks and financial loss, often required for insurance
C) They check if the lawyer is qualified
D) They calculate the legal fees
Correct Answer: B) They verify code security to prevent hacks and financial loss, often
required for insurance
14. In 2026, "AI Regulation in Finance" focuses on:
A) Banning AI from using calculators
B) Transparency, explainability, and preventing algorithmic bias in lending/credit decisions
C) Making AI speak only one language
D) Ensuring AI only works during office hours
Correct Answer: B) Transparency, explainability, and preventing algorithmic bias in
lending/credit decisions
15. "Data Localization" laws require:
