ABSA latest exam study guide 205/2026 Actual questions
&100% Verified Correct Answers
1. What is the primary purpose of customer due diligence (CDD) in banking?
A. To increase loan interest rates
B. To identify and verify customer identity
C. To reduce employee salaries
D. To advertise banking products
B. To identify and verify customer identity
Rationale: Customer due diligence helps banks verify customer identities, assess risks, and
prevent fraud or money laundering activities.
2. Which department is mainly responsible for monitoring suspicious financial transactions?
A. Human Resources
B. Compliance Department
C. Marketing Department
D. Procurement Department
B. Compliance Department
Rationale: The compliance department ensures banking activities follow legal and regulatory
requirements, including monitoring suspicious transactions.
3. What does KYC stand for in banking?
A. Keep Your Cash
B. Know Your Customer
C. Know Your Credit
D. Keep Your Customer
B. Know Your Customer
Rationale: KYC refers to procedures used by banks to verify customer identity and reduce
financial crime risks.
, 4. Which of the following is considered confidential customer information?
A. Public advertisements
B. Customer account balance
C. Bank branch location
D. ATM operating hours
B. Customer account balance
Rationale: Customer financial information is private and protected under banking confidentiality
and data protection regulations.
5. What is the main purpose of anti-money laundering (AML) regulations?
A. To improve office attendance
B. To prevent illegal funds from entering the financial system
C. To reduce marketing costs
D. To increase customer fees
B. To prevent illegal funds from entering the financial system
Rationale: AML regulations help banks detect and prevent financial crimes involving illegally
obtained money.
6. Which banking service allows customers to access accounts using a smartphone?
A. Postal banking
B. Mobile banking
C. Warehouse banking
D. Manual banking
B. Mobile banking
Rationale: Mobile banking enables customers to perform transactions and manage accounts
through mobile devices.
7. What should an employee do when suspicious activity is detected?
A. Ignore it
B. Share it on social media
,C. Report it through official procedures
D. Discuss it with customers
C. Report it through official procedures
Rationale: Suspicious activities must be reported internally to ensure proper investigation and
compliance with regulations.
8. What is credit risk?
A. Risk of internet failure
B. Risk of employee absence
C. Risk of a borrower failing to repay a loan
D. Risk of advertising costs increasing
C. Risk of a borrower failing to repay a loan
Rationale: Credit risk occurs when borrowers cannot meet repayment obligations, causing
possible financial losses.
9. Which action helps improve cybersecurity in banking?
A. Sharing passwords
B. Clicking unknown links
C. Updating software regularly
D. Ignoring security alerts
C. Updating software regularly
Rationale: Regular software updates help protect systems against security vulnerabilities and
cyber threats.
10. What is the role of internal audits in banking?
A. To organize office meetings
B. To supervise parking areas
C. To evaluate controls and ensure compliance
D. To advertise bank products
C. To evaluate controls and ensure compliance
, Rationale: Internal audits assess whether banking controls, policies, and procedures are
functioning effectively and legally.
11. What is the main purpose of a savings account?
A. To purchase shares
B. To safely store money while earning interest
C. To avoid paying taxes
D. To apply for employment
B. To safely store money while earning interest
Rationale: Savings accounts help customers keep money secure while earning interest over time.
12. Which document is commonly required to open a bank account?
A. Grocery receipt
B. Identification document
C. Bus ticket
D. Library card
B. Identification document
Rationale: Banks require official identification to verify customer identity and comply with
regulations.
13. What is phishing?
A. A banking reward program
B. A cyberattack used to steal sensitive information
C. A legal tax process
D. A type of savings account
B. A cyberattack used to steal sensitive information
Rationale: Phishing scams trick people into revealing passwords, banking details, or
confidential information.
14. Why are strong passwords important in banking?
&100% Verified Correct Answers
1. What is the primary purpose of customer due diligence (CDD) in banking?
A. To increase loan interest rates
B. To identify and verify customer identity
C. To reduce employee salaries
D. To advertise banking products
B. To identify and verify customer identity
Rationale: Customer due diligence helps banks verify customer identities, assess risks, and
prevent fraud or money laundering activities.
2. Which department is mainly responsible for monitoring suspicious financial transactions?
A. Human Resources
B. Compliance Department
C. Marketing Department
D. Procurement Department
B. Compliance Department
Rationale: The compliance department ensures banking activities follow legal and regulatory
requirements, including monitoring suspicious transactions.
3. What does KYC stand for in banking?
A. Keep Your Cash
B. Know Your Customer
C. Know Your Credit
D. Keep Your Customer
B. Know Your Customer
Rationale: KYC refers to procedures used by banks to verify customer identity and reduce
financial crime risks.
, 4. Which of the following is considered confidential customer information?
A. Public advertisements
B. Customer account balance
C. Bank branch location
D. ATM operating hours
B. Customer account balance
Rationale: Customer financial information is private and protected under banking confidentiality
and data protection regulations.
5. What is the main purpose of anti-money laundering (AML) regulations?
A. To improve office attendance
B. To prevent illegal funds from entering the financial system
C. To reduce marketing costs
D. To increase customer fees
B. To prevent illegal funds from entering the financial system
Rationale: AML regulations help banks detect and prevent financial crimes involving illegally
obtained money.
6. Which banking service allows customers to access accounts using a smartphone?
A. Postal banking
B. Mobile banking
C. Warehouse banking
D. Manual banking
B. Mobile banking
Rationale: Mobile banking enables customers to perform transactions and manage accounts
through mobile devices.
7. What should an employee do when suspicious activity is detected?
A. Ignore it
B. Share it on social media
,C. Report it through official procedures
D. Discuss it with customers
C. Report it through official procedures
Rationale: Suspicious activities must be reported internally to ensure proper investigation and
compliance with regulations.
8. What is credit risk?
A. Risk of internet failure
B. Risk of employee absence
C. Risk of a borrower failing to repay a loan
D. Risk of advertising costs increasing
C. Risk of a borrower failing to repay a loan
Rationale: Credit risk occurs when borrowers cannot meet repayment obligations, causing
possible financial losses.
9. Which action helps improve cybersecurity in banking?
A. Sharing passwords
B. Clicking unknown links
C. Updating software regularly
D. Ignoring security alerts
C. Updating software regularly
Rationale: Regular software updates help protect systems against security vulnerabilities and
cyber threats.
10. What is the role of internal audits in banking?
A. To organize office meetings
B. To supervise parking areas
C. To evaluate controls and ensure compliance
D. To advertise bank products
C. To evaluate controls and ensure compliance
, Rationale: Internal audits assess whether banking controls, policies, and procedures are
functioning effectively and legally.
11. What is the main purpose of a savings account?
A. To purchase shares
B. To safely store money while earning interest
C. To avoid paying taxes
D. To apply for employment
B. To safely store money while earning interest
Rationale: Savings accounts help customers keep money secure while earning interest over time.
12. Which document is commonly required to open a bank account?
A. Grocery receipt
B. Identification document
C. Bus ticket
D. Library card
B. Identification document
Rationale: Banks require official identification to verify customer identity and comply with
regulations.
13. What is phishing?
A. A banking reward program
B. A cyberattack used to steal sensitive information
C. A legal tax process
D. A type of savings account
B. A cyberattack used to steal sensitive information
Rationale: Phishing scams trick people into revealing passwords, banking details, or
confidential information.
14. Why are strong passwords important in banking?
