I want to publish some kind of a banking app to the App Store. I don't want to create a test user account on a backend, because that will cause a security hole. So I came with an idea to have one demo account in my app which does not connect to the backend but presents some test hardcoded data? Is it going to be okay for Apple review process?
As per apple rules & guidelines if you will submit App with demo data, sandbox data or any other test details which are used for temporary basis than they will reject your application.
In your case it looks like its a login based app. Than in that case you will have to provide demo account credentials to the apple review team for testing. Otherwise they will reject the app or may be ask for more detail by rejecting metadata.
For the security purpose you can keep that test user account secret & pass to the apple review team in Login info section. And once you get app approved you can remove that registration from the backend part.
Hope it will help.