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Testing Banking Domain Apps: Complete guide to BFSI testing transformation

Jasmine Chokshi
October 4, 2019

The banking and financial sector is witnessing the full impact of digital transformation. Banking and financial apps also present some of the most complex software development and testing challenges.

Banking domain testing

Why banking applications are so complex and challenging? Here are some reasons.

  1. In addition, banking software deals with sensitive financial data so the software should be secure above all. Errors can be costly in more ways than one, so accuracy of software is another factor that matters.
  2. As a result of digital transformation initiatives, banking is evolving at a fast pace. There are multiple channels and various apps to serve the varying needs. For instance, wallets that serve the customers.
  3. Customer experience and expectation has evolved in line with the digitization of banking apps. They expect banking services to be available 24/7 with the same performance. Upgrades and patches therefore can’t impact the availability.
  4. The BFSI sector is also heavily regulated globally. Any changes in structures, regulations and laws impact the software as well.
  5. Banking systems need to be frequently upgraded and modernized as new technologies make their way. For instance, the use of data analytics, machine learning and big data processing is making a huge impact on the financial sector. The overall application and software need to be up to speed with these changes.

Here are a few characteristics of banking applications and software that make it unique:

  • Multitude of channels and devices
  • Serving the largest variety of customers
  • Real-time processes
  • 24/7 availability
  • Multitier functions to support a range of concurrent user sessions
  • Integration and Interoperability: Banking apps need to integrate with various other applications seamlessly
  • Security of transactions
  • Disaster Management

Testing Bank Applications: Why, how and what

Software testing has never been more critical to banking apps than now. Yet, banking software testing becomes more complicated because of the multiple layers of development and thousands of dependencies.

Regulatory compliance and data privacy are equally vital and testing becomes all the more challenging and complex due to the various security standards involved.

Banking and finance apps are the most common victims of hacking and fraudulent activities. Penetration testing therefore comprises a big chunk of the overall test plan.

Performance failures are a big concern for banking apps. It is important that the application and infrastructure are managed to handle the load, especially during peak usage. Performance testing Is required to track the application’s load and stress limits.

Since different modules of the app have to work cohesively, another area one needs to implement thoroughly is Integration Testing.

Typical testing phases for Banking Applications

The workflow and testing phases for banking applications may vary depending on the approach you use, Agile or waterfall. Altogether, the phases will include:

Requirement Analysis: Domain knowledge is essential for accurate gathering of requirements. In the Agile model, key stakeholders that include business analysts, developers and testers are involved in requirements gathering and documentation.

Review: The documented requirements need to be reviewed and verified to make sure that it doesn’t impact the workflow.

Database Testing: This is one of the most crucial aspects of bank application testing. It is carried out to ensure data integrity, data loading, migration, stored steps, functional validation and rule testing.

Integration Testing: As mentioned earlier, integration testing is needed to make sure all components work well together and are validated.

Functional Testing: This is where test activities such as test case preparation, test case review and test case preparation are carried out.

Security Testing: Security testing ensures that there are no security flaws in the software. The QA team needs to incorporate both negative and positive test scenarios such that one can break the system and report it, to make it fail proof.

Regression Testing: All releases, big and small need to be coupled with adequate regression testing to make sure that the new functionality hasn’t broken anything that was working. Regression testing is all the more important in banking apps due to the high dependency of customers on 24/7 availability.

Usability testing: Since banking apps serve a variety of customers over several devices, usability testing ensures that the app works for different user groups. This is typically performed by business users.

User Acceptance Testing: The goal of UAT is to ensure end user requirements are met in real world scenarios.

The Billion Dollars Challenge Facing Banks Overall Application Quality

As we can see, developing high quality, secure bank apps that meet the modern consumer’s expectations at various touchpoints takes a great deal of complex planning and execution. The role of testing and test management cannot be emphasized enough.

For many large banks, testing is an outsourced function or spread across globally distributed teams. Not all QA teams within the organization use the same set of tools and frameworks for project management, test automation, continuous integration etc.

In addition, with large number of releases and updates, project managers deal with vast amounts of test data. This causes several issues in managing tests effectively such as:

  • Duplication of efforts because of redundant test cases
  • Slowing down of cycles due to dead test cases
  • Huge test case backlogs
  • Poor analytics or visibility of test coverage, traceability and other valuable metrics
  • Inability to find the most high-risk bugs faster
  • Lack of integration among tools
  • Absence of a single platform to enable team collaboration

While competitive pressure is driving more innovation in fintech, banking and financial institutes are bogged down by age-old processes, legacy systems and solving everyday test management challenges. Data is often locked in legacy back-end systems, distributed across databases. There are often upstream and downstream dependencies between various systems. For example, dependencies between cards, payment processing, rewards loyalty etc. that make it difficult to extract the necessary data.

A survey by Censuswide for Five degrees recently found that banks are unable to meet consumer demand due to legacy IT and old processes.

With new technologies such as cloud and open APIs becoming mainstream, it is difficult for companies operating under the weight of less agile, legacy systems to compete. Relevant modernization, that is bringing ageing and inefficient systems up to speed is absolutely necessary.

Digital Transformation of Banks: addressing challenges in software quality and test management

Analyze the current state of legacy systems

It is not necessary that all old software is legacy and requires modernization. Assess all your systems in place from the quality and test management perspective. Are you getting enough coverage? Does it integrate with your set of DevOps tools well? Find out the need gaps and evaluate whether replacing the system with a modern tool will work best for your organization’s challenges.

Migration support

Select the modernization approach that works best for you to deliver the fastest value.

Migration from legacy software is often a huge concern for banks owing to the vast amounts of test assets that need to be migrated. Shortlist vendors and tools on the basis of their migration plan and support. Check online reviews for their test management, integration and support capabilities. Find out how best you can optimize your existing tools by integrating with their solution. Also, look for products that provide the choice of SaaS and on-premise solutions.

Choose the right tech stack

It is not just your test management or project management tool, but the entire ecosystem of technologies that needs to be future-ready, flexible and reliable. For instance, if you have adopted DevOps, then your technology stack should fully support pipeline orchestration and efficiency. Similarly, your test management tool must integrate well with task management tools such as Jira and CI server like Jenkins and Bamboo.

Support for test automation

Is your test automation up to speed? If you are using an automation framework, can you capture the execution results in your test suite? Teams practicing BDD must be able to author, store and sync features to and from Version Control Systems like SVN, Git, Bitbucket.

Support for both Agile and Waterfall methodologies

Your test management approach and tools must be flexible enough to provide support for both methodologies so that you can evolve at your own speed. Essentially, the test management tool must adapt to your organization’s processes.

Need for innovation, speed and quality

The digital transformation of the fintech sector and arrival of many new non-banking finance entrants to the scene has revolutionized traditional banking systems. Banking and financial institutions are undergoing a radical shift in their core competencies. A customer centric approach drives the need for innovation along with the speed and quality. Test strategies must be developed considering these factors and software testing must be rehauled at its core to ensure a smooth transformation journey. Selecting the right test management tool is half the battle won.

QMetry has broad expertise in serving clients in the BFSI sector. Speak to our product specialists to find out if we are the right fit for your bank’s test management requirements.

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