Testing Challenges within the Banking & Financial Services Industry

Introduction

Every industry is faced with hurdles that organizations need to overcome in order to remain competitive. Some navigate stricter regulations. Others are faced with seasonal ebbs and flows. The Banking and Financial Services Industry is no different. Due to rapid technological advancements and increasing customer demands, the BFSI industry faces a myriad of challenges that affect various domains including management, personnel, and, of course, IT. This blog explores the key challenges present in the BFSI space and how these challenges impact software testing teams.

A Need for Speed

The need for fast innovation is felt across the BFSI industry. In the payment space, teams are seeing entirely new models and payment networks emerging in a faster rate than they’ve seen in the last 30 years. Things like mobile payments and ‘buy now, pay later’ models are rapidly evolving alongside consumer expectations.

Similarly, the consumer banking space is facing a similar need to remain quick and adaptable. The rise of neobanks and the shift to direct-to-consumer interfaces are pushing traditional banks to accelerate the deployment of new functionalities. Innovation and competition also play a key role behind the industry's need for faster IT project delivery.

There is also a push to provide more detailed and timely information in coherent interfaces within the investment banking space. Consumers and traders expect to have greater insights as well as the ability to do more complex trades from mobile devices. Those who can’t deliver on these demands could face losing out on existing and prospective customers.

A TTC Global client noted that they used to have, on average, over a year to take a customer-requested functionality and deploy it into production. That business model is no longer viable in today’s rapidly changing environment. Today, a customer who waits over a year for a new feature they requested might end up moving to a service provider who can meet their needs.

The pressure to innovate is felt at every level in BFSI. Testers are now tasked with evaluating the quality of rapidly developed functionalities, putting a premium on efficiency and software quality. Test automation becomes a crucial aspect needed to meet these accelerated timelines.

Diverse Tech Stack

When you’re talking about all the operations that need to be done within this industry, it becomes clear that not only is high performance computing needed; your teams will need a robust tech stack to manage the load. The tech stack you need to test in a BFSI space is massive, ranging from legacy mainframes to cutting-edge mobile technologies. At the same time, companies are:

• Rolling out more sophisticated actions to mobile devices
• Moving towards event driven architectures to settle transactions quickly
• Hunting for digital innovation they can bring to their existing customers
• Adapting to mergers, which can often increase the diversity of tech stacks to be supported

Testing teams are challenged with the complexity of validating these diverse tech stacks. Automation becomes critical for efficiently testing applications across various technologies. The ability to transition between different programming languages and technologies is critical for organizations to remain flexible in the face of upcoming shifts in operations.

Increased Integration

According to Bankrate, the average lifespan of a consumer bank account in the United States is over 16 years. Consumer tenure in other countries such as New Zealand also remains high. Maintaining these long-term customer relationships necessitates meeting customer demand. In order to do so, banks and financial institutions need to incorporate seamless integration between their systems.

Updating one system requires thorough testing to ensure compatibility with the other interconnected systems. This increases the complexity of testing, thus requiring a comprehensive approach to validate introduced functionalities and their downstream impact on integrated workflows. To further adopt to the industry’s growing digital-first approach, we need to shift from customer relationship management to exploring how software systems can identify new trends that may indicate a customer is at risk of churning and make apt suggestions for retention.

Response to External Events

External events can greatly affect industries in a variety of ways. These can be industry specific such as changes in interest rates, regulatory requirements, sanctions, and bans, but they can also include non-industry related events such as regional conflicts and pandemics.

While these shifts can have long lasting implications, consumers will likely still expect fast or even instantaneous responses. Testing strategies must be adaptable to these external events in order for organizations to continue operating efficiently. Mapping application functionality, calculating business risk, and linking automation to the functionality model are essential components of a responsive testing strategy.

Conclusion

In such a fast-paced landscape, software testing plays a pivotal role in ensuring the reliability and functionality of financial systems. The challenges commonly found within the BFSI sector underscore the importance of a holistic and adaptable testing approach. Automated software testing, testing partners, and maintaining a keen understanding of the industry's intricacies are essential for organizations to adapt and excel in the face of challenge. As the banking and financial services industry continues to innovate, the role of software testing will remain indispensable in safeguarding organizations' integrity and performance.