Tenjin handles SWIFT message automation – MT & MX

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Payments are considered the backbone of banking transactions. It is the lifeline of Corporates / Retail customers for their day-to-day dealings with the Bank.   

Across assets, Liabilities, and internal fund transfers, transactions are confined within a bank. For payment transactions outside the Bank, there would be an additional leg of the transaction. It can be bilateral with another bank or multilateral where the concept of clearing settlement bank or correspondent bank will come into the picture.  

 For payments, there are two aspects,  

  • one is message format where details of the transaction amount, date of settlement,  transaction amount, date of settlement, initiating / beneficiary customer details, initiating bank/beneficiary bank details, remittance information etc., are conveyed.  
  • Another aspect is funds settlement between Initiating bank and the Beneficiary bank. Communication between the bank and the correspondent bank happens through a secured network. Both banks follow a pre-defined format for communication exchange that is decided either by the clearing settlement bank or the secure network.   

payment transaction will involve multiple parts of the bank, such as,  

  • Treasury for exchange rates, when the currency of transfer is not the same as a customer account currency.   
  • Liquidity ensures that the bank has sufficient funds in the clearing & settlement bank or correspondent bank – it is like a customer needs to have sufficient funds in his account before initiating a transaction. 

Apart from the debit customer’s account, a payment transaction will typically capture 

  • transfer currency,   
  • transfer amount,   
  • the name of the party & account details are referred to as beneficiary; 

The beneficiary should receive the transfer amount and information from the customer to the beneficiary, and then the regulator can capture the purpose of the payment. The payment processor will enrich the data, such as deciding the correspondent bank, name, and address of the ordering customer. 

Further steps – 

  •  Validate the transfer currency; if needed, fetch the exchange rate to decide the amount the customer needs for executing the transaction.  
  • Validate the transfer currency and decide on the correspondent bank.  

  • Cross-check for funds availability in the ordering customer account, collect the charges and do the accounting.  
  • Create the payment chain or routing to reach the beneficiary bank and the network through which the message(s) are sent.  
  • Format the payment message(s) in the appropriate formats and send the needed information to the screening system.  
  • After successful screening completion/compliance approvals, the message(s) will be pushed into the appropriate network. 

This completes one major part of the payment transaction.  

The payment message thus transmitted will be responded to by the beneficiary bank/correspondent bank after a period. The response received will be processed as an incoming message by the ordering bank. This is referred to as asynchronous processing indicating that the sending bank will not wait for an immediate response.  

The Payment message generated through the payment chain/network will reach the beneficiary’s bank; which will credit the beneficiary’s account and confirm the credit through a message or notification. Correspondent banks will pass the necessary accounting entries in their book and send a statement and/or notification through the payment network.  

The bank on receiving the credit notification from the beneficiary or based on the notification received from the correspondent bank will confirm to the ordering customer that the payment has been affected. 

This completes the full payment transaction. 

This payment transaction is reflected in the ordering bank’s books as an entry in the account of the correspondent bank/clearing & settlement bank. The ordering bank will receive the statement from the correspondent bank. The entries in both books will be matched for this bank’s use of a Reconciliation System. 

The payment transactions in the customer account are monitored as part of Anti-Money Laundering Monitoring with the customer’s overall transactional activities based on the compliance rules set by the bank as part of the AML System.   

Messages carrying payment transactions are to be validated both at receiving systems like CSM* or SWIFT or at beneficiary banks.  Due to the financial risks involved, participating Institutions validate  

  • the authenticity of the payment origin  
  • encryption/decryption (if stipulated) 
  • syntax control as pre-validation of an XML file (in case of MX messages), duplicate checks 
  • logical controls at Group Header and Payment Information Level 
  • receiving/sending acknowledgements for the payment messages sent/received 

  • handling functional/technical failures across the end-to-end flows within cut-off time and others 

While banks work with OEM IT vendors to ensure the above critical checkpoints, testing teams must ensure that all the scenarios in the end-to-end flow across all involved applications are tested thoroughly with seamless message flow and acknowledgements.    

There will be instances where rules/procedures of payment types are changed due to regulatory/operational perspectives in time.   During this time, change requests would be implemented by OEM companies.  Complete regression testing of existing functionalities, together with all interfacing applications, must be undertaken so that there is no break in any transactions when deployed in production.  To efficiently handle this, automation of existing flows must be ready as manual execution of regression test cases would be time-consuming, delaying the deployment of upgradation.   

Tenjin Enterprise is the Testing Automation Solution of Yethi with exciting features – 

Tenjin Test Automation Solution Abilities

Summary 

 Payment Systems are going through a sea change in technologies and transformations globally. Yethi and its flagship test automation solution, Tenjin product, is geared to navigate this sea of changes with customers, fintech and financial institutions with deep functional expertise and automation abilities across layers. Tenjin utilizes reusable test assets from our vast experience across payment systems. 

Write to us for a joint discussion in your Payments business areas. 

We will be happy to combine Tenjin with your business processes. 

Tenjin helps with Payment Systems Testing and Automation specifically! 

Write to us at info@Yethi.in for a demo and further automation into your Payments Solution Landscape. 

Do Banks Need Special Approaches to Manage and Test NRI Banking?

Every bank has specially curated services for their customers residing anywhere around the world. But why would an NRI need special financial services? The NRI (Non-Resident Indian), Person of Indian Origin (PIO) or Overseas Citizen of India (OCI) needs NRI accounts to allow a smooth flow of funds within India and overseas. With an NRI account, it is extremely convenient for account holders to access their funds and income from abroad. 

What is NRI banking?

The NRI account or NRI banking is a critical process that requires many financial regulations and has many obligations. Banks authorized under the Reserve Bank of India can open NRI accounts for Non-Resident Indians, Persons of Indian Origin (PIO), or Overseas Citizens of India (OCI). Banks provide various banking services to NRIs. NRI may receive funds from any foreign countries or within India. The money received from any foreign country can be deposited in the NRE account and money received within India must be routed through the NRO account only. The amount received in either of the accounts is taxable. The amount they may receive from primary income sources (jobs or business) or any other investment of NRI customers.

Different types of accounts that an NRI can open in Indian banks

The NRI Accounts are classified into three types, Non-Resident External (NRE) and Non-Resident Ordinary (NRO), and Foreign Currency Non-Resident Account (FCNR). Each of these accounts offers specific services tailored for its NRI account holders. It helps the account holder to manage their investments, remittance to their home country, payments, and more. The salient features of the different accounts make it easy for the Government and banks’ regulatory systems to track the inward and outward movement of money.  

NRE saving accounts – The NRE saving account is created to help people save their foreign income earned outside India. Indians residing in foreign countries can freely deposit money in their account. They can also enjoy the full repatriability of their money with the tax being waived off as of now in India. NRI family members living in India can access the account anytime and anywhere only either by Power of Attorney or a consent letter. A few of the banks do offer NRE accounts to marine officers as well as students pursuing careers abroad. 

The NRIs can open and maintain NRE Accounts with the income they earn from their employed country. The accounts must be denominated in Indian Rupees. An NRI can and can open a current, savings, recurring deposit account, or fixed deposit account and jointly maintain and operate the NRE account only with another NRE account holder. The deposit maintained in this account can only be from the money earned in foreign countries and not from India. An NRI can withdraw the saving in the country currency where the NRI resides. Hence, the amount may fluctuate based on the current currency exchange value.

The account holder can transfer the fund of one NRE account to another NRE or NRO without disruption. The principal and interest amounts are exempted from taxation, making the income from the NRE accounts a tax-free account. The NRE accounts allow the NRIs to invest in India. NRI customers however cannot deposit cash in Indian Rupee Currency in the NRE accounts, but they can withdraw the Cash in Indian currency. No cash in Indian currency can be deposited in the NRE Accounts.

NRO saving accounts – The NRO saving account is created to help people save their funds gathered from earnings in India. Indians residing in foreign countries can freely transfer money at competitive exchange rates to the NRO accounts, which the NRI family members or dependents living in India can also access through Power of Attorney or consent letters.

An NRI can open an NRO account with earnings arising from India. The source of income can be many like rent, pension, dividends, interest, and more. An NRI can deposit in Indian INR or other currency in an NRO account but can withdraw the amount only in INR. The NRO account can be managed or operated jointly by an Indian resident or an NRI. The interest accrued on the income in the NRO account falls under taxation. The main objective of the NRO account is to save the amount that the NRIs earn in India.

FCNR accounts – FCNR is a kind of fixed deposit account opened to deposit income earned overseas. The accounts are maintained in foreign currency. NRIs, a Person of Indian Origin (PIO) or Overseas Citizen of India (OCI) can deposit amounts in FCNR accounts. The amount in FCNR account can be deposited in currencies like US dollar (USD), Pound Sterling (GBP), Japanese Yen (JPY), Euro (EURO), Australian Dollar (AUD) & Canadian Dollar (CAD). In India, the Reserve Bank of India approves the currency in which the money is deposited in the FCNR account.

FCNR accounts are term deposit accounts instead savings accounts. Fixed Deposits (FD) are designated in INR currency popularly known as NRI FDs. The interest rates do not fluctuate throughout the tenure of the deposit. As deposits and withdrawals are made in foreign currencies, the rate of interest remains stable in FCNR accounts till maturity. The NRI account holders can jointly operate and maintain the FCNR account.

The tenure of maintaining an FCNR account can be in between 1 year to 5 years. The minimum period of opening an FCNR account is 1 year or above. If the term deposit account is pre-mature and closed within a year, the account holder will not be paid any interest amount. The principal and interest amounts are exempted from taxation as income from the FCNR account are tax-free. A roundabout of 360 days is considered one year for FCNR deposits.

Irrespective of the types of accounts NRIs hold in banks, there are many rules and regulations applicable for the NRI account holders to operate and manage their accounts in India from foreign countries. However, the applicable rules and regulations may vary from country to country for transferring the money and repatriating the amount.

Common issues faced by NRIs to invest or house their money in India

NRIs face many issues and complications whether they wish to open an account and invest in Indian banks. A few of the common issues are mentioned below, 

  • Investing in the Indian market for the NRIs is complicated as an NRI must undergo stringent regulations while investing in the Indian market. There are many restrictions applied to NRIs investing in the Indian market. Let us take an example to understand the limitations fully. While accepting investments from US-based NRIs, only a few banks acknowledge investments from NRIs living in the US. Let us consider a US-based NRI willing to invest in Mutual Fund in India; they must sign many formalities (paperwork and compliance) to gain investments from the American and Canadian NRIs. It is after the Government implemented Foreign Account Tax Compliance Act (FACTA) over the NRI investments. On the contrary, the NRIs residing in other countries must update their residential status by submitting necessary documents.
  • NRIs also face two common issues avoiding tax or double taxation. If an NRI earns income in India that exceeds the specified amount through interest from the NRO accounts, mutual funds, equity shares, domestic fixed deposits, rents, capital gains, etc., they must file income tax. Vice versa, an NRI might end up paying double taxes against their investment in some countries. However, India has signed a treaty with over 90 countries known as the Double Taxation Avoidance Agreement (DTAA) to avoid the issue of paying double taxes. NRIs can pay taxes in either of the countries – a country they currently reside in or in India, where they have earned their capital gain.
  • NRIs most commonly invest in traditional fixed return assets in India, like fixed deposits in banks, gold, real estate, etc. There are many regulations, transactional compliance, limited information on the Indian market, market volatility, applicable taxes and more that restrict NRIs and refrain them from investing in other assets. However, NRIs have multiple investment options that can offer them high returns in investments, like mutual funds, IPOs, direct equity, ETFs, and more.
  • Millennials and Gen-Zs NRIs are driven technologically. They wish to invest in digital assets like NFTs and cryptocurrencies. However, the market volatility and ambiguity and the apprehension regarding their legality in the Indian market do not allow the NRIs to explore the possibilities and put their financial portfolio at risk. 

Why do banks need special approaches to manage NRI banking?

Security, flexibility, accessibility, usability, and functionality are the main aspects of managing the NRI accounts. For a complicated process like NRI banking, validating the touchpoints are essential. NRI banking involves a massive volume of critical transactions. Hence, banks must protect the NRI accounts from Anti-money Laundering and cyber threats, maintain system compliance, follow strict regulations, and more.

Banks nominate Relationship Managers / Officers to focus more on NRI clients. They treat them with special attention by bundling services like Portfolio Management Services, Handling Execution of Wills / Power of Attorneys, Taxation etc., and linking these special services with the deposit accounts of the NRI clients.

The banks that offer specially tailored services to their customers are less in number. A few that offer all the banking services may not have branches in all the countries. Sometimes the representatives would not be able to guide the customers adequately. These create roadblocks for the NRIs to bank conveniently, efficiently, and safely. Banks must adopt special approaches to ensure they do not disappoint their NRI customers. Let us break down the approach banks must take to offer the services anticipated by the customers from their banking partners. We will further explore why the customers need these approaches.

  1. Digital experience – An NRI needs many online banking and financial transactions like new bank account opening, investments, remittance, loan applications, etc. Banks can tailor digital services and offer strong digital banking support to the NRI customers based on their specific requirements. Since NRI customers live in countries that may be in different time zone and have many constraints, NRIs require 24/7/365 digital support. They must be able to access the banking services without any disruption. Hence, offering an outstanding digital experience becomes necessary for managing NRI banking.
  2. System support – An NRI may send transaction requests anytime. It is hard to determine the traffic of these requests. Sometimes it may arrive in bulk, and other days it can be significantly less in numbers. The banks’ systems should be up and running without any performance and functionality errors to ensure that the NRI customers do not face any inconvenience in transactions due to system errors.
  3. Security measures – An NRI may face multiple security breaches owing to the massive number of transactions. NRI accounts are highly vulnerable to a security threat and come under direct cyber-attack. The NRI banking requires special security measures to prevent cyber-attack, anti-money laundering, and other security threats. NRIs tend to have confidence in banks that take extra care to ensure platform security. 
  4. Grievance redressal – NRI customers require a specialized grievance redressal cell to resolve many technical, system, and process errors that may arise during a transaction. Banks must efficiently and promptly resolve issues; so that the customers do not face any significant loss because of delays in addressing the errors. Also, the errors must not affect the transaction flow.
  5. Customer support – NRI customers require outstanding customer support. Banks cannot delay responding to customer requests as it may disappoint them. If there is any delay in response, customers will not think twice about discontinuing the services. Banks must manage their NRI accounts by addressing customer requests quickly.

Testing approach for NRI banking

Security – Security is a vital factor when it comes to testing the NRI banking process. As cited early in the document that NRI accounts are a mesh of critical transactions, which requires thorough testing to ensure that the remittance and other transactions are carried out without violating the secured account information of NRI customers. It puts banks in a bad light if banks fail to maintain sensitive account information for both them and the customers.

Functionality – Banks must handle multiple requests from NRI customers. The entire customer request and system entry require special attention and testing practice so that banks can smoothly execute and validate test results. Banks must enter the details like onboarding customers, feeding the information in their systems, converting to foreign currency on repatriation, calculating interest (360 days for FCNR), and handling the maturity phase. Functional testing becomes an essential part of ensuring that the system allows the entry of multiple information at the same time.

Performance – Not all NRI customers will send transaction and remittance requests at the same time. Hence, the traffic for NRI customers will vary from time to time. Sometimes there will be a bulk of requests sent by the NRI customers, and at times the requests will be fewer. The performance testing is crucial to validate the performance load on the system with multiple requests at a specific time. It confirms the system’s sustainability to withstand the performance load on a busy day.

Accessibility – Accessibility testing is critical to ensure that all NRI customers and their dependents of all ages, and physical or cognitive conditions can access the banking services without any inconvenience. NRI customers demand user-friendly applications, platforms, and solutions that offer ease of use.

Usability – Difficulty in using the application can be one of the reasons that NRI customers might discontinue using the applications. Users require interactive applications that work efficiently and meet all the user requirements. NRI banking must undergo thorough usability testing to check the user-friendliness, efficiency, and accuracy of the user platform.

Digital – The NRI customers require digital platforms for online banking, remittance, lending, and more. Banks are extending round-the-clock digital banking support to their NRI customers. Hence, digital testing is an essential factor for NRI banking. The quality performance, security, and functionality determine that the online transactions and other banking processes are carried out safely without any errors or disruptions.

User acceptance – Banks build applications keeping users in their minds. User acceptance is based on how users use the service and applications offered by the banks. User acceptance testing confirms that the NRIs can use the applications conveniently.

System Integration – Banks build their systems with adequate and applicable features and functionalities. However, there are frequent changes in the application features that can create issues if banks fail to test them on time. System integration testing helps bank test their application to ensure that all their system integration points are functioning without errors. Banks want to ensure that their NRI customers receive the apt services by addressing all customer requests without delay.

Conclusion

NRI banking is a little sensitive area of service because of its high volatility in compliance and vulnerability in maintaining security. Banks must be extra vigilant while catering to their NRI customer. NRI customers are maximum susceptible to cyber-attacks. There are multiple guidelines that banks and their customers must follow while investing and withdrawing the amount entirely to their current residing country. The Government imposes multiple rules on customers residing in countries under strict scrutiny. Banks have a very different approach while dealing with their NRI customers and must be extra vigilant towards managing and testing NRI platforms.

Yethi’s testing experience with NRI banking

Yethi has executed several transformational, business-as-usual, and upgrade projects across multiple services modules and platforms. We have tested numerous applications, including core banking solutions, channels, lending, payments, trade & treasury, etc.

Our 5th generation robotic test automation solution, Tenjin, is easy to integrate with all leading platforms. It reduces your testing time to 45% and enhances the quality of financial and banking software.

Ongoing Innovation in Retail Banking

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The banking industry has been transitioning for more than a decade. Pandemic might have put human life at a standstill, but it has spurred innovation even more. Innovation is constant, and whatever has been brewing and were supposed to be out in upcoming years have made its appearance even stronger.

The financial and banking sectors have taken enormous risks out of bare necessity to move past the remote working environment and release innovative financial products in the market to meet customer expectations. The digital transformation is accelerated in banks and financial institutions based on customer requirements.

Organizations are using different tools that are readily available for building new digital platforms but were never used before. Even though this unprecedented situation has accelerated the growth of the digital platform, still some organizations feel that they are far behind in innovation and digital transformation. To overcome the challenge of preventing economic depression owing to the prevailing circumstances, the financial and banking sectors are more drawn toward creating a stronger foundation of digital transformation.

In the following years, the economic impact on the banking industry is probably vague and unpredictable. But the role that innovation is likely to play and transpire the digital transactions cannot be ruled out. Hence, it is definite to keep investing in creating an innovative product range to meet customer expectations or even exceed them.

Undoubtedly, the pandemic situation has provided a threat to the industry. But it has also provided an opportunity to invent and improve technologies and help organizations realize their potential in terms of digital growth. It will allow the financial industry to cater to its customer requirements even during hard times.

Fear of the spread of Covid has restricted all contact. Hence, the contactless or no-contact operation is urging banks and financial institutions to innovate transactions solution across key business areas. Following are the innovations that the financial and banking sectors are focusing on currently and will continue to do so going forward.

Innovations for contactless transactions

With significantly reduced footfall in the banks, personal banking is now elevated to digital banking encourages hassle-free and contactless transactions across all digital platforms. With fewer in-branch operational activities, consumers no longer have to visit the branch to meet their needs. During a time of dire necessity, financial institutions unleashed their full potential to win their customer’s confidence.

Digital customer onboarding The innovative digital customer onboarding process enables you to register your customers online over an inventive digital platform.

Video KYC Video KYC is an innovative technique where the customer’s documents are validated and verified through a mobile video conversation between the banker and customers.

Contactless payments – With a new norm of no-contact or contactless being the practice, consumers are opting to minimize physical contact. Using facial and voice recognition customers are using payments, ATMs, and business correspondent-enabled banking transactions.

Virtual customer service – Not just payments and transactions, a bank needs to address other requirements and complaints of their clients. Enterprises are now incorporating enhanced bots with their service websites. Contact centres are virtualized through cloud-based systems.

Redefine banking experience With limited human and physical interaction, the banks are further adding value to their services. There is a significant emphasis on technologies such as virtual and augmented reality.

Technologies that enable remote working

Improving Employee Access – Since the “work-from-home” option is unlikely to end anytime soon, financial institutions are vying for productivity enhancement. To standardize the workforce industries are replicating office-like environments by implementing robust, distributed, and secured setup for uninterrupted operations. A cloud-based solution is flexible enough to track the volatility of financial transactions.

Enhancing Employee Productivity – The older tools may be obsolete when it comes to catering to the need of employees during this tiring time. Understanding the situation, organizations are implementing AI-based productivity enhancement tools to predict human behaviour, track performance, and identify development areas. Further, the organizations are introducing learning and training programmes remotely to improve their employee productivity, they are reaping maximum benefits from AR and VR technology.

 Technologies to track employees’ physical and psychological well-being

There is no doubt that the pandemic had created quite a stir, taking a toll on the physical, emotional, and psychological health of people. To maintain the balance, organizations took corrective and preventive measures such as no-contact attendance, monitoring the temperature of employees and video-based conference meetings. Employees also opted for virtual medical assistance to ensure physical and psychological well-being. The trend proved successful and likely to continue for the years to come.

Technologies to reclaim economic growth

The current condition retarded economic growth and severely affected a few key business areas. With the help of technical innovations, financial institutions are making all possible efforts to retrieve from an economic downturn and offer services and solutions to their customers.

Customized Financial Product – The years 2020 & 2021 have exposed lending and banking services to business uncertainty and risk. The retail banks have customized solutions to meet customer needs. Customized products allowed organizations to identify solutions and monitor risk.

Monitoring and Evaluating Assets – The travel restriction posed challenges to evaluating and monitoring assets. Organizations used IoT-based systems to evaluate assets remotely. With this solution, financial institutions could evaluate and monitor products such as trade and lease financing, asset maintenance financing, and manufacturing and infrastructure financing.

Innovative Risk Assessment – The concurrent situation has led to business uncertainties. Calculating risk based on the traditional form of obtaining data may no longer be reliable. Financial institutions are relying on AI & ML -enabled models, which could help in creating an early warning system to monitor risk. Risk assessment of customer data through this technique enabled the organizations to understand customers’ creditworthiness.

Transaction Exchange – By integrating APIs of one financial institution with another, organizations could offer supply chain financing, marketplace lending, and POS-based lending products to their partners. It improved underwriting, pricing, and collections by tapping into the cash inflow of small and medium enterprises.

Changes in Retail Banking

  1. Innovations were moving at a slower pace, but the sudden outbreak of the global pandemic caught many industries off-guard
  2. Before the situation, many organizations were still holding onto traditional ways of catering to their customer requirements
  3. In-house and personal banking was the standard operations for many retail banks until they discovered that digital platforms can be an option

How did the retail banks deal with the changes?

  • Speeding up digital innovation – There were several digital innovations, which were lying in the pipeline to be released in upcoming years. Enterprises were already investing in the technologies in hope that they would bear fruits in the future. The challenge has pre-ponded the release, speeding up the digital innovations. Customers are relying more on digital banking and contactless interaction, which is reducing the footfall in the branches. Smart banking solutions such as video KYC and virtual banking have gained prominence now.
  • Reorganizing branch banking strategy – During 2020 & 2021, some of the banks had to decide on closing a few of their branches. Before Covid, banks relied on branch banking. They had greater dependencies on branch banking, which were reduced during the pandemic situation. Bank branches shutting down at a faster rate across the world has pushed decision-makers to reorganize their branch banking strategies.
  • Reforming customer services – Banks need to cater to their customer requirements, with or without limits. Before the critical time, customers relied more on in-branch banking. With lockdown being imposed globally and restrictions in the movement have led people to depend more on contactless transactions, giving a boost to digitalization. Digitalization allowed the organizations to facilitate no-contact banking for their customers.
  • Revisiting operating models – Banking operations used to heavily rely on manual effort. Driven by the current scenario, the financial sector is steadily moving towards digitalization. To address customer requirements, banking sectors identified opportunities. They simplified the banking operation process by automating the process and lowering operating expenses. Banks also introduced digital solutions to monitor and manage the remotely working workforce.

Initiatives taken by banks during the critical time and continued thereafter

There was a tremendous impact on financial growth, globally. To bounce back from this financial debacle, banks needed to consider short-term as well as long-term strategies. For banks had to yield profitable growth and had to focus on long-term strategies. Below are some of the initiatives that the banks are taking to ensure their financial stability.

  1. Cost optimization

Cost optimizing ensures growth and sustainability. To prevent further financial loss during the challenging time, the organization planned methodically to adapt to cost-cutting measures and took bold steps towards cost reformation. However, several complexities arise during the tedious time, and the effect was much more adverse than anticipated. The same methods that worked during other times did not work during this time.

In 2020 & 2021, 77% of the organizations implemented cost containment as a best business practice of maintaining expense levels by preventing unnecessary spending. It helped in reducing expenses and improving profitability without risking long-term damage to the company. 65% of the companies cancelled planned investments, 48% changed their financial plans, while 5% refrain from taking any financial actions because of restrictions. 26% of the companies changed their merger and acquisition strategy, and 40% adjusted guidance.

  • Re-designing the business continuity process

With social distancing, banks needed more innovative technologies to ensure smooth services for customers. The banking and financial sectors have various touchpoints, branches, support operations, ATMs, call centres and more. The criticalities of this situation compelled BFSI sectors to manage their touchpoints while adhering to social distancing guidelines. However, there was still a need to control the spread of the pandemic. This facilitated banks to adopt and deploy new technologies. The retail banks are developing and implementing new SOPs to ease in-branch and remote (digital) banking operations.

Branches must serve their customers while ensuring social distancing, but surely there are challenges in the focus business areas. Organizations are initiated the following ways to take care of their customer needs, without affecting their business flow.

  • Reducing branch and ATM footfall by encouraging the use of mobile banking
  • Cash management and technology support minimized ATM downtimes
  • Operations promoting digital platforms and transactions to the customers
  • Bank operation teams are using bots, and IVR (interactive voice response) to address customer queries related to loan moratorium, charges, product features, credit cards and branch appointments
  • Setting up goals to increase volumes and adjust staffing models
  • Redefining SOPs and service-level agreements (SLAs) for smooth internal operations
  • Adopting technologies which remained unutilized for long
  • Distributing workloads across operational sites
  • Digital transformation

As digital platforms evolved, organizations embraced digitalization to allow contactless sales, services and customer-employee, employer-employee interactions and more.

The journey of digital transformation may have started a few years ago, but the Covid crisis has accelerated the entire process. Digital transformation is not just handling the challenge, but it is likely to play a major role during post-Covid recovery. With digitalization being felt everywhere, both urban and rural part is slowly gaining access to data as well as gaining high mobile penetration. To cater to their customers remotely or in-branch, banks are creating new digital solutions to enable digital banking for them.

  • Banks are now leveraging artificial intelligence (AI), including natural language processing and emotional recognition capabilities across various customer touchpoint
  • Driving salesforce digitally to generate sales within the work-from-home option
  • Identifying potential FinTech partners in various categories such as payments, onboarding, credit underwriting and collections, and partnering with them quickly to enable contactless services
  • Investing a high share in the digitalization of the marketing budget
  • Applying digital transformation to improve customer experience and encouraging remote collaborative working
  • Improving data and cybersecurity measures, which are the principal need of digital transformation for customers and employees

  • Productivity
Ideally in a crisis like the current one, there could be a possibility that the organization might have to compromise on employee productivity. Organizations need a better crisis-management system to manage the concurrent situation. Hence organizations created innovative solutions, one such solution is digital transformation across all key operational and business areas. Banks are looking for new initiatives to drive the workforce and enhance productivity during this Pandemic. A few of these initiatives are mentioned below.
  • To focus more on digital and automated options to develop capabilities
  • Strictly monitoring lead management system to reduce effort leakage
  • Taking advantage of data analytics support to boost productivity
  • Defining workflows by activities by re-designing business process
  • To cater to unconventional business demands, organizations utilized workflow management tools
  • To define the Key Result Areas (KRA) and Key Performance Indicators (KPI) for ownership and responsibility of the workload, organizations are using performance monitoring tools
  • To improve sales and services amidst this pandemic and its restrictions, organizations deployed digital tools for employees to access
  • Following the strict SLAs, enterprises applied ring-fencing to review the scope of segregating non-essential services and outsourcing them to vendors
  • To further enhance the skills of their employees, enterprises designed online training modules
  • Handling online communication with all stakeholders even during the ongoing crisis

  • Asset-lite operating model

The fixed costs can be reduced by shifting to an asset-lite model. With a larger focus on digital platforms and remote working, the enterprises function without disrupting the business and services.

  • Making the customer-employee interaction easy with the right digital assets
  • Providing support for the workforce working remotely
  • Analyzing different specialized services and non-value services and accordingly outsourcing them
  • It also helped in utilizing footprint and optimizing real estate  

Adopting an asset-lite operating model lowers recurring fixed costs like rentals, lower support, and maintenance costs, direct connection with customers, higher utilization of self-service platforms and easier compliance with standards/regulations.

  • Planning business strategies

Businesses had to bounce back from the economical setback post-Covid. It was even more challenging to keep up during this crisis. Banks cut down the expenses on non-essential parts that no longer serve them. They planned different approaches due to their low lending capabilities, low-interest income, and increase stressed assets. Banks’ approaches and initiatives are different now. A few of those initiatives are as mentioned below:

  • Changing business models based on customers’ financial needs, products, and channels as well as adapting and analyzing new customer requirements
  • Customizing services by ring-fencing for prospective customers
  • Building brand image to gain customer loyalty
  • Considering wider requirements and scenarios to build a resilience plan
  • Building strategies around new products, services, and channels to capture new market segments
  • Assessing intra-industry collaborations for sales and services

Innovation in Quality Assurance

Quality Assurance is an inseparable aspect of the banking and financial industry. Enterprises decided to innovate in testing to speed up the process. Currently, the testing process in banks and financial institutions follows DevOps – Agile methodologies. They have included continuous testing along with continuous integration and continuous deployment.

The financial and the banking sector shifts to digital quality assurance with a high emphasis on automating the testing process wherever possible and holds applicable to accelerate their digital transformation journey. Banks are confidently adopting the open-source testing platform and AI-based testing to speed up the time to market and reduce the cost and effort. AI components focus on advanced test automation that saves time and enhances accuracy in the digital testing process. It is a self-healing automation process that produces more reliable outcomes. It helps in writing the test scripts and analyzing the large datasets faster. AI-based testing tools minimize future defects in applications by predicting instead of detecting them.

Enterprises are likely to adapt to both offshore and onsite testing models based on their specific requirements. If an organization can set up an in-house testing architecture to execute the testing projects, an onsite testing model would be advisable for them. However, if they are reluctant to invest in in-house testing, they can opt for offshore testing models. Whether offshore or onsite, both can be equally beneficial for a bank and financial institutions if the testing partner has the competency to execute end-to-end testing with expected results.  

Conclusion –

Yethi is a niche QA services provider with years of experience delivering high-quality testing projects. We have worked with 100+ clients across 22+ countries and executed end-to-end testing services across all the major core banking applications with functional areas like core banking, payments, lending, and more. Our quality assurance services include functional testing (user acceptance, functional acceptance, system integrationregression, UI/UX), non-functional testing (usability, performancesecuritydata migration), and testing advisory services.

Our testing centre of excellence is a team of highly experienced testing & domain specialists who understand the processes and technologies involved in digital projects & quickly scale capacity to meet the needs of your business. We have a test repository of 850K+ reusable assets built with highly probable test cases and scenarios in the financial and banking sector.

Our 5th generation robotic codeless test automation tool, Tenjin, is built with intuitive features and supports our QA services. It is a fast and scalable test automation platform and works flawlessly across multiple applications to provide accurate test results.

How did banks strengthen their digital transformation & business continuity with evolving opportunities during a pandemic?

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The global pandemic (2020-2021) had led to unanticipated issues such as economic crisis and credit risk. The upcoming years looked uncertain while facing a critical time. To protect from the economic fallout, the leading business entrepreneurs focused on finding out possible solutions that they thought would help them in stabilizing business continuity and serving their customers better.

One of the Gartner’s Business Continuity Survey reveals that as less as 12 per cent of organizations were prepared to combat the effect of a deadly catastrophe like coronavirus. Amidst the threat of spreading COVID-19, the leading financial institutions considered evaluating their business continuity plans and pandemic planning initiatives to ensure they put safety and efficiency first.

Banking and financial institutions considered agile methodology to adapt to the changing global scenario. The unforeseen event urged the BFSI sectors to reflect on their fundamental practices and how prepared were they for the future. The impact of the pandemic was so widespread that banks faced a weak investment return leading to future credit risks and economic uncertainties. Reportedly, the European banks collectively have experienced an estimated credit loss of an average of €700m in Q1 2020. Meanwhile, in the US three popular banks informed that they noticed a significant credit loss of $25b in Q2 2020.

Current Trend and Opportunities

To prevent the pitfall and evolve from this economic crisis, banks seized available opportunities and prepared their next business module. This catastrophe has urged banks to re-evaluate and analyze their core and non-core assets. Under this scenario, 60% of the banks considered the divestment option, a plan to divest in the next 12 months.

The possibility is likely to play a massive role in understanding the type of organizations banks would like to connect with in the future and how conveniently they can transform their existing process. A growing interest in digitalization is driving banks to adopt digital banking products and solutions to cater to customer requirements. They are taking steps to boost their digital transformation plans.

With a growing threat during a pandemic and different phases of the lockdown being imposed everywhere, financial institutions had adopted remote working policies. It provided an opportunity for the business leaders to reconsider working remotely, operating in the long-term, and consider the monetary impact this approach could have.

This situation enabled many banks to understand their resilience and capabilities. They also reconsidered their cost transformation programs to move in tune with the new challenges of this crisis. The future from here on looks promising and inspiring.

From the online purchase of grocery items to electronic goods, banking and financial institutions, companies introduced promotions, special services, and reward points to re-establish their position in the market. The customers’ purchase behavior was requirement-based, as a product was bought and sold based on bare necessity.

Customers were driven more by emotion during the crisis. Hence, for organizations, brand messaging, tone and purpose became extremely important while connecting with their customers at an emotional level. It helped in establishing customer brand loyalty. Customer purchase behavior depends on four principles, as stated below:

  • As customers remain indecisive, empathy and commitment become two ways to win their trust. During the pandemic, consumers reacted positively to inspiring content that highlighted social, financial, and other real-life aspects.
  • Brands should keep informing their customers about the crisis, how to protect themselves and change in the situation. Customers are likely to trust brands that provide reliable and accurate information about the current situation.
  • Engaging and connecting your customers by facilitating and extending social support are assured ways of improving brand loyalty. Social engagement with customer support and responding instantly during this pandemic have helped build brand loyalty.
  • Offering new schemes, promotions, and offers helps your brands to evolve through endorsement. These efforts have an impact on your customers.

Digital Transformation

Digital banking solutions, which have been brewing for a long time, have accelerated during this unprecedented time. This pandemic situation profoundly changed the behavior of retail and corporate banking clients and facilitated the use of digital banking.

A recent survey done by Ernst and Young, reveals that 62% of consumers said they would use less cash in the future, while 59% will opt for contactless payments. The use of digital services and products propelled more expansion when some of the bank branches were closed, and in response, banks accelerated digital and technology transformation programs.

The small and mid-size companies started adopting digital solutions faster than anticipated. There was an increase of new digital accounts by 2.4 times in the first quarter of 2020 as compared to the first quarter of 2019, and a 49% rise in SME digital loan applications in 2020 as compared to 30% in 2019, in one of the Singapore-based banks.

The concurrent situation has led to massive economic uncertainty, and there is a requirement for the bank to endure this sudden disruption. With a low margin, banks opted for digital tools and focused on sustainable digital enablement that helped them save cost and time. Their motto was, “Grow your business with digital innovations to live up to your customer’s expectations”.

When assessing customers’ requirements, it was observed that a combination of UI and UX of a digital platform contributed to customer satisfaction and experience. Since banking and financial institutions were turning their services online, they needed a platform that could improve the appeal and undisrupted performance.

The following instance supports the claim of how banking is relying on digital and online platforms. In April 2020, Lloyds Banking Group decided to provide a tablet to their 2,000 customers over the age of 70. The objective was to provide training and support to help them access online banking. As banks are now adopting the best digital practices and customer-centric solutions, they form a well-connected digital ecosystem and unique value propositions for their clients. The whole objective shifts to serving their customers better through an outstanding and uninterrupted online banking experience.

Banking has been evolving even before the pandemic swept the entire world. Based on customer requirements and expectations, banks are compelled to leverage digital channels, accounts payments or transfers and online wallets. To avoid the risk of spreading the infection, consumers opted for cashless payments during this pandemic situation. Consumers who did not consider online payment and transactions as options were encouraged to migrate to a digital platform. Since many consumers were not fully familiar with the digital platform, banks have taken it upon them to educate their customers for an outstanding experience.

As the cashless transaction became the new reality of the ongoing situation, banking and financial sectors had to speed up their digital innovation process in response to customer needs by leveraging cross-channel, customer-centric metrics and tracking the success of digital banking. To re-align sales, reduce operational costs, and offer excellent customer experience, data and analytics, AI and automation played a significant role.

A Cost-effective Managed Services

A well-panned managed service can offer operational flexibility and ensure uninterrupted business-continuity plans against unanticipated challenges during the global crisis. With the pace at which the market situation changed, the banks and financial institutions could not afford to hold back the digital revolution for long. Organizations realized that if they suspend their online operational transformation, they will suffer business loss. They understood the competitive edge the change would bring and hence started managing the costs more carefully.

A well-managed service allowed the banks to reduce operating expenses for the long term, and the sudden outburst gave a reason to the bank to adopt managed services. Managed services helped banks to formulate a strong business continuity plan. It is during the time of crisis that managed services helped the banks to maintain the system stability.

The financial instability during this challenging time urged banks to develop strategies to encourage their customer to move online and prove their operational flexibility. With this rapid digital growth, banks were compelled to invest in security, virtual collaboration and cloud infrastructure, analytics, artificial intelligence, and automation. The banks and financial institutions were quick to adopt digital transformation. And the one who did could recover from the economic setback and establish a strong foothold.

Since banking operations largely depend on customer behavior and satisfaction, the banks must face and overcome the challenges of maintaining their standard of customer services, while mitigating operational hurdles.

Current Contact Centers

Digital and mobile banking witnessed a sharp rise during this critical situation, along with the voice channel to serve consumers well. Despite the fully functional digital operation, a few of the banks were operating from branches in different locations. It proved that even if we were relying on a digital platform, we still needed human interventions. We realized the importance of both during a crisis like the current one. AI-driven technology replaced this to achieve the objective. AI could smartly detect the call intention and provide real-time data to the users. This technology helped in reducing call time, and improved efficiency, and customer satisfaction.

Rise of Open Banking Solutions

The situation gave rise to open banking solutions as there has been an 832% increase in open banking during the global lockdown. Banks took more interest in the open banking payment initiative to gain more understanding of their financial situation. Consequently, more and more banks used the opportunity and invested in open banking solutions. The European financial institutions witnessed a steady increase, and globally the organizations were eager to have a different perspective. They did not mind sharing the information on an open platform. A recent report revealed that there was a rise of 20-29% of investments in open banking services for two-thirds of the respondents.

Partnering with FinTech

Banks were simultaneously looking to speed up the digital innovations during the prevailing global situation when the economies across the globe were slowing down. Also, during this pandemic situation, many venture capitalists were restricted from investing in FinTechs. Hence, partnering with FinTech in this situation proved to be economically and mutually beneficial.

Many governments slowly eased rules and regulations in FinTech companies to encourage the growth of innovations and balance out economic disruption. It came as a relief against the long-standing rules, which were once imposed on them.

The current situation provided opportunities for FinTechs to strike a balance between digital transformation while creating a secure financial backbone. As banks and FinTechs together collaborated, it helped them to bridge the funding gap.

As banks were in the earlier stages of digital transformation, partnering with FinTech companies proved to be helpful in terms of improving technological expertise. Banks in collaboration with FinTechs could develop platforms for financial inclusion, analyze transactions and other data for deep insights, capability development and deploy automation for compliance.

Mortgage Refinancing & Payment Deferral

The crisis raised lots of dependability on banks as to how they are addressing their customer’s issues. Due to low-interest rates, there was a steady rise in mortgage refinancing in April and May 2020, resulting in high loan volumes for lenders. As the whole world was suffering because of layoffs, and pay cuts, the homeowners found it to be challenging to pay their instalments on time. This catastrophe has left many customers asking for mortgage deferrals.

Many banks waived fees, increased credit card limits, and granted mortgage payment holidays in response to customers’ inability to keep up the monthly mortgage payments. They made a few adjustments with the short-term and long-term financial changes. Banks provided tailored solutions based on the customer’s requirements by leveraging machine learning, AI and analytics and driving improved engagement.

Managing System Performance and Unexpected Risks through QA

The customers looked for additional support during this crisis in terms of credit facilities from the banks globally. Banks had to be prepared for the upcoming risks and take measures to keep their business and customers protected from the financial debacle, as default and bad loan cases were expected to rise in numbers.

Banks had to build a powerful fraud and risk management and strengthen their portfolio using their analytical capabilities. It helped them to generate useful insights, improve the operational process, and decide quickly on process-related matters. The impact of the global setback urged the banks to focus, assess and review their stress testing models. Since banks actively took steps towards digital transformation, they had to ensure that their systems had seamless performance, system integration and customer acceptance of their digital platform.

Efficient software and algorithm were needed to detect fraud and reevaluate the risk modelling. It allowed banks to calculate pricing, and evaluate and measure the credit risk of borrowers. Banks needed real-time data and an advanced risk calculator, as the economic impact during this time turned a large amount of data unreliable. Banks had to develop advanced analytical capabilities to filter data accurately and spot anomalies quickly.

Since the outbreak of the global pandemic, there has been a significant rise in criminal activities, increasing the threat of money laundering. Banks will also have to strengthen their KYC and Anti-money Laundering (AML) programs. It helped the banks and financial sectors to manage risks and keep pace with changing regulatory scenarios.  

Journey Ahead from Here

The rising concern and uncertainty of this pandemic situation have made the global banks sort out multiple ways to address their customer requirements. The customers require extensive support and flexible services, and interaction. As the situation demanded high technical upliftment, banks were likely to adopt the followings that allowed and helped them to meet their customer expectations. 

  • Accelerated digitalization efforts
  • Cloud migration
  • Intelligent workflow management
  • Partnerships with the BFS sector and FinTechs
  • Embedding security and governance across operations
  • Advanced risk modelling

The current condition posed multiple challenges and compelled banks and financial institutions to invest more in the digital future. They are now improving their operations by leveraging innovative technologies and continuing to inspire other industries that have not reached digital excellence. The financial sector is on the right track to reap the benefits and enjoy the success of its cost transformation programs for the future.

Importance of test code quality in continuous testing of financial applications

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We cannot overlook the massive digital transformation occurring around us. The growing technology has already set the pace, and the pandemic situation has triggered digital advancement. The impact of this transformation is felt more strongly in a few of the sectors compared to others. Banking and the financial sectors are one of them.

Banking and financial operations are complicated, with multiple users and touchpoints. It adds to the complication more when you have complex software with heavily loaded features. Organizations cannot afford to lose their businesses and loyal customers due to technical glitches arising from the lack of quality check-ups of critical software. Hence, quality assurance (QA) of all financial applications becomes necessary. To determine the overall quality of the software, the software developers must ensure that they maintain the high quality of the test codes.

The current trend of financial applications

We have come a long way from traditional banking, where people had to form a queue for each transaction. The current age of banking follows a digital trend, which means that from money transfers to loan disbursement and transactions at the merchant outlet, pretty much everything is done using software and applications. It creates an immense load on application functionality and performance due to high user dependability and usage. It adds more to the burden when testers and developers have to ensure the application’s security. We cannot put aside user demand for innovative apps. It drives many developers to constantly design, create, incorporate, and test the changes in functional elements.

App developers and testers adopt new trends to understand the user demands and scenarios. One of these trends is adapting the agile framework in Software Development Lifecycle (SDLC). To follow the agile methodologies, the DevOps team incorporate and deploy the changes continuously, followed by continuous testing, which is a vital step to ensure that your financial applications are performing as per the industry standard even with the launch of frequent changes. It is impossible to gain the level of accuracy if the developers are making an error and failing to keep up the quality of the test codes. This article will highlight the importance of test code quality in the continuous testing of financial applications. Let us walk you through,

Benefits of maintaining code quality

  1. Test code quality impacts software quality  

The codes frequently change in the CI / CD pipeline, which may disrupt application performance. Financial applications are usually feature-packed, and it is challenging to introduce new code without testing and validation. Checking the code qualities are essential in financial applications. It avoids technical glitches and unstable performance, ensuring the overall quality of the software. Good quality codebase impacts software quality ensuring safety, security, and reliability of the codebase. It is critical to maintain high-quality codes and develop safe and secure systems. It brings me to talk about another benefit of maintaining code quality.  

  • Test code quality impacts software security

Financial applications are built with high-sensitive codes, which helps in protecting critical information. Writing codes for financial apps, which usually store, and process customer and financial data could be challenging. If developers have to write the codes frequently with each build, it would be necessary to test them continuously. If the quality of the code is not maintained, there would be errors popping up whenever the software would be tested. It would lead to compromising software security. The developers write the codes based on their knowledge and skill, but in the CI / CD pipeline, this may alter the functional elements of the software. Continuous testing supports these high-quality codes to ensure the security of financial applications.  

  • Test code quality impacts software performance

Due to the high volume of usage, financial applications have undergone sudden performance disruption and bottlenecks. There have been incidents in the past where the financial platforms suddenly stopped responding due to heavy traffic, hurling immense damage to brand reputation and customer disruption. Writing codes for volatile financial applications need domain knowledge and skills. The developers should be flexible to make frequent changes based on user requirements. We are already aware of how frequently users demand change. Based on this, the enterprises must adopt continuous testing. Through it, the financial sector would be able to maintain the test code quality and improve the performance of their software.  

  • Test code quality impacts software functionality

A recent survey reveals that 97.8% of users demand applications that have functionalities with user-friendly navigations. Developers do not almost immediately start writing codes with project discussion. Instead, they lay a foundational design and plan how they would like to execute it. Based on the requirements, a design could ideally be Architectural Design, High-level Design or Detailed Design. At each design level, maintaining the quality of the codes becomes vital. The importance of code quality increases in the CI / CD pipeline as there is a need for continuous testing to ensure the quality of the codes. Financial applications to be feature and functionality enriched, it is critical maintaining the code quality with robust testing.

Matrix to measure the quality of codes

Defect Matrix

There are two critical aspects in the defect matrix, the number of defects observed and the severity of the defects. To measure the code quality, it is essential to identify the errors at the stage when they originate, the number of defects reported, the time it takes to identify them, and how frequently they occur.

Complexity Matrix

Measuring the quality of test codes can be done through a complexity matrix. The cyclomatic complexity matrix measures the number of linearly independent paths through a program’s source code.  

How to Improve Code Quality?

  • Coding standards in a uniform protocol ensure that all users use a uniform and accurate style. It improves the quality, consistency and readability of the codebase while reducing the codebase complexities. It would be the best way to use coding standards to ensure the high quality of the code,
  • Ensuring the quality of the codes at the very beginning of the development stage can save a considerable amount of time, money, and effort in fixing the errors. In the agile framework or DevOps, the codes are analyzed at the code creation phase, which allows the developer to improve the code quality at the earlier phase.
  • The code review improves the overall software quality. Hence, a code review is an important step to verify the intent of the code.
  • Refactoring the existing legacy code is necessary when there is a need for cleaning the codebase. It improves the quality of the existing codebase by reducing the complexities.

Why Yethi for Continuous Testing of Financial Apps?

Financial apps are feature-packed and need frequent feature updates based on user requirements. In the CI / CD pipeline, organizations must adopt strategies and a well-structured and planned environment for continuous testing for their CI and CD efforts to be successful.

At Yethi Consulting, we follow an agile test automation framework. Our codeless test automation platform, Tenjin, is a plug-and-play solution built for the banking and financial sector. Its robotic capabilities enable it to learn and adapt to the application and its updates. Regardless of the complexity and number of updates, Tenjin facilitates continuous testing, minimizing the manual effort and speeding up the test execution.

We have a test repository of more than 850K test cases created with high code quality, which can be reused for test execution to help you save time, money and effort and ensure high business ROI.

Improving API accessibility with no-code automation testing in the BFS sector

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The scope of APIs in the banking and finance industry is ever-increasing. But the rising vulnerabilities pose a threat to their growth. That could also severely affect cloud service dependencies and internal APIs. As APIs evolve with their newer versions, there is a possibility that the functionality and uptime might greatly suffer. Hence, it is critical to test APIs and improve their accessibility for a reliable backend. Financial institutions must establish a strong API testing backbone to improve API accessibility and enhance business values.

Every time we add new functionality, testers must write a new set of codes, install and test them in the frontend, and finally integrate them with the application in the backend. If the code fails to perform at the initial stage, it might affect the feature after integration without fixing the errors.

Software development and testing have changed over the years, and many technologies like DevOps, CI/CD, the API, and Agile methodologies collectively have contributed to this change. As software and applications become more dynamic, the teams have incorporated new techniques to conduct end-to-end quality testing to evaluate the software. 

Why no-code automation testing for API?

API proves to be a source of outstanding end-user experiences as they gradually become the puzzle pieces for modern banking applications. Financial institutions are hosting API-based cloud services to meet user requirements. Yet there is a challenge that organizations must overcome. Cloud offerings change and evolve, and to keep up with API integrations requires continuous testing.

We all know that continuous testing without automation requires time, effort, and money. Organizations must opt for no-code continuous automation testing to prevent code breakage, poor usability, and accessibility. APIs require regression testing frequently, and the QA team manually conducting regression testing is not a viable solution because repetitiveness, monotony, and frequency nature of continuous can introduce errors in the software and take much time to resolve.

Testing APIs are often time-consuming, which also includes a chunk of investment. Thus, organizations are opting for no-code automation testing to reduce the time, money and effort while eliminating errors. No-code automation testing platforms allow developers to create applications following the visual programming models.

No-code automation makes it easy for the team to create API tests and verify functionality and uptime. More the QA and DevOps teams use the no-code automation testing solutions, the faster they will discover an incomparable way to validate high-quality integrations and their UI representations.

What are the crucial areas that need to be examined in API Testing?

API testing focuses on the three most critical aspects of the testing process – connectivity, response, and performance.

  1. Connectivity – Testing the connectivity with the server is the first aspect of API testing. Users who wish to test the connectivity can dial the API using the service URL. The code of this service command is 200. The users can establish a connection if the server responds to the call. Similarly, if there is no response, the connectivity fails.
  2. Response – The second aspect of API testing is to test the correct response time for different API requests. It involves validating the response command with accurate values and an appropriate status code. Following are the examples of validated status codes commonly found in API testing.
    1. Error response code is 401 UNAUTHORIZED in case of missing or invalid authentication token
    1. Error response code is 403 FORBIDDEN when the user is not authorized to perform the operation
    1. Combining the above two, the error response code will be 404 NOT FOUND owing to security reasons
    1. Error response code is 409 CONFLICT if there are duplicate entries or users try to delete root objects
    1. Error response code is 500 INTERNAL SERVER ERROR when the consumer cannot identify the exact error from their end
  3. Performance – The third most important aspect of API testing is the performance of the API. The API performance is tested and validated by calculating the response time of the API request sent. The APIs must handle the load of many requests. The fast response time and resilience toward high loads are the two criteria for evaluating the performance in API testing.

An API may register multiple users. An API must be able to handle the load by distributing, efficiently performing, and responding to a web service call without disrupting the API performance. The quality of APIs is evaluated based on their core functionality, uptime, speed, and end-to-end performance. The end-to-end API assures that all workflows are functional and in perfect order.  

The use of API in the BFS sector

The covid-19 pandemic has changed the financial and banking sector by creating new avenues for API workflows. The banking and financial industries use APIs to address user requirements through this embedded technology. Financial institutions are using APIs in three ways.

  • Private API: Financial institutions use Private APIs to improve their internal processes, operational efficiency, and productivity.
  • Partner API: Financial institutions use Partner APIs to collaborate with third-party partners like clearinghouses, brokerages, underwriters, and custodian banks, where the partners use the bank’s platform to provide outstanding services to their customers.
  • Open/Public API: Financial institutions use Open APIs to gain business and improve their customer bases. With open APIs, organizations are growing their business by extending their services.

Is API testing difficult to conduct without no-code automation solution?

API testing is critical in short release cycles as there are frequent changes. API testing does not affect the test outputs in anyways with the frequent occurring changes. API testing ensures product quality throughout the CI/CD processes. API testing requires users to handle chunks of JSON responses to match fields and surface issues. However, the difficulty will arise for non-developers to implement as testing API responses involves writing code, analyzing JSON, and writing it to variables.

It would be difficult to test asynchronous endpoints, as asynchronous APIs take a little longer to respond due to the unpredictable behavior of background server processes. It requires an infrastructure for continuous testing to test such asynchronous services. What a no-code automation solution does is blend the API and continuous testing. As the automation testing solution is codeless, it is easier for non-developers to implement codeless testing to validate API responses.

How no-code automation testing improves API accessibility for BFS sector?

No-code test automation solution works best with unit testing and regression testing. Both these tests are an integral part of API testing. To improve the API accessibility, the testing team considers integration testing with unit testing. But the fundamental difference between a unit test and an integration test is that the former covers an isolated part of a system with no external dependencies, and the latter covers more of the system put together, which uncovers bugs when multiple units are combined.

Unit tests cover underlying APIs that measure the accessibility of information or interactions to the right place. APIs include UI components validated by unit testing to gain better accessibility to underlying APIs. Additionally, integration testing can also be automated to improve accessibility. Automating both unit testing and integration testing can help reduce regressions effort, simultaneously improving the value and the quality of the applications.

Automating APIs with no-code testing solutions can help reduce the burden of manual testing for the team. Organizations opt for a no-code test automation solution instead of manual testing to be more efficient in their testing services. By building a clear test strategy and adding coverage for accessibility, teams can ensure and inform the quality of the codes within the process and prevent regression burden from deploying to production.

Conclusion

Adopting continuous API testing is a wise decision as it helps resolve underlying API problems like outages, technical failures, and functional glitches. Continuous API testing helps detect early API errors and reduces mean time to recovery (MTTR).

With a no-code API automation testing solution, continuous integration and deployment happen faster and are validated immediately, helping organizations save time, money, and effort.

At Yethi, we understand that the future looks promising in API testing. An increasing number of applications operating on Cloud platforms using ‘as-a-service’ business models need stable and secure functioning APIs. Driven by constant innovation, we utilize it to help organizations reduce the testing time of their applications. We know what it is like to keep up with the competition in the market, and we help financial industries to maintain their commitment. 

With years of experience and expertise in quality assurance of business applications, we combine traditional testing and modern functional and security testing to ensure the quality of APIs in terms of their functionality and platform security. We have developed a library of more than half a million test cases, including used cases, like UPI and lending. With our codeless test automation platform, Tenjin, we have moved up a level in testing and innovation. We automate your end-to-end software testing cycle and validate the request and response configuration of APIs.

Our services and solution align with the open banking ecosystem, and we offer validation coverage that includes functionalities, API security, performance, and automation. Our solution is built with cutting-edge technology and accelerators, adding significant value to time, cost, effort, and customer satisfaction. Contact us for a free consultation.

Why is the Browser and API Testing Shift Left?

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Quality assurance and software testing are the key areas of the software development phase. The current scenario is that the software development lifecycle (SDLC) demands integrating testing simultaneously with development. To assess the quality of test codes with ease, teams find it easy to execute testing soon after the development stage across the CI/CD pipeline for better quality checks. It is referred to as shift left testing.

Shift left, initially conducted at the end of the software development lifecycle, is now executed simultaneously in each stage of development (testing comes to the left of the development stage in the workflow process). This technique is becoming exceedingly popular and driving the growth of DevOps and other modern development techniques.

Testing is introduced in the early stage of the product development lifecycle, which allows the team to detect potential bugs, improve brand affinity by building products that customers desire and save time and money for their organizations. After the developers added the end-to-end browser and API testing to CI/CD pipelines, the scope of testing and quality assurance practices have extended.

What is Browser testing?

Browser testing is a type of non-functional testing that validates the performance of a code on different browsers. In addition to this, browser testing also checks how test codes interact with essential data sources. By introducing browser testing to the early stage of the development process, the developers have added another layer of quality testing to check the code compatibility across different browsers. The QA practices are reformed with the addition of browser testing along with other shift-left testing techniques such as unit and security testing in CD/CI pipelines.

The key areas that are analyzed in browser testing

  1. Browser testing validates the basic functionality to ensure that most of these work on different browser combinations. The functionalities such as dialogue boxes, menus, the input fields in the forms, website handling first-party cookies, and seamless touch inputs for mobile and tablets are validated by browser testing.
  2. The website designer chooses a uniform design such as applications fonts, images, and layouts. The team executes browser testing to ensure that the design elements appear the same as the design shared before the execution of the step. 
  3. The team executes browser testing also to check if it meets the accessibility criteria. The account must be compliant with Web Content Accessibility Guidelines (WCAG) and accessible to all users with ease.
  4. Browser testing also validates the website responsiveness. The design team ensures that the website design seamlessly adapts and fits the different screen sizes and orientations.

What is API testing?

API testing is a software testing type where we test functionality, securityperformance, reliability, accessibility, usability, and API attributes of an Application Programming Interface (API). API is a group of codes or collective codes replicating an interface between two computers. With the help of API, organizations can deploy external systems with their existing programs and extend the verification and computing services beyond the purview of the programs.

Let us start with an understanding of what the Application Programming Interface is. An application is integrated with many data, and how users can access these data through communication with the application interface. Now consider that an organization wants to deploy an external system with their existing one to extend services through other channels; API makes this process effortless.

This connected program and framework need an adequate assessment and verification. Organizations conduct testing at the API level to focus on assessing the business processes, application security, and data responses. As API testing is ideal for DevOps and the continuous testing process, the development and QA teams use and automate it.

API testing is important

API testing is an integral part of the Agile software development process, which needs to incorporate feedback immediately for a smooth process flow. The User Interface or UI testing is inadequate for validating API service functionality and fails to cover necessary aspects of back-end testing. It may lead to the rewriting of innumerable codes, often causing a delay in the product release and a rise in the cost of production. If not detected earlier, it may also result in bugs going unnoticed within the server or unit levels.

API and Unit tests are easy to maintain and effective, and organizations prefer them over other tests. Tests like the GUI test are hard to keep up with the pace of frequent changes in an Agile environment and require continuous reworking.

The developers can begin with API testing early in the development cycle. It allows the developers to resolve the bugs before they become a critical issue. API testing allows the development team to provide improved services and products to their customers. Incorporating API testing into the Agile methodologies can help engineering and development teams to improve the entire development lifecycle and provide outstanding quality products and services to their customers.

The key areas that are analyzed in API testing

The key areas that are analyzed in API are the responses of,

  • Reply time
  • Quality of data
  • Confirmation of authorization
  • HTTP status code and
  • Error codes

Benefits of API testing

  • API testing ensures that the connection among the shared platforms is accessible, reliable, and safe.
  • API test automation is faster and cost-efficient as it requires less code than automated GUI testing.
  • API testing helps developers identify errors in the early development stage and fix the issues before the product release. Developers can access the app to discover the grey areas early without a user interface, allowing them to save time and money.
  • API tests use JSON or XML, and it contains HTTP requests and responses, making them independent of language criteria.
  • API tests analyze applications of harmful codes and breakages. It protects applications by removing all possible vulnerabilities.
  • API tests can be easily integrated with GUI tests before performing the latter. API tests allows to integrate new users to facilitate the testing process.
  • API tests help in analyzing the non-functional tests like security and performance testing as well.

How are both “shift left testing”?

Before we investigate how the browser and API testing is shift-left testing, let us understand what shift-left testing is? Shift-left testing is also defined as “Early and Often” because it analyses the functional aspects of the product at the early stage of the Software Development Lifecycle.

It is easy for the development and testing team in the agile framework to detect the issues early rather than putting them up for the later stage of the software development lifecycle. DevOps executes comprehensive end-to-end automation to enhance product accuracy and efficiency. But, there are other essential functional and non-functional aspects of software testing that need consideration but often go unnoticed.

API testing and browser testing are the perfect examples of shift-left testing, which needs serious consideration to validate the overall quality of the software. By including browser testing and API testing, the production team combines all functional and non-functional aspects into CD/CI pipelines and Continuous testing in a cost-effective and time-effective manner. It helps in reducing operational expenses and maintaining high-quality standards with greater ease. 

API and browser testing is introduced in the agile workflow early during the software development lifecycle and simultaneously runs along with integrationuser acceptance, performance, security testing and more. Testing of unit and element can be done separately and integrated with the product during assembling. The practice does not just enhance the product quality but also helps in reducing time, money, and effort. 

Developers verify end-to-end workflows by combing HTTP requests and API calls through API tests. It helps the team validate all the layers of their systems from worldwide locations. Often there can be changes in the UI features that can affect the application performance on the website. The users validate complex navigation with the help of browser testing to ensure that no changes should hamper the application performance and look. It captures user view early at the development stage. 

Tests like API and browser are “shifting left” to earlier stages of the development process to maintain the rapid development pace. Companies are moving towards leveraging CI/CD practices to ensure that the codes are ready to be deployed. By taking the API and browser codes through the CD/CI pipelines, developers can analyze the product compatibility with different browsers. It can also help in detecting bugs earlier in the development cycle.

Running browser and API tests in your CI pipelines can help the teams to compare the tests with data from different stacks like the front end, back end, application, and infrastructure. They will be able to detect and troubleshoot failed tests during the development stage that boosts the QA process and development lifecycle.

Shifting browser and API testing to the left are considered the best option. By doing this development team can monitor any fundamental changes immediately before the final code goes live. It will also help in improving an organization’s business and operational activities.

Conclusion

We follow an agile methodology and framework in Yethi. We have a well-structured and planned environment for continuous testing. Our codeless test automation platform, Tenjin, is a plug-and-play banking-aware solution that is easy to integrate and learn. Tenjin’s robotic capabilities enable to learn and adapt to the application and its updates. Regardless of the complexity and number of updates, Tenjin facilitates continuous testing, minimizing the manual effort and speeding up the test execution, thereby helping you launch your product early in the market.

Our testing solution allows you to test your software at the beginning of the development stage. Testing is executed simultaneously with the development process so that you can test as you build. Tenjin covers comprehensive end-to-end testing, ensuring you have the quality codes and the product. 

Complexities in IT Architecture at Lending Space

The lending market is much bigger than we could probably comprehend. There are various categories of loans, and each has very distinct requirements. Banks and financial institutions have set up their own architecture for lending services – but can they ascertain that they are sorted with the architecture design for loan and credit software and that the architecture is specific to the requirement? It is not just about ensuring system integration; it is a thorough work of confirming system performance and customer satisfaction that is a continuous process.

Banks have complex architectures. They have layers of services and architecture to design, build and manage. This complex architecture makes the process extremely slow, which creates dissatisfaction for many big traditional firms who rely on ageing core architectures for quality services. Banks’ legacy technology is slow to evolve and perhaps will not be cost-effective to replace. Hence, the financial institutions decided to offer a small section of their lending services to the digital lending platform. But where do these digital lending platforms get the information? They must pull the data from the banking lending systems and sometimes from the complex legacy systems. Moreover, the digital lending platforms have their own challenges. 

As per a report in Business Standard, Reserve Bank will be out with the regulatory architecture on the digital lending platform. The reason for this rollout is that the borrowers are extremely dissatisfied with the performance of the digital lending platform. The digital lending business is expanding, but it still has a long way to go before it finally attains its state of technological maturity. Enterprises are using predictive machine learning to implement the scoring model, but for background verification of customers, they must still depend on other third-party agents. Hence, they have not yet achieved the quality of process automation.

Requirement of IT architecture for lending platform

Banks’ lending platforms have layers of services, which makes the lending process extensive and complex. Considering the complexities of the lending platform, banks must build a sustainable system architecture to ensure service fluidity. Banks require a proper IT architecture for lending platforms to offer services to the customers without any issues. It becomes an essential criterion to validate the system functionalityintegration, and performance to ensure that the lending platforms can meet all customer requests.

Let us consider a few scenarios.

  1. There can be multiple customer onboarding at the same time
  2. Customers can enter multiple information at the same time
  3. Multiple loan applications can be processed at the same time
  4. Multiple loans can be approved and disbursed simultaneously
  5. There is a need for multiple updates in the lending platform
  6. The digital platform may have to pull data from banks’ legacy platforms or another mainframe computer

The scenarios mentioned above need the support of an endurable IT architecture. Without an applicable IT architecture, you cannot guarantee the performance, integration, and functionality of lending platforms. It offers ease of use and accessibility for clients to ensure their satisfaction while retaining your customers. The system must perform consistently, and the consistency level is hard to achieve without a sound IT architecture. IT architecture allows you to design a guided workflow and work effectively to strengthen the lending platform performance.

The lending platform is the storehouse of intensive and extensive data that creates an immense load on the system. A proper IT architecture enables banks to generate data on time and reduce the delay in management reporting and data analysis. It reduces the impact of service flow in the long run.

The modern lending platforms are extremely nimble. The features and functionalities keep changing with customer requirements and requests. Running multiple projects without an adequate IT architecture will be cumbersome. Appropriate software architecture can essentially help you achieve the end goals. However, the IT architecture tends to be complex for the complicated lending platform. It must handle the workflow, several actions, repeated requests, task execution, and more. The criticalities in the lending market demand an equally complex IT architecture, which can be made easy by handling it appropriately.

Why is the IT architecture complex for lending platform? IT architecture for Loan Originating Systems (LOS) and Loan Management Systems (LMS)

The lending systems handles many processes flow. We can broadly classify them in seven stages – loan credibility, loan application, loan processing, underwriting process, credit decision, quality check, loan funding.

The organization uses the Loan Originating Systems (LOS) or the Loan software to assess the customers’ creditworthiness. The LOS covers the loan onboarding lifecycle/flow, data entry and verification, the credit assessment, credit approval, sanction letters, declaration letters, AD, welcome letter disbursement and more.

The Loan Management System (LMS) supports entire client lifecycle, loan onboarding, lead management, loan repayment, loan servicing, customer level maintenance, reports, delinquency and NPA processing, collections, credit score factor analysis to mistake correction and repayment strategies.

Both LOS and LMS offer a range of services over a single platform. Alongside offering so many services over a single platform, it is also essential to ensure customer experience and satisfaction and retain them. Customers want to be assured about the system’s performance and functionalities while applying for a loan, purchasing products and services on EMIs, and more.

Managing multiple workflows, massive databases, and customer profiling while ensuring customer satisfaction can make the end-to-end lending process a complex one. It becomes even more tougher without an appropriate IT architecture. An IT architecture must handle the configuration of new loan products, entire loan lifecycle or workflows, fraud prevention mechanism, analysis of data, and more.

Lending systems must capture the information from credit bureaus, accept payments from many service providers, integrate with CRM platforms, accounting systems, collection and credit organizations, and more. It must be able to integrate services from services providers. When enterprises integrate multiple services and some from third-party agents, the IT architecture tends to be more complex.

Lending services are no longer following the traditional process. With a digital platform, lenders are offering direct access to their customers. Financial institutions must address multiple requests of their customers of validating information and data, updating information, uploading documents, accessing messages, and more. All these requests make the IT architecture extremely complex. The main systems must be in connection with the digital lending platform so that whenever customers seek and pull information, the banks’ systems can respond to their requests.

What is the solution? Can testing control the complexities of IT architecture?

Maintaining the system quality can help you deal with the complex IT architecture of the lending platform. A lending platform needs multi-platform and language support. Only the required member should be able to access the lending platforms. It causes less traffic on the website and can control the complexities of IT architecture. 

A lending platform must be integrated with multiple platforms to offer required information to the users. Through integration testing, enterprises can control the complexities of IT architecture. Companies also validate the scalability of the lending platform to ensure that the load is equally distributed. It also checks for the systems’ durability with multiple users using the lending platform simultaneously.

Unauthorized logins can create an uncalculated risk for the website that can intensify the complexities of IT architecture. Security testing ensures that the systems are encrypted for access, the users have role-based access control, and the access criteria of role-based access control are defined.

It is also crucial to test your system flexibility, user-defined fields, custom workflows, and definition of products and services. One of the main criteria of a lending platform is to check if the functionalities must be the same for the open-platform or commercial bank systems. You must also validate the components used in open-platform and commercial bank systems. One of the most important criteria is to check whether we can reuse the custom services and components. Isolating the platform-specific UI code from the main source code line will also help control the complex IT architecture.

Conclusion

We cannot reduce the complexities in IT architecture in the lending space, but we can handle the complex framework of the lending platform. We can control the significant complexities in the lending platforms through the right strategy, distribution, authorization, and access. Organizations must validate their systems frequently to ensure that the system quality is up-to-the-mark. When the IT architecture is already complicated, assuring the system quality will be an added burden, which organizations can ease through thorough end-to-end testing.

Yethi has executed multiple lending projects across more than 22 global countries. Our services include functional and non-functional testing. Our testing experts can provide the most appropriate advice for your lending project to help you achieve the highest ROI on your test implementation projects. Our 5th generation robotic test automation solution, Tenjin, is easy to integrate with all leading lending platforms. It reduces your testing time to 45% and enhances the quality of financial and banking software.

Test Automation ROI Primer

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Software Testing Automation has gained significant acceptance in enterprises in recent years. Many organizations struggle to identify the value drivers in a test-automation purchase and might take decisions based on partial data. 

This article is an attempt to help people understand why automation would make sense, how to understand the various platforms out there, how to balance the economics and present an ROI to ensure proper communication of the expectations.

Let us start by understanding the need for testing automation –

Software is consistent – Any software will consistently perform actions as per the instructions. While the instruction set might be suspect, the software would be consistent irrespective of the day of the week, the temperature outside or any of the factors that impact humans.

Software is exact – Logical structures have no room for common sense.  So, the onus on the developer to understand intent and implications is high.  Given that majority of enterprise software, today consists of a myriad set of options, the chances that a particular combination of options (an option set) might work contrary to intentions is high. 

The software will evolve – Any software that you use is amorphous and would continue to evolve as long as there are customers and/or developers that wish to tinker. Change is typically due to innovation, competition, regulation, or adaptation. 

Software is fragile – New features and options must be delicately introduced, considering the existing options and their usage.  It is very much possible to unintentionally “break” an “option-set” while bringing in some new capabilities. 

Software Testing – Considering these attributes, it is imperative that software is tested – when it is designed, built, deployed, or modified. The discipline of software testing has been evolving in parallel to software development, albeit in the shadows. Considering the repetitive nature of software testing, a lot of research and effort has been spent on reducing the “drudgery” of the repetitive tasks by adopting automation in the practice of testing.  Automated testing is a large part of the public debate and we have explored why exploratory and automated testing needs to coexist in our article here.    

In this article, we would attempt to share how test automation supports the mission of consistently deploying reliable software and how one could explore the ROI of these efforts. This is important as Test Automation is primarily a tool to improve efficiency and not a tool to improve the effectiveness of your tests.  

What Constitutes Test Automation

The practice of software testing essentially is a stimulus-response study. You provide stimulus to the software (“Application under-test” or AUT) and validate if its response meets a predetermined criterion. 

The profession of software testing is to

  1. identify various stimulus-response conditions (test-cases) that could be encountered during the use of the software
  2. plan and execute a sequence of such test-cases
  3. capture and report software behavior,

Test Automation is an aid to a software tester, where the execution and reporting of a certain subset of cases are delegated to the automation software. 

 Automation allows teams to focus on “net-new”

As software gets enriched, the testing burden shifts from testing “new” feature to testing the “existing” features.  In the graph, we have shown 5 sprints where each bar represents newsprint.  The “new” functionality in each sprint is shown in “blue” and the “existing” features from previous sprints are in “grey”. You would notice that while the volume of new features is relatively steady, the volume of “existing” features has grown with every release.    

While leaders are happy to spend time/effort on testing the blue portions, the repetitive testing of the grey portions is a shoe that pinches. Re-testing of functionality that has been available for a few releases represents a unique set of challenges across all stakeholders. From a tester’s perspective, it is repetitive and therefore boring. It is very likely to only get a cursory look-over and not an in-depth review.  From a sponsor’s perspective, it represents an ever-increasing volume of work that often has a low-return element.  Therefore, we risk under-testing and letting defects slip into “deemed-stable” portions of our software.  Test-automation represents a middle path, where the code can be tested for a larger sample of usage conditions at a lower cost-time construct where only the exceptions are picked-up for further evaluation. 

What benefits can I expect? What benefits should I not expect?

The investment in the right automation tool once set up offers potential benefits like:

Coverage: You could achieve a higher test coverage / larger sampling of the software functionality, faster and at a lower execution effort, than what you would get with pure manual efforts. 

Speed:  Automated tests can run faster and round the clock.  These could reduce your overall time-to-test significantly, giving more time to development teams to fix any potential issues. 

Consistency: Test automation tools offer maximum consistency. The same test case runs multiple times without even a minor deviation.

Effort:  Test Automation can be set up to run with little or no manual intervention. 

The Caveats

Setup: Setting up tests on any automation tool is a laborious task.  It requires planning and foresight that only experience would bring. Knowledge of how data changes across time, what variables would need to be dynamically updated and how to validate expected outcomes etc. require experience and time. 

Maintenance:  Once you have set up a large library of cases to be automatically executed, it should be smooth sailing; or so we think!!  The challenge of test automation (and therefore where money is generally made or lost) is how easy it would be to maintain this comprehensive library when your underlying application changes. When the “Application-Under-Test” changes, you would have to identify all aspects of your automation that consequently need a change.  

Test Automation – Understanding Costs & Benefits

Companies are increasingly investing in test automation considering the increased frequency of changes and anticipated cost-benefit. The investment in the right automation tool is worth it, as it offers potential benefits like:

Coverage: Test automation offers high test coverage with nearly 100% results, which otherwise cannot be achieved by manual testing.

Consistency: Test automation tools offer maximum consistency. The same test case was run multiple times without deviation.

Speed: Automation is multiple times greater than the manual testing speed. 

Effort: The manual effort in executing a test automation tool is almost negligible.

Test-automation solutions are varied and bring different categories of over-bearing costs

The cost of the test automation can be categorized as:

  • Acquisition cost
  • Maintenance cost

Acquisition cost: There are some free test automation tools available in the market. The free versions mostly perform basic functions and are not recommended for thorough end-to-end or regression testing.

To buy an efficient test automation tool, you will require to make some investment. A licensed and open-source automation tool may start with as low as $4000, depending on the brand and functionality it offers. The total acquisition cost is often inclusive of the tool cost and construction cost. Before investing in the tool, it is recommended to do thorough research and understand the right tool that will complement your requirements perfectly.

Maintenance cost: The maintenance cost of automated tests drives expenses up. Maintenance may involve a range of factors:

  • Process
  • User interface
  • Data
  • Environment

However, maintenance of automated tests may cost you a bit, statistics reveal the fact that maintenance can be a lot cheaper affair than creating new test scripts. Furthermore, frequent maintenance will keep the system efficient and seamless. Maintenance is a good option while considering the cost model of the project, as manual testing or implementing new automation tools can be expensive and time-consuming.

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Test Automation ROI

Now that we have given you an understanding of the costs and benefits of test automation, we go further deep into exploring the ROI of these efforts. Companies are constantly investing in test automation, but investment in test automation without proper calculation of ROI would be a half-baked effort, which is unacceptable for the companies.

At the beginning of this article, we have stated that test Automation is primarily a tool to improve efficiency, and the calculation of ROI determines the efficiency of your test automation process. Test automation is a one-time investment. Configuring the test automation at the initial stage of project inception can maximize the benefits in the long run. By calculating ROI, companies can decide to invest in test automation.

Calculating ROI does not necessarily mean that we would focus on the overall cost, which is required to evaluate the quality of the product. ROI calculation also includes the parameters like late releases, defects overlooked, and lack of quality.

One of the biggest challenges that the companies face is investing a large sum of money for conducting the end-to-end testing of software, which often they are unable to recoup. Once the companies decide what test sets or subsets they must automate, they will generate a high return on investment.

Due to poor decision-making, companies may spend a lot to adopt automation at the later stage of development, and if the project fails, they may incur a high loss. ROI-based automation testing resolves this issue. The Quality Assurance team decides which section must be automated based on the clients’ environment, system, and machine. They can do a cost comparison analysis of manual test runs and automation test runs and determine the types of scripts that can be automated.

Following are the significant metrics, which can be considered while calculating automated testing ROI.

  • Measure product quality – Ensuring the overall quality of the product by identifying defects and mean time to detection of defects.
  • Test execution speed – Comparing the test run duration percentage between automated and manual testing.
  • Thorough cost and resource analysis – Analyzing cost and resources are important as the test automation process involves software and hardware costs, prioritizing defects based on their severity, operational costs, the requirement of new resources, training costs, and more.

With the metrics mentioned above, we can calculate Automated Testing ROI. The cost that companies bear on resources, tools used, setting up the testing framework and more fall under companies’ investments. The net gain that the companies receive over their investments would be the ROI for the automation testing.

Following are the parameters required for performing ROI calculation.

Automating new tests – There are always a certain amount of costs involved in automating new tests. Before initiating the automation of new tests, companies must consider the predictable costs of developing, executing, and maintaining the tests. Based on the test categorization, you would segregate the test to automate or run manually.

Automate regression testing – Adding new features or changes in software would introduce new bugs in the existing modules. It makes regression testing one of the most expensive phases of testing. It is a necessary step to calculate the cost of automating regression testing.

Managing Multiple Environments – As companies develop products, they must be convinced that their product works equally in different environments. Hence, companies set up multiple platforms, devices, and browsers to ensure the success of their products. For organizations, it is necessary to calculate the ROI while setting up test environments.

Minimizing Defect Leakage – There are instances where bugs were detected at the production phase, as they were not resolved at the development stage. It often leads to defect leakage in the production phase, making it an expensive issue for organizations. Calculating ROI is necessary for companies to control such overhaul expenditures in certain instances.

Reusable test cases – Using reusable test cases saves time and effort by avoiding task duplication. When you already have created test cases, you can reuse them in multiple scenarios. Hence this will impact while calculating ROI.

Protecting product knowledge – Companies may still gain control over their systems and software, but they need to take a calculative risk on their resources. If an engineer leaves, the company must look for a replacement and provide training for the job. It may impact the company’s long-term automation testing ROI.

Ways to improve Automated Testing ROI

Instead of automating all the tasks at hand, it is best to automate repetitive tasks. Automating the applications, which are not steady, may not show an accurate result. Moreover, it may increase your team’s effort and affect while calculating ROI.

Automation testing works best for regression testing. Hence, when new tests and integrated with the older ones and applications are tested across various platforms, automation testing can be implemented to save time, effort, and overall costs. Further, if you need to complete the test run in a shorter time, you can run parallel testing like a smoke test.

Changes are introduced frequently in software. Hence, the developers and testers are relying on exploratory testing which is widely used in agile models. The focus of exploratory testing is discovering, investigating, and learning through the process. The testers here own the freedom and responsibility to think and note down ideas before the test execution. As exploratory testing is strategic, it helps in improving automated testing ROI.

The testing process has evolved, and today shift-left testing is a popular step in the software development lifecycle. Shift-left testing allows you to detect defects in the early stage, which helps in reducing effort, time, and money. You could also use test management tools to identify redundant test cases at the early stage of the development process. Finally, keep thorough documentation of the process so that the newly hired resources can pick up where your previous resources have left.

Conclusion

The company adopts automation testing to improve its test efficiency and test coverage. Of all the possible methods, which could be applicable for calculating the automated testing ROI, the company must adopt the strategies, which work best for them and suffice their requirements.

When it is about improving the quality of your product, the right methodology would be to test your applications simultaneously while developing them. If defects are detected at the postproduction stage, the company will suffer monetary loss, which may be unacceptable for any organization. Hence, a little strategy, the right tool, and differentiation between manual and automation testing can successfully help you implement test automation ROI.

5 challenges of testing ERP systems in the banking sector and ways to overcome the challenges

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There are multiple reasons why the banking and financial industry needs enterprise resource planning (ERP) systems. ERP system facilitates agile delivery in the broader spectrum of banking and financial services and solutions. The system is used to understand the implementation at a large scale. The ERP systems offer solutions to multiple issues in the banking industry and help with thorough insights for upcoming projects. The ERP system helps in resource planning and increases the efficiency and productivity of an organization. The organizations have seen visible results by implementing ERP systems due to their benefits like,

  1. Improves business reporting – ERP creates one integrated database for all business processes and provides real-time information and comprehensive business reports.
  2. Improves customer services – ERP systems offer better accessibility to customer information with an improved response time, on-time delivery, and order accuracy.
  3. Better inventory costs – ERP systems include only the most essential inventory and avoid common problems like higher overhead costs and longer customer fulfilment times.
  4. Improves cash flow – ERP systems offer better invoicing. It is a superior collection tool that enhances cash flow. Faster cash inflow allows adequate investment for the business.
  5. Improves cost savings – ERP system allows cost-saving with improved inventory planning, customer services, procurement, and vendor relationship management.
  6. Improves data and cloud Security – ERP system has dedicated security resources, which prevent installing malicious software. It improves data and cloud security as the data is spread across multiple servers.
  7. Improves business process – ERP system helps improve mundane or manual tasks and implements smarter workflows allowing you to work more efficiently.
  8. Manages supply chain – ERP systems effectively forecast demand and lean inventory. It reduces the production bottleneck and offers greater transparency in your business.

However, the organization cannot always guarantee the successful implementation of ERP systems. ERP implementation can fail at its pilot phase due to multiple reasons. Poor project management, data inaccuracy or quality issues, implementation without adequate planning, ineffective consultation, inability to reduce the implementation cost, and more are a few reasons for ERP implementation failures. ERP implementation depends largely on the organizational approach. The organization may invest time and money only to see process stagnancy with little to no significant growth.

Testing of ERP systems in the banking and financial industry

ERP systems in banks and financial institutions are a procedure to plan and are commonly used by banks and financial institutions because of time constraints. ERP implementation works best with the right planning and strategy. It enhances the productivity and effectiveness of the process and people, supports business operations, and helps in business decision-making. ERP systems in banks and financial institutions can be tested at the core level and implementation level. The core team validates the static functionality of ERP systems, while the implementation team validates the dynamic and tailored features and functionalities.

The changes in features and functionalities, as we know in the banking industry, are extremely frequent. A small change in the system features can affect the workflow of multiple modules. The changes must be recorded and validated accordingly to ensure that none of the changes alters the system configurations. A system with a massive amount of data requires test automation. The organization analyzes the requirements and designs the automation test framework based on organizational infrastructure.

Challenges of testing ERP systems

  1. Frequent changes and inaccurate data – The ERP system implementation is a long process during which the system performance can fluctuate a great deal. The entire implementation process involves multiple risks that must be addressed in time. Banking systems are vulnerable and open to frequent changes. Due to the frequency of changes in the banking structure, the update must be constant and continuous, which also requires system receptibility. The changes must reflect in the system without delay. If there is a delay in data reflection to the system, there will be a discrepancy in available data that leads to data inaccuracy.
  2. Integration of new data with old legacy systems – Banking ERP systems have a broader scope. The dataset entered in the bank ERP systems is used in the various processes throughout the organization. The data is used in Marketing & Sales, Accounting & Finance, Supply Chain Management, Human Resources and many more. The data is stored centrally in the old legacy systems and referred to by various organizational verticals for different purposes. The main challenge here is it often becomes hard to test these legacy systems due to the absence of adequate tools. As the legacy systems store a high volume of data, the end-to-end testing of the legacy systems becomes necessary. It is a time-consuming and tedious task to test the legacy systems. In the case of banks migrating data from legacy systems to new ERP platforms, there can be a delay in the entire testing project leading because of slow data migration and unavailability of data, which can lead to multiple errors in the systems and banks’ internal processes.
  3. Implementing ERP in rush and without planning – This challenge is common when banks start their operation for the first time. Due to rising demand and customer requirements, banks and financial institutions are sometimes in a rush to implement ERP systems and critical aspects of the ERP systems can be overlooked. The urgency of implementing the ERP systems always leads banks to ignore the critical aspects of ensuring system quality. It also leads to implementing ERP software without adequate planning. If the systems are implemented in rush it might lead to multiple performance issues, data integration and security, data migration issues and more.
  4. Lack of project knowledge – Lack of project knowledge can lead the team to witness challenges of testing ERP systems. The team must have adequate project knowledge and training to learn about the project requirements. Adequate communication and training about project requirements make the ERP testing process easy and convenient for the team. With adequate project knowledge, the testing team can validate various aspects of ERP implementation at the various phases across the business operation.
  5. Lack of technical knowledge and absence of specialized team – ERP testing in banks is not a mission-critical practice, which leads backs to ignore a few critical aspects of ERP implementations. Banks and financial organizations execute testing ERP implementation along with other crucial testing projects. And often, the management team do not feel the need to delegate the most competent team. Banks also do not deploy a specialized team for testing the ERP platform. Banks cannot guarantee the success of ERP implementation testing due to a lack of technical knowledge and a specialized testing team.

Ways to overcome the challenges of testing ERP systems

All the components and modules of the ERP platform must pass through system integration testing. ERP being a central data system is a data source for multiple verticals. If the source data is not integrated efficiently, the processes within the organizations will not receive adequate and accurate data creating an immense discrepancy in the organizations. Banks’ data and information require utmost security and safety against data theft and manipulation. Hence, security testing is critical to ensure the safety of sensitive data.

Due to multiple changes incorporated in the Bank ERP systems, there can be a few alterations in the user interface design. It can also lead to confusion among the users. Hence with each implementation, it is necessary to ensure that the changes meet user requirements. System efficiency is crucial even with effective changes. An adequate module validation can ensure that even with several changes, implementations, and interpretations, the design flow of the interface remains intact. System integration and usability testing ensure that users can use the systems without disruptions.

It is necessary to validate the performance of the ERP system. The ERP system’s accuracy and speed determine its performance. It is crucial to validate the systems of their load, stress, capacity, volume, and scalability to ensure the reliability and stability of the system even with its extreme load. The performance of banking systems comes under heavy scrutiny from users or customers. Hence, testing the software before installation is essential to always ensure seamless performance.

Even a slight change can impact on the system’s performance, and as far as banking systems are concerned, the changes are extremely frequent. Regression testing ensures that the minor changes do not affect another subsequent module. As modules are interdependent, the poor performance of one module can heavily impact another. Through testing, the team ensures that all the modules and features run smoothly without any errors.

Conclusion

Testing ERP systems has drawbacks, but since ERP systems are not among the most critical functioning systems, banks and financial institutions tend to delay the testing of ERP systems or keep it long on their bucket list. It does not reduce the complexities of ERP system testing but aggravates it. The most pertinent approach is to address the issue by testing simultaneously with the implementation process. The most accurate approach is to build an appropriate implementation strategy and plan to avoid resolving the issues at a later stage. It is always a good idea to prevent rather than fix the occurrence.

5 challenges in the digital customer onboarding process and ways to combat the challenges

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What difference have you noticed between customer onboarding before and after the Covid-19 pandemic? Let’s say you wanted to apply for a loan before Covid. You had to raise a request and enter the details on the bank website, and within 24 hours, the bank representative would visit you at your address to complete all the paper formalities. Customer verification in person was an essential aspect of customer onboarding whether you physically visit a branch or any representative visits you.

Due to social distancing and contactless interaction during Covid-19, the footfall in the branches was reduced. It completely changed the customer onboarding process. A few technologies have played a massive role in determining the customer digital onboarding process and simplifying the process for both customers and banks. Video KYC, geo-location verification, aadhar-based customer verification, and more were the go-to solutions for the industries. Financial organizations and Fintech launched multiple applications (mobile and web) to ensure that the process of digital onboarding can be carried out without disruption and offer a seamless experience.

Digital onboarding is no longer about getting and converting new customers or retaining the old ones. It is more of a service, an added benefit offered by the banks to their customers. It determines the relationship banks establish with their customers and ensures satisfaction over the digital journey of customers. However, the digital onboarding process is at a nascent stage, and the journey is not over until the customers can use the services without any interruptions. There are definitely some challenges that both customers and organizations face and strive to overcome. In this article, we will explore the challenges organizations and customers face with digital onboarding and ways they can overcome them.

Challenges of customer digital onboarding

  • Platform Security – The platform security of digital onboarding is a vital challenge that customers and financial institutions face daily. It is hard to protect both customer and organizational data in traditional banking. When the data are shared on the digital platform, it requires a stringent security mechanism to protect data from stealing and manipulation.

The traditional customer onboarding process is lengthy and time-consuming. It has several steps like document submission and verification, a branch visit followed by an online application, and approval waiting. With digitalization, customers no longer prefer the long awaiting time of traditional ways of onboarding. Hence, many financial institutions, the majority of them have opted for the digital onboarding process. The customer in the digital onboarding process must follow the entire process, but instead of visiting the branch, the whole process is taken care of on the digital platform.

Before the pandemic, the onboarding process was a mix of digital submission and branch visits. But in 2020-2021, much has changed. The recent trend is the end-to-end onboarding process is done on the digital platform without the need for customers to visit the branches for formalities. Since customer uploads all documents on digital applications, security could be a concern for banks. Each bank may have a set of challenges, including identity verification compliance and security issues.

  • Complex UI features – It is a massive disappointment for customers if they are required to navigate through complex UI functionalities during their onboarding journey. Customers cannot relate to applications with complex UI designs. Hence, the banking and financial industry faces an immense challenge in keeping up with customer expectations for a simplistic and user-friendly application. Several survey reports have confirmed that customers tend to appreciate digital platforms with clean UI design. If you feed in too many irrelevant and unnecessary features like pop-ups, action buttons, or others, customers would not think twice about leaving the site and would not return.
  • Performance glitches – Performance errors in digital applications are frequent. Banks create service-based APIs to establish connections between the application and customers’ bank account details. The API can retrieve financial information from the banks and send the information back to the banks. The digital platform for the onboarding process can face a tremendous setback if the platform does not meet up to the expectation of handling multiple requests simultaneously. If the applications cannot bear the request volume and the load, they would easily face the performance bottleneck.

A poor digital onboarding platform performance can disappoint the customers, who might discontinue using the platform. Customers using the digital onboarding platform continuously can also create immense stress on the platform. If the platform is not robust and capable, it will not be able to endure the maximum system usage and might face performance errors. Most digital onboarding platform fails because of these performance errors. Customers associate themselves with systems that are stable and have longevity. A poor-performing digital onboarding platform will not be able to retain customers.

  • Lack of personalization – Not all customers want the same services. Different customers have different needs. Hence, personalization is crucial to retaining the most loyal customers. Most digital onboarding platform fails to personalize the applications based on customers’ needs and wants. It is challenging to keep up with customer expectations as customers’ needs may vary. Lack of personalization leads to dissatisfied customers. Users will not engage with the platform if the platform fails to meet with adequate and personalized digital services.
  • Delay in resolving grievance redressal – Since digital platforms are a combination of services by multiple third parties, it is hard to track the complaints. In the case of digital onboarding, there may be multiple agents integrating their services with a single platform. If any grievance arises, the users will not know whom to raise a complaint to and how long would it take to resolve the issues. The apprehensive customers will either solve the errors or leave the platform without even informing regarding the discontinuation of services.

Following are the instances of consequences that organizations must face if challenges remain unresolved.

  • Users may sign up for a month’s free trial and discontinue using the service. As per a report, 40 to 60% of users who sign up for a free trial use a product once and never come back. As low as 2.97% continue the service even after a month.
  • Many customers lose interest after using the platform for a week. As per a report, almost 75% of new users leave in the first week.

It may be noted that organizations gain 65% of the business revenue from their existing customer and the chances are that most satisfied customers will recommend your business. Hence, organizations must address the challenges before it becomes too late to address them.

Ways to overcome these challenges

Customers are the ones who use your end products. When you think about your products, you must have customers in your mind and think from their perspectives. Banks and financial institutions have already handled customer onboarding traditionally. They know what their requirements and customer expectations are. Hence, while tackling customer onboarding digitally, they can enter only those fields that are necessary for customer onboarding to avoid the lengthy onboarding process.

For a successful customer onboarding process, the lesser features always guarantee a better user experience. Include only the necessary UI features and leave out the rest. The most relevant features can add value to your digital application and help to retain your customers. Avoid complicated User Interface design and opt for the most minimalist layout with the right combination of adequate features and nothing more to clutter your application with unnecessary action buttons, service menus or more. User retention is based on building the application with simplistic designs. If you notice your customer engagement with your platform outnumbers the time, they begin using the application for the first time, it will determine your customer experience. An outstanding customer experience is worth all your effort. Functional UI testing ensures that all fields, navigations, pop-ups, buttons, and other functional UI elements are working without any technical error. 

Usability testing is important as it tracks the user to transition from the time they sign-up to using the product for the first time. By conducting usability testing, organizations can examine and verify the points that conflict with user expectations. For a smooth digital onboarding process, financial institutions require a clean user-friendly interface. It enables the business to gain direct revenues.

Security testing is a critical way to ensure the security of the digital onboarding platform. It ensures that the platform maintains identity verification compliance and overcomes security issues and challenges.

Performance testing ensures the system’s capability and stability during the onboarding process. Performance testing ensures that the APIs manage the load and perform as expected. It removes the performance bottleneck and reduces the resolution time.

A personalized digital onboarding process is key to engaging your customers. Customer seamless onboarding experience will make them delighted. And they will return to your site without hesitation.

Do reach out to your customer and collect their feedback. The customers feel connected to the businesses that value their opinion, suggestion, and feedback. Most organizations add online feedback forms to help them immediately capture customer reactions and avoid losing them. It is a dynamic step that can help you to retain your customers. The most honest feedback can help you to improve your digital onboarding processes and help you to serve your customers with no regrets.

At Yethi, we have tested the digital onboarding process for a few of our clients. We have supported our clients in transformational projects to the digital platform by offering them end-to-end testing. From security testing to performance and functional UI testing, we have helped our clients to serve their customers with outstanding services and gain high ROI on their business.

Our 5th generation robotic test automation solution, Tenjin, is easy to integrate with all major banking platforms. This intuitive solution can reduce the time to market and help you save money and effort.  

Is there a difference in QA services for Retail and Corporate Banking?

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The need for QA services in the banking and financial industry is increasing with the rise of technology and innovation. Following the digitalization trend, banks and financial institutions are transforming their front-office and mid-office. The back-office operations, which were still on pen and paper, are slowly brought into the digital platform. And with this sudden burst of digitalization, banks cannot long put their QA needs on the back burner. On the contrary, alongside the digital transformation in banks and FIs, the quality assurance services are also going through a massive digital transformation.

Banks’ digital transformation journey has been in the limelight for over a decade, but the years 2020-2021 have been significant when it comes to growth in digitization. As per a report in Sensor Tower, nearly 1.24 billion financial applications were downloaded in the second quarter of 2020, which in the first quarter of 2022 has gone up by 1.74 billion.

Banks’ digital transformation journey is driven by customer demands, new trends and technologies, and market competition.  Banks have no other options but to evolve and embrace the digital transformation journey. If we track the current trend in the banking sector, we will understand that banks are currently using advanced technologies like artificial intelligence, machine learning, cloud services, and blockchain to digitize the banking systems. If banks must cater to customers and ensure customer satisfaction digitalization is the only option. However, in this digital transformation journey, customer experience and data security will be on focus for banks and financial institutions.

Whether in core banking, capital markets, retail banking, or corporate banking, digitalization has become a revolutionary movement across all financial and banking sectors. The financial industry now depends greatly on technology. They deal with multiple clients and handle various transactions daily. Banks need to have essential QA strategies to ensure that the systems work at all times without any disruptions. QA testing helps banks improve their systems and products and ensure customer satisfaction with an error-free transaction mechanism.

In this article, I will compare the QA services in corporate and retail banks. Is there a difference in the QA services for retail and corporate banking? What is the striking factor differentiating the QA services in these two banking segments? We will also explore the service lines in these two banks and the types of QA services offered to ensure the quality of their services. 

Understanding the Retail Banking

Retail banking is also known as consumer banking or personal banking. The services in retail banking are tailored to cater for individuals and small companies. Many banks offer a basic range of services like account maintenance, lending, line of credit, mortgages, credit and debit cards and more.

Retail banks offer branch banking and online or digital services based on specific customer needs. Retail banks help the consumer maintain saving accounts, earn interest on saving accounts, withdraw funds, pay for products, loans, and more. Retail banks in the current time have undergone massive digital transformation. They are offering a range of services on the digital platform to ensure customer convenience.

Services and digitalization in retail banking

Retail banks offer the following services to consumers,

  1. – Customers open bank accounts to keep a track of their money, savings, transactions, and more.
  2. – Customers can keep their jewellery and valuables in the safe lockers available in banks.
  3. – Customer can maintain their deposits through CDs as the accumulation of interest amount is higher in CDs than in saving accounts.
  4. – Retail banks provide various loans to the consumers like home loans, auto loans, education loans, personal loans and more based on individual requirements.

Apart from the services mentioned above, a few commercial banks offer services like investment banking, commercial banking, and more. Some investment and commercial banks have dedicated services for retail customers to expand business relationships.

Digitalization in retail banking – Retail banks are building mobile applications to offer various services to customers online.  Through mobile applications, customers maintain their accounts, transfer from one account to another, pay bills, pay for products and services at the merchandise, and more. Consumers can also avail of loans online without any paperwork.

These days customer bank accounts are linked with the Unified Payment Interface (UPI) platform to provide a range of services to the customers through APIs. As per a report by Business Standard, UPI processed nearly 6 billion transactions worth Rs 10 trillion in May 2022, the highest volume ever recorded since the launch of the UPI platform in 2016.

QA services in the retail banking

The number of customers in the retail banks is more. Because of the services retail banks offer their customers, the banks tend to receive multiple requests at the same time. It creates an immense load on banks’ servers and systems. Consider a scenario; a bank receives multiple customer requests on a busy weekday building a performance load on their systems. If the bank’s systems cannot handle the load and send delayed responses to the customer, it will create a negative impression on the customers.

Bank systems are expected to be up and running all the time. Ensuring that the systems perform as expected even during high traffic requires an adequate QA service. However, the QA services are not just about checking the performance criteria of the banking systems. The scope and scale of quality assurance are much broader in retail banks. From system integration to functional acceptance and maintaining system security, the banks’ systems must undergo end-to-end system validation to ensure that they offer outstanding customer services without disruption.

Ensuring the quality of systems requires thorough strategizing, planning, preparation, and execution. Standard QA services for retail banks must encompass the ability to validate core banking solutions, lending platforms, CRM, payment, various channels, digital platforms, and more. The following comes as a bundle of QA services that retail banks require to ensure the quality of the banking systems.

  1. Requirements Assurance – Organizations do a thorough requirement analysis of the application under test before starting with the test process. As the scope of testing is wide and varied in retail banks, it is critical to gather the requirements before executing the test.
  2. Integration Assurance – The systems running in retail banks need multiple features to be integrated. The integration must be validated with the application suite and system landscape. The system integration ensures that the application has all the required fields added to the applications and systems.
  3. Functional Assurance – The retail banks’ systems will fail if users face accessibility or usability issues. The retail bank systems must pass the functionality tests to ensure that they conform with user acceptance.
  4. Non-functional Assurance – Due to the heavy volume of transactions, the systems in retail banks face two common issues performance bottleneck and security. Both are essential aspects when it comes to ensuring the quality of the systems. An adequate quality assurance service cannot do without validating these critical aspects.
  5. Automation Testing – The time to market the banking services and products has reduced significantly due to rising customer demand. Financial software is one of the data-intensive applications and the time-to-market is less. Hence, banks and financial applications require extensive test automation. Automation testing significantly reduces the time of product launch, improves accuracy, enhances team productivity, and most importantly it saves money.
  6. Regression Testing – Regression testing is one of the essential testing processes for retail banks. As retail banks serve multiple customers simultaneously, the applications in the retail banks require frequent changes in the features and functionality to enable them to offer personalized services to their customers. By adding new features and functionality, the existing features may respond with some errors. Regression testing in retail banking systems ensures that the existing application features work just as fine in collaboration with additional new features.

Understanding the Corporate Banking

Corporate banks are a part of business banking that offers their services only to the corporates. Corporate banking offers several benefits to its corporate customers. Since the services are tailored to suit the requirements of the corporate customers, corporate banks offer unique propositions on customers’ salary accounts, regular salary updates on websites, corporate card facilities, multiple reimbursements, and allowances such as meal vouchers, medical reimbursements, leave travel allowances, gift cards, conveyance, fuel allowances, and more.

Corporate customers can also receive special rates on National Pension System, captive ATM within the company premises, travel cards, working capital, long-term loans, and structured finance. Many corporate banks offer transaction banking like trade finance, supply chain solutions, remittances, cash management and escrow services to their corporate customers. Corporate customers can also get facilities on investments like term deposits, mutual funds, and structured instruments. Corporate banks also offer treasury services like debt capital markets, forex and derivatives. To cater to corporate requirements, some corporate banks also offer value-added services, like cloud solutions, travel services, tax assistance, concierge services, and more.

Services and digitalization in corporate banking

The services in the corporate banks are value-intensive and tailored to suit the specific requirements of corporate customers. Following are the types of services that corporate banks provide to their customers.

  1. Corporate banks offer loans and other credit products to their customers to help their businesses expand
  2. It offers treasury services like debt capital markets, forex and derivatives and cash management services, and trade finance
  3. Corporate banks also offer equipment lending to help their customers grow their business
  4. Corporate banks also handle commercial real estate requirements and employee services

Digitalization in corporate banking – Corporate banks offer a bundle of services to their customers. They offer packaged offers to the employees of their corporate customers. The banks that serve both retail and corporate accounts, build mobile applications and based on their requirements offer tailored services to the customers. Through mobile applications, customers maintain their corporate accounts, apply for loans, invest in mutual funds and stock markets, apply for business and travel cards, and check the Forex market.

QA services in corporate banking

Corporate banking is more value intensive. As it caters to a specific customer segment, the products and services are more exclusive than services in retail banking. QA services in corporate banks are much more complicated than in retail banks. It does not follow the same line of services but customizes based on client requirements. Consider a scenario; the first payday, when companies are to credit the salary accounts of their employees. The performance requirements of banking systems will not be the same as all other days as there will be an immense load on banking systems due to their maximum usage on that particular day. There will be a delay in salary processing if the system faces performance issues. When banks opt to cater to their corporate clients, they must ensure system capability and sustainability on the days when the traffic is at its peak.

Corporate banks need quality assurance services to ensure that their systems are tenable during the days when customer traffic is high. In addition to checking the performance of banking systems in the corporate banks, it is also essential to check other quality aspects of the banking systems. Corporate accounts have distinctive features and do not follow the conventional line of retail services. As mentioned, banks customize corporate accounts based on clients’ requirements.

The corporate accounts are a mix of corporate and retail services. Hence, the applications require adequate validations. It is crucial to ensure that the systems’ elements of both the services are integrated without errors and working without any issues. It is also essential to check for the system’s security as it contains more than individual data like customer mutual fund details, investment records, loan details, and more. Corporate banking systems must also undergo thorough end-to-end testing to ensure seamless system performance.  

Ensuring the quality of corporate banking systems is equally important. Banks must strategize, plan, and prepare before the start of the test execution. Standard QA services of corporate accounts encompass validating customers’ lending platforms, trade and treasury accounts, digital platforms, and more.

  1. Requirements Assurance – The services in corporate banks are heterogeneous in nature and tailored to suit the specific requirements of customers. Requirement analysis of corporate banking systems is necessary to understand the requirements of the application under test.
  2. Integration Assurance – As there are multiple services bundled together it is also essential to validate the feature and functionality integration with the application suite and system landscape. The system integration ensures that all required functionalities are added to the applications and systems and work seamlessly.
  3. Functional Assurance – Since the functionalities in the corporate banking systems are diverse it is essential to validate the response of features and functionality. Based on the customers’ requirements it is critical to ensure that the added functionalities are working as per customer expectations.
  4. Non-Functional Assurance – As the corporate banks deal with valuable information maintaining the security of these corporate platforms is of the highest importance. The corporate banks’ systems might face security and performance issues. Quality assurance services remove performance bottlenecks and address the security issues of corporate bank accounts.
  5. Test Automation – The customer needs faster access to financial applications. But it is impossible to release financial applications in the market without thorough testing. For a data-intensive applications like financial apps automation testing is an easy solution. Automation testing significantly reduces time to market and money. It enhances accuracy and team productivity bringing the application nearer to customers faster.
  6. Regression Testing – Corporate banking applications undergo frequent changes in application functionality. Regression testing in the corporate banks is necessary to ensure that the existing application features remain unscathed with new additional changes.

Comparing QA services in retail and corporate banking

Even if on the surface, we do not see many differences in QA service for retail and corporate banks, there will be a significant underlying difference between the QA services of both banks. The systems in both banks require thorough end-to-end testing. Retail banks have a high volume of transactions, whereas corporate banks focus more on value. Performance testing for the systems in retail and corporate banks is essential, but in retail banks, the requirement is more intensive than in corporate banks.

Risk-based testing is important to validate the systems in both banks. But since corporate banks emphasize more on value, it is critical to maintain the risk index score matrix for corporate accounts. The systems in both the banks are validated based on the risk parameter like regulatory, financial impact, customer servicing, operations, and systems risk. For value-intensive accounts like corporate banks, the parameter of the risk score will be higher. Corporate banking handles many critical transactions, where the risk factor will always be on the medium to high scale as compared to retail banking, where the risk factor will be low to medium on the risk scale.

Since corporate banking combines several services to form a package, microservices testing is essential for corporate banking. Testing of corporate banking systems requires both banking and testing expertise to segregate between the intensity of test case scenarios. Corporate banking offers services like trade finance, supply chain finance, and more that require extensive testing to ensure error-free performance. The regulation impact is higher in corporate banking and testing corporate banking systems is tougher and impossible without adequate domain and testing knowledge. Corporate banking is more requirement based as compared to retail banking.

Retail and corporate banking both have a digital impact. Retail banks have undergone a digital transformation of their front-office and back-office processes. Whereas corporate banks are digitalizing their workflow in front-office, mid-office, and back-office processes. In the process of ensuring the security between value and volume, corporate banking has complex system architecture, which requires a specialized risk team to ensure the platform security.

Conclusion

Testing the systems in both banking segments requires specific knowledge about the platform, modules, and technologies used in retail and corporate banks. If a team has to execute testing for systems in either of these two banks or the exclusive part of the retail segment in corporate banks or exclusive corporate services in retail banks, they must have adequate knowledge to differentiate between the critical aspects of testing the systems in retail and corporate banks. 

At Yethi, we have a combined industry experience of more than 30 years. We have executed functional (functional acceptance, user acceptanceintegration, regression, UI/UX) testing and non-function (performance, usability, security, data migration) across more than 22 countries globally. Our testing centre of excellence (TCoE) is formed with domain and testing experts who have successfully offered services and transformed business for more than 100+ clients.

Our 5th generation robotic test automation solution, Tenjin, can be integrated with a major banking platform. This intuition test automation solutions speed up your testing process, reducing time-to-market and money. Our QA services are a combination of tool-based and solution-based, always ensuring the quality of your banking platform.

Steps Banks are taking towards Digital Transformation Journey

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The digital transformation journey is gaining momentum in the banking and financial industry. But when did the journey first start? As per a Gartner report, 69% of organizations believe that the Covid-19 global pandemic has accelerated the digital initiatives, 60% have increased the focus on improving the operational excellence through digital businesses, 50% have increased the focus to drive higher levels of cost optimization through digital initiatives, and 48% are investing on digital initiatives. Covid-19 may not be the sole reason for the growing digital business, but it has sparked the growth.

Banks are adopting new technologies on their digital transformation journey. They are taking every step to digitize the services and move processes online. Banks are also accommodating backend changes which is an essential step towards digitalization and supports the transformation. Any digital move is incomplete without ensuring security against scams and fraud risks. Banks initiate many digital moves but eventually strive to succeed or manage the pace. It is because they lack support or skill in many aspects, which are essential to compete with digital-native solutions. Digital transformation does not end with the integration of digital systems. It is a move that includes meticulous attention to ensuring user experience, security and performance of applications, monitoring infrastructure and more.

In this article, we will explore the objectives and goals banks and financial institutions are setting up for themselves and the steps they are taking toward the digital transformation journey.

Goals and objectives for digital transformation journey in banks and financial institutions

The digital transformation journey of banks and financial institutions did not start overnight. There was a pre-conceived idea behind such a revolution. Banks and financial institutions envisioned their goals and objectives before their journey. Let’s explore them one by one.

  1. Improving customer experiences

Customer requirements have changed with the passing years. Today, customer demands quick and easy solutions. They require digital solutions (mobile devices & digital apps) integrated with new technologies, improved use of data and analytics and more. It enables the customers to get the exact services quickly whenever they want them.

Consumer behavior has changed the way banks look and offer services to their customers. Banks and financial institutions are customizing digital solutions to create digital engagement for customers of different segments, based on the factors such as age, preference, location and more. Consumers have moved to digital platforms from the traditional model of banking services, which facilitates digital transformation.

Consumer’s changing needs are compelling banks to re-evaluate the services and future scope of the branch network. Banks are increasing their digital footprint by moving the branch footprint to a digital platform. They are aligning the services to meet consumer behavior and building new omnichannel sales and service models. Based on consumer trends, they are enhancing cross-channel marketing communications.

  • Improving time and team efficiency

As the digital footprint is increasing, branches have lesser footfall. The banks are offering their services on the digital platform. Even the critical transactions are done using digital platforms. Organizations like banks and financial institutions are investing in the digital transformation journey and improving time and team efficiency. The investment includes expanding the talent base using training and cross-functional deployment to ensure that organization can save a significant amount of time from project initiation to completion.

Domain & application knowledge is critical to facilitating the digital transformation journey of an organization. Many organizations, so far, have been using legacy systems. Handling and managing the system workflow requires hard skills & knowledge. As the process changes by adapting to digitalization, organizations are putting more time and effort into building strong management and highly experienced project teams. Organizations are moving beyond the traditional outlook of using legacy systems. They are adopting digital frameworks to ensure using technologies to their maximum benefit.

Organizations are currently focusing on process and coverage repository. After undermining investment in tools and training for so long, organizations realize the importance of investing in tools and training. They are investing in training employees to be more skilled to keep up the pace of digital transformation. Organizations need the most effective solutions to help them with the quality product launch and faster time to market. 

  • Using modern technologies for maximum advantage

The digital transformation journey is incomplete without development in technologies. Organizations are harnessing the unconstrained potential of technologies and digital solutions. But it is not just about digital solutions; digital transformation involves other aspects of the organizations too.

Modern digital technologies are crucial to transforming the process of organizations. We need a solid technical team to unleash the potential of digital solutions. The entire digital transformation process includes outstanding digital solutions and a competent workforce to handle them. Thus, technology and people work together to transform the organization digitally.

The organizations aim to reduce the time to market quality products, change the approach of the operation, and deliver value to customers. The organizations are deploying new technologies in all their business areas. Banks are among the pureplay in embracing new technologies. Since increasing competition threatens the stability of the banks continuously, they cannot help but emerge much stronger digitally with time. From customer onboarding through video KYC to 30-minute paperless loan approval and virtual customer assistance, banks and financial institutions are leveraging digital technology to their maximum benefit.

  • Promoting Innovation

Innovation is the key to the digital transformation journey. Organizations have come to terms that to move ahead with the digital transformation journey, they must innovate. As digital transformation and innovation are interconnected, innovation drives digital transformation. Hence, in the digital transformation journey organization must be open to an innovation culture.

Let’s consider the Pandemic scenario. As per a report, 70% of complex and large-scale organizations failed to reach their digital transformation goals. Organizations now have an understanding that it is critical to embrace innovation in the digital transformation journey. Thus, banks are changing their ecosystems by promoting innovation to drive a successful digital transformation journey.

Banks and financial institutions are changing the work culture and ecosystem, encouraging employees and consumers to try new technologies and innovations. The changing customer requirement plays a massive role in strategizing the digital transformation goals for the organizations. Technology empowers people and processes to add value to the customer experience. Hence, enterprise solutions are more innovative at the current time with the latest technologies to ensure an outstanding customer experience.

  • Updating process and systems

There are many organizations which still use legacy systems. Organizations spend 75% of their IT budget on supporting legacy systems. There is only 25% of the IT budget is allocated to digitalization. One of its many goals and objectives for the digital transformation journey in banks and financial institutions is to shift the budget allocation to digitalization.

Banks and financial institutions are building strategies for digital transformation. Many banks are digitally transforming the front-end and back-end processes completely. The banks and credit unions are rapidly adopting digital solutions to keep up with the pace of marketplace changes, and many firms are moving to cloud computing and adopting agile principles. It helps processes with enormous amounts of data and insights in real-time and reduces costs.

However, some banks and financial institutions store a massive amount of data on their old legacy systems. The modernization of these legacy systems would either take longer than the anticipated time or would be impossible to migrate. Many enterprises have found solutions to this issue. They have digitalized their entire front-end process while operating a few back-end processes through their legacy systems. 

As a part of their digitalization goals and objectives, organizations are integrating various technologies like Cloud computing, mobile technologies, advanced analytics, cybersecurity, etc. The strategy has enabled financial institutions to offer superior digital experiences to their customers. The digital transformation journey is more of an inside-out approach that focuses on speed, ease of use, and user experience.

  • Preparing the team for the digital transformation journey

The bank’s digital transformation journey is more than using the most updated technology or digital applications. It is about how prepared you are to adapt to the changes. The banks and financial institutions’ goals and objectives are to prepare the team for the digital transformation journey.

Hence, organizations must focus on informing the team about the positive impact of adopting digital technology. The banking and financial ecosystem is changing, and technology plays a significant role in offering value proposition, greater efficiency, and higher profitability.

Steps banks are taking toward digital transformation journey

Being an integral part of banks’ transformational journey, we have seen a few steps that banks are taking towards digitalization. Below are a few instances.

  1. Banks have been undergoing massive digital transformation in the last couple of decades. They are transforming the entire banking workflow and moving the current manual processes into the digital mainstream across all banking verticals and multiple business portals. By now, banks have digitally transformed 40% of their banking workflow, but 60% of the workflow is still manually done. Since the effect of the Covid-19 global pandemic, banks can no longer delay their digital transformation journey. Hence, they are speedily adapting to the changes around them.
  2. Trade Finance has been essentially a back-office platform. However, due to Covid-19, many organizations decided to digitalize their back-office processes. Banks realized the necessity of streamlining the process to seamlessly work with front-office, mid-office, and back-office workflow transformation.
  3. Banks are moving all credit lending from non-system to digitalized workflow systems. Banks have introduced digital platforms to handle the end-to-end lending process, from loan onboarding and video KYC verification to the collection process.
  4. The banking industry is moving to the web, online applications, and mobile applications from branches. Mobile applications are improving the speed, making the process simple and enhancing user experience with continuous service.
  5. Banks are integrating the latest technologies like automation and AI with their online services. Many banks and Credit Unions are integrating these technologies into their service line and functions as robotics and AI technology improve the online services. It allows banks to save money, improve the solutions, and delegate their people to other important assignments.

Conclusion

Typically, a bank’s transformational journey is two ways. The broader categories are application upgrades and new implementation. As we were a part of a transformational journey for multiple banks and financial institutions nationally and internationally, we have executed end-to-end testing and supported the banks in their transformational projects helping them to go-live within strict project deadlines.

We follow a managed testing framework for the transformational projects of banks and FIs. From gathering functional and non-functional requirements, designing, and rescheduling projects, to managing code installations, release notes, and test data. Our process flow includes strategizing, planning, preparation, and execution. We define metrics based on defects management, test effectiveness, test efficiency, and test coverage. We also track defects, test efforts, status, schedule, risks, and issues.  

Our end-to-end testing services include requirements assurance, integration assurance (application suite & system landscape), functional assurance (pre-migration & post-migration), non-functional assurance (performance testing, security, and usability), and test automation, pre-launch testing, regression testing, and testing CoE.

Digital payment in the banking ecosystem and managing fraud risk

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Countries believe there is unfathomable growth of digital payment in the banking  ecosystems. In fact, many countries are including the plan to boost the digital payment ecosystem in their budget report. India, for example, has a plan to offer financial support for the digital payment ecosystem, which is included in the Union Budget 2022-2023. As per a report in Statista, “total transaction value in the Digital Payments segment is projected to reach US$8.50tn in 2022.” The report further highlights that “total transaction value is expected to show an annual growth rate (CAGR 2022-2026) of 13.10% resulting in a projected total amount of US$13.91tn by 2026.”

Let us discuss some of the distinct global digital payment features. Digital payment allows instant money transfer between wallets and different bank accounts in seconds. It helps in easy bill payments, both prepaid and post-paid. Users can also manage physical and virtual card operations without any issues. Digital payment services help in easy merchant payments using contactless technologies like (NFC codes and QR code scanners). Digital payment platform uses multiple technologies like tokenization, passwords, biometrics, security questions, point-to-point encryption, out-of-band authentication, and one-time password (OTP) via SMS to protect digital transactions. A lot is happening in the digital payment platform, which requires strict attention to follow the security guidelines.

Background of digital payment

Organizations have seen the challenges associated with maintaining the platform security for the digital payment platform. The scope of digital payment is not the same as it was in the mid-1990s when Stanford Federal Credit Union offered the first online payment systems to clients as a first organization. Today, digital payment systems provide services in various fields. From money transfer to bill payment and loan origination, the digital payment platform handles multiple services.

Millicent and Ecash were the first companies to launch digital payment in 1995 and 1996, respectively. They specialize in digital cash, e-money, and tokens modes of digital payments. The emergence of PayPal in 1998 changed the digital payment trend completely.

Digital payment in the banking ecosystem

The massive technological development in today’s era has led to the growth in online shopping, banking, and other services. The digital payment structure has seen significant expansion in the past few years, and it is further accelerated with mobile devices. As per a report in Statista, 950 million users carried out mobile payment transactions globally in 2019. And the projection says there will be a whopping growth of 1.31 billion users by 2023. Amidst all these growth and developments, the organizations have much to worry about the platform security, performance, functionality, accessibility, and usability. Organizations must establish a strong foundation and control over the digital payment platform if they have to manage the unrelenting growth of digital payment.

To initiate and encourage the growth of digital payment, banks are embedding futuristic technologies like AI, Machine Learning, IoT, and Robotics with their products and solutions. Digital and contactless payment have increased in the recent past. Not just in the major cities, the smaller cities are also adopting contactless payments. Users can carry out transactions by simply scanning the QR codes or in a single swipe.

Banks are collaborating with multiple digital payment platforms and third-party platforms to extend their services beyond the conventional banking systems. The tap-and-go payment options have enabled many vendors and retailers to embed the advanced technology into wearable devices that allow consumers to purchase products and services using smartwatches, smart rings, and wristbands. The only concern is how secure these devices are. To put all speculations to rest, retailers and vendors are doing enough to ensure the platform’s security by eliminating anomalies and errors from the payment platforms.

There is an increase in e-commerce transactions. Restrictions on movement during the Covid-19 lockdown could be one of the reasons but are not the only one. Banks have made their services available to the customers on digital platforms before Covid-19. But we cannot take away the fact Covid-19 has fast-tracked the process, and whatever was brewing beneath the surface has emerged strongly. Digitalization has changed the payment structure. E-commerce sites today have access to the user’s bank accounts. Banks are also collaborating with e-commerce sites to provide exclusive offers to consumers. The process has influenced people to rely on e-commerce to purchase groceries, health products and other essentials. The offers from banks and the benefits and advantages of these transactions have surpassed conventional buying and selling behavior. Hence consumers prefer to shop online and access remote commerce and digital payments.

Customers have payment flexibility using QR codes. It is easy to implement and use. The banks have integrated the services and made them available to their customers. QR codes carry transaction processes without any hassles saving significant time. Investment banks are adopting cryptocurrency to help people inspire to invest in digital gold. The financial market has seen a prominent surge in crypto investment, and it is evident that cryptocurrency is here to stay.

Fraud risk in digital payment

The growth of digital payment attracts multiple fraud risks as hackers are trying to gain access to customers’ personal and banking details. Following are the types of fraud risks that banks and customers are facing on a regular basis.

  1. Phishing – The scammers create identical bank website and send the links to the customers. The fake websites are used to capture user ID and passwords, Card numbers, ATM PIN, CVV, and OTP and misuse them.
  2. Vishing – It is a simple method where scammers use Voice over Internet Protocol (VoIP) technology to contact customers and seek personal and financial details over the phone.
  3. Smishing – Using this method scammers send text messages to the customers with links to call back, visit websites, download documents, and information about job offers, lottery wins, ATM deactivated and more.
  4. Identity Theft – Scammers use different methods to acquire customer personal information date of birth, passport number, Aadhaar details, PAN details and more to access customer bank accounts and carry out transactions.
  5. Sim Swap Fraud – The scammers obtain customers’ detail through phone calls, messages, and more and get a new Sim card issued in customers’ names to carry out illegal transactions.
  6. Social Engineering Fraud – The scammers update fake number that resembles bank toll-free number on various digital platforms or caller identification apps to deceive customers. 
  7. International Transfer Scams – The scammers create fake stories and trap customers to share their personal and bank details. They use this information to withdraw a large sum of amount from customers’ bank accounts.
  8. Money Mule – This method is used to entice customers with attractive commissions. Once customers share their bank account details and personal information, the amount which is already stolen from one account to transferred to the customers’ account.  
  9. Juice Jacking – The scammers install the malware in public charging ports. If the customers do not have their own charging device and they happen to charge their mobile devices in any of the public charging ports, scammers can get easy access to the customers’ details stored in the mobile phones.
  10. Cerberus Trojan Threat – It is malware that steals customers’ banking details like credit card numbers, CVV and more. Cerberus efficiently captures screenshots, and get easy access to SMS text, contact lists, account credentials, and more.
  11. Covid-19 Phishing Threat – Covid-19 has been used by many scammers as an opportunity to steal and manipulate customers’ personal data and financial details bank account and debit/credit card details, CVV numbers and secret passwords to gain access to customers’ bank accounts.
  12. IDN Homograph Attack – The scammers can create and use a domain or website name that resembles an established name to trick the customers.
  13. Loan Fraud – The scammers trick the customers by publishing fake advertisements for quick and easy loans and offer them low-interest rates, easy repayment, or without any security needs.
  14. Online scams through the classified marketplace – The scammers create a fake profiles with fake social media addresses to contact customers who post their advertisements. They trick the customers to share their personal and financial details.
  15. Aadhar-based Payment System Fraud – The scammers can use the gums and glues to replicate customers’ fingerprints and use them to carry out transactions.
  16. Broadband Internet Security Fraud – The scammers may call customers to pretend that they are calling from telecommunication or internet services companies and ask for customers’ banking and personal details.
  17. SMS Spoofing – The scammers may call or text customers informing them about the KYC process being incomplete, debit and credit card being blocked or expired, SIM cards expired, accounts credited with a significant and more.

Managing fraud risk

The digital payment platforms need a high fraud detection mechanism. It is critical to have security measures, but it is also crucial to ensure the platform is functioning without any errors. Digital payment platforms must adopt a few security measures to establish a secure connection in a high-speed transaction process. Every secure website must have SSL certificates as it creates a foundation of trust. HTTPS is safe compared to HTTP as it avoids redirection links. It requires a digital certificate to establish the website as safe and secured, and HTTPS websites have security certificates.

The digital era is all about real-time payments, and the digital payment platform is driven by technology. Considering the amount of fraud in digital payment, fraud checks, authentication, authorizations, and data analysis must happen simultaneously. Banks are improving the API ecosystems to integrate their services into the third-party platform and make them available to the customers. As in the real-time payment, the sender and the receiver send and receive the amount at the same time; it is crucial to have the notification and alert of all transactions in place to limit the chances of data manipulations.

The digital payment platform is customer-centric; hence it must be customer friendly. Customers would not want to be pinned by unnecessary compliance requirements. But digital payment platforms cannot be open to cyber threats. Hence, the platform must follow the necessary security guidelines without overdoing them. In today’s world, digital payment platform follows blockchain technologies and are visible to the customer. This technology helps in detecting illegal transactions and malicious user behavior. Organizations are investing in technologies to tighten security knots and prevent monetary losses. Companies would not compromise on external and internal security.

As important as it is to maintain the security of the digital payment platform, it is also critical to test the platform end-to-end for seamless functionalities and error-free performance. Without an adequate testing solution, the platform would miss out on important alerts.

Conclusion

It is crucial to create a tenable cybersecurity framework and it is also important to ensure the integration, performance, accessibility, and usability of this framework. Organizations must adapt to digital channels and platforms to retain their customers. Digitalization is making it easier for organizations to acquire customers and serve them digitally. Accessing funds and payments is becoming more convenient.

The organizations need support to promote and build products with the right features and capabilities. The banks see growth in their ROI when the people use these digital platforms. Organizations would witness a significant cost reduction in delivery when people use the platform for many years. Digital payment testing is a method to validate the platforms’ sustainability and tenacity for long years.

User experience is the most vital point as the users’ attention span is less, and any unsatisfactory designs would bring down their interest leading to the lowering of companies’ investments. The usability and accessibility of the digital platforms are the parts that the organizations must focus on. Testing the platform ensures customer experience with the UI design, platform usability, and accessibility. We have seen clients coming back with requests to understand if their application performances are consistent across multiple devices and operating systems. As banks are slowly moving to multi-channel from mono-channel, which means that banks are interacting with their customers and offering services on multiple channels. Hence, integration, performance, functionality, and security are the most essential areas that require adequate validation.

There is a significant growth in API channels as in Yethi, we have witnessed several instances where banks had requested upward of a thousand APIs to their partner networks. Our partners have contacted us to build an infrastructure that could validate the APIs. The CIOs may face challenges if somebody releases a patch set in a multiple-interconnected network, which could lead to disruption of ongoing processes. The banks need to ensure their reputation as any of these instances could cause heavy damage to their business flow.

Transaction Banking Evolution and Testing

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Transaction banking plays a significant role in the functioning of corporate and banking institutions to allow a smooth and safe flow of cross-border transactions, trade financial deals, mitigation of risks, cash flow management services, and security services. Transaction banking improves the relationship between banks, customers, and partners. It offers treasury solutions allowing a safer, secured, and effective flow of cash and financial securities across the international financial systems. It facilitates trade finance and offers cash flow management and securities for public and private entities.

The services of transaction banking are cash management services, online services, trade finance, and security services. Cash management service is a part of transaction banking that entities offer as a solution to manage the cash inflow and outflow effectively. Through online services, transaction banking provides a single point of cash access, trade, and security services to help streamline the workflow process for corporate, institutions, and small-medium enterprises. Transaction banking services for trade finance offer a range of global trade finance deals, including import and export services, buyer and seller financing, and open account receivable management. Through security services, transaction banking aims to improve the services and relationships between banks, clients, and partners.

In this article, we will explore why there is a surge of technology and innovation in transaction banking. We will track the evolution of transaction banking and highlight the business and regulatory issues. We will also investigate the scope of testing the transaction modules in banks and examine the products that are covered in testing the transaction modules and platforms.

Technology and Innovation in Transaction Banking

There is stiff competition in transaction banking that arises with changes in the regulatory compliances. With changes in regulatory requirements, banks and vendors are making considerable investments to remain competitive and ensure the quality of transaction banking platforms.

The banks no longer build their proprietary solutions. Instead, they rely on technology vendors to deliver corporate solutions. It significantly reduces costs and frees the internal resources to focus on more value-added services. Banks are investing to make the data easily available to companies and help them achieve straight-through reconciliation. Banks are focusing on collaborating with external vendors for payments. Mobile payment systems are emerging which is evident from different mobile payment platforms collaborating with Google, MasterCard, and Sprint.

Transaction banking is changing the relationship between banks and their technology vendors. Banks are improving their collaboration with the technology vendors to ensure that they offer quality banking services to the customers. Banks are utilizing the technology to the fullest to make their services flexible. With the inclusion of mobile technologies and Cloud services, banks are evolving and improving their services; banking services without these recent technologies now seem incomplete.

Evolution in Transaction Banking

Banks have reorganized their internal operation to improve different transaction banking units. The current structure unifies cash management and trade finance activities. The evolution of transaction banking has had a significant impact on the banks’ service lines. The quality of products and services like trade finance, payments, supply chain, cash management, liquidity management and more are now improved with the technology used for transaction banking.

Large corporations are using the effect of globalization on the economy to manage their cash and liquidity. They have standardized their finance processes by creating regional shared service centres and executing centralized back-office systems across regions. The earlier payment factories that used to process payments have now evolved into extensive corporate transaction banking systems utilized to manage the transaction flow between the partners, banks, and clients. Technology has helped corporates to manage and use their internal cash flow more efficiently. They have improved the visibility of cash transactions. But one area that can be challenging for treasury is to gain access of the cash once it is identified.

The situation can be grave in the countries where there are some rules imposed on tax. It prevents the easy movement of liquidity outside of the country. To facilitate this movement there are many large cash management banks present across countries that advise their clients and leverage the network to offer them value-added services. It offers greater visibility to the corporate treasurer over their cash status. They can manage the cash movement and access the cash without being worried about adverse situations. The organizations can reduce the need for short-term borrowings by up to 30-40%.

Working capital is extremely important for organizations since the liquidity risks can turn an organization into bankruptcy and counterparty risk is rising high. It is not just enough to have funds for a corporate they must manage the funds to make it more accessible and visible.

Liquidity Risk & Counterparty Risk

Liquidity risk and counterparty risk are the two common types of risk that transaction banking face. When an individual investor, business, or financial institution cannot meet their short-term debt, it raises the concern of liquidity risk. On the other hand, counterparty risk arises when the second party in credit, trading & transaction, and investment cannot fulfil their role in the deal and becomes a defaulter in a contract. An effective liquidity risk management and counterparty risk management program help banks meet their obligations to pay within due dates to avoid adverse scenarios.

The Scope of Testing Transaction Banking

The scope of testing transaction banking is spread across the area of its services. The service line of transaction banking is the flow of cross-border transactions, trade financial deals, mitigation of risks, cash flow management services, and security services. The scope of testing transaction banking includes testing the cash management, payment transactions, supply chain finance, collection and receivables, trade finance, and back and front office transaction banking modules.

Transaction banking is available through multiple sources and channels. Testing transaction banking includes testing the transaction origination medium like bank branches (back office and front office systems) and channels (internet and mobile).

Yethi’s Testing Approach and Methodologies

At Yethi, we have worked with some of the major national and international banks. We have tested prominent transaction banking applications. From User Acceptance test design & execution to regression testing and performance testing, we have conducted end-to-end testing of different transaction modules. We have also executed security testing of all the transaction banking applications.

We have tested the following modules,

  1. Payments
    1. NEFT/ RTGS/IMPS
    1. Bulk Transfers
    1. A2A Transactions
    1. UPI/NACH-based transactions
    1. Instrument Series
    1. Tax Payments
    1. ECS
    1. Products Maintenance
  2. Supply chain Finance
    1. Vendor Finance
    1. Dealer Finance
    1. Payable Finance
    1. Receivable Finance
    1. PO Finance
    1. Reverse Factoring
    1. Export Factoring
  3. Collection and Receivables
    1. Collections
    1. EOD BOD Reports
    1. Receivables
    1. All other Reports
  4. Trade Finance
    1. Bill Collection,
    1. Letters of Credit,
    1. Bank Guarantee
    1. Open Account for Trade,
    1. C2C Transactions for Trade
    1. B2C transactions for Trade

We follow strategic testing methodologies and execute testing in phases across different modules like Payments, Supply Chain Finance, Collections and Receivables, and Trade Finance. Our testing method includes identifying various business processes in the bank and customizing software based on the volume and value of transactions supported by each process.

Our testing focuses on the processes deemed to be at high risk, based on an algorithm built in conjunction with the bank. We design and execute test cases based on our analysis. We offer end-to-end and improved test coverage across all the modules and products in transaction banking. We help banks in identifying the defects at the early stage, thereby minimizing the defect leakage risk. We detect rare issues and errors and increase the overall productivity of the application.

Mambu – A comparative study with other prominent CBS platforms

There has been a progressive shift from Banks and FIs towards more nimble and agile digital platforms, this facilitates them being more effective and efficient in the ways to serve their customer whilst allowing them to be more flexible in rolling out new products and services.

Mambu focuses on offering Banks and FIs a seamless online banking experience. Mambu is a SaaS-based Core Banking Platform that puts digital customer experience at the core of its banking and lending solutions.

Being born in the Cloud “Mambu” is created to empower the banking and financial industry with digital-first technology making the platform easily implementable. It started its journey by offering services to microfinance institutions and fintech start-ups. Mambu was founded in 2011, and today, 478 organizations in 51 global countries have adopted Mambu as their Core Banking Solution.  The latest offering includes corporate lending and payment services as well.

In this article, we will compare Mambu with other prominent CBS platforms.

Mambu vs Temenos Transact

Temenos being rich in its offering of system functionality and built with relevant technology offers a diverse range of integrations with ancillary systems. The platform is built for retail, corporate, and private banks to manage transactions, risk, enterprise credit, and more. It caters to the customer profiles like retail, corporate, universal, private, Islamic, and microfinance & community banks. Temenos solutions include Temenos Infinity – Digital Front Office, Temenos T24 Transact – Core Banking, Temenos Payments, Temenos Infinity Wealth, and Temenos Fund Management.

In comparison, Mambu is fairly a new core banking solution. Nevertheless, is growing fast to be a preferred partner for Banks on the lookout for their Core banking transformation. Mambu association with top-notch organizations to help them design, launch and scale digital-first banking and lending services. It is a platform built from the Cloud upward and is proving to be a cost-efficient alternative to expensive and complex conventional core banking solutions.

Being on the Cloud is one of the benefits among all others. Mambu also provides tools to its customers to build, integrate, and launch all lending portfolios. Its customer profile includes p2p, marketplace personnel, SME lenders, deposit-taking institutions, and mobile banking providers. The Mambu solutions are Composable banking, Cloud banking platform, and Mambu Process Orchestrator.

Mambu vs FLEXCUBE

FLEXCUBE has been a great option for the Banks and FI’s alike due to its association with CITI in the initial days and now after being owned by Oracle. It has front-to-back digital capabilities that help banks and financial institutions to innovate and create next-generation technologies for digital customer experiences. FLEXCUBE helps in generating improved insights and enhancing STP as it has access to advanced automation tools, which are supported by MI capabilities.

In contrast to Mambu’s customer profile, FLEXCUBE’s customer profile includes Universal, direct, private, and Islamic banks, and financial and lending institutions. Also, FLEXCUBE has been empowering the business of their customers with the solutions like Core banking software, Enterprise limits, Collateral Management, Investor Servicing, Financial Services Lending and Leasing.

Mambu vs TCS BaNCS

TCS BaNCS solutions focus on Digital First, Cloud First philosophy to support the fast-paced digital world. The TCS BaNCS product suite is developed to help financial services institutions become more agile, innovative, and intelligent by leveraging the cloud and digital ecosystems. Its Global Banking Platform offers business support with products and services across assets and liabilities, cash, securities, and crypto-assets. While Legacy systems struggle with the accelerating growth of digitalization. It empowers the overall ecosystem with a rich catalogue of APIs.

Mambu is used by the Credit Union and multi-branch set-up. It is used for online banking, retail banking, and private banking. Like Mambu, TCS BaNCS also supports multi-branch setups and Credit Union. In addition to online banking, retail banking, and private banking, TCS BaNCS can be used for Compliance Tracking, Corporate Banking, Credit Card Management, Investment Banking, Risk Management, Securities Management, and Transaction Monitoring. In the banking category, TCS BFSI platforms have 534 customers in 48 countries, while Mambu is implemented by 478 customers in 51 countries.

Mambu vs Finserv DNA

DNA® from Fiserv is a Core Banking Solution with an open architecture. It offers a wide range of customization and enhancement options through the DNAcreator® toolkit and AppMarketTM. DNA enables easy integration and customization; and as it is based on open architecture, it offers flexibility to add third-party or customize the platform to suit your requirements. DNA improves operational flexibility by enabling real-time data backup. It delivers real-time performance by executing and storing transactions as they occur.

Real-time data performance ensures the information is updated consistently to support rapid data analysis. DNA offers an enhanced user experience with intuitive and touch-enabled features. The improved user interface allows ease of use and improves efficiency for users across various devices and OSes. DNA is fully integrated with corporate banking solutions that empower all banking operations. In banking categories, Finserv DNA has 100 customers in 6 countries in contrast to 478 customers in 51 countries for Mambu.

Mambu’s SaaS model supports tier-one banks to fintech start-ups. It is developed from the cloud unlike other core banking solutions. DNA has a TransactionExpress feature that helps users with quick multiple transactions. It also allows multiple transactions to multiple accounts from a single screen. DNA teller capture option and allows users to image, process, balance and verify checks and other documents immediately — right at the teller line – to gain quick access to external funds without handling a transaction more than once. Mambu and Finserv both have component-based architecture, but as per a Gartner report compared to Finserv, Mambu has better interoperability and functional granularity.  

Mambu vs FIS Profile

FIS designs and implements a fully integrated core system with critical components to transform existing investment in the community, mid-tier, large and global financial institutions. It aims at meeting customer needs, regulatory changes, and competing with alternative providers. FIS is the main repository of data used for financial management and reporting functions. The functions of FIS are, to record financial transactions in GLs, generating financial reports to meet management & statutory requirements, and control overall spending through budgetary control embedded in the systems.

As per a Gartner Peer report, Mambu wins an edge over FIS in terms of interoperability and functional granularity. The report also reveals that Mambu has better experience compared to FIS while catering to Small, Midsize, and Large Bank Segments. Mambu can be easily integrated and deployed as compared to FIS. In terms of quality of end-user training and ease of integration using standard APIs and tools, Mambu is a clear winner.

Mambu vs SAP Transactional Banking

SAP Transactional Banking for SAP S/4HANA is an open core banking platform designed for retail and corporate banking and based on an architecture that ensures real-time processing and continuous availability. It provides a wide range of functions for retail and corporate banks of different sizes; and enables users to manage the contract-related master data, along with maintaining, controlling, and monitoring the use of collaterals.

It defines integration patterns for connecting to a payment transaction system, a collateral management system, or a sub-ledger system, archiving the relevant business objects, automating the manual processing tasks, and mapping the relationships between receivables, and collateral assets, collateral providers, and collateral assignees. Its features include exception handling, data protection, up and downstream integration, data lifecycle management, and archiving capability.

Mambu SaaS model supports both tier-one banks along with fintech start-ups. Being cloud up, unlike other core banking solutions.

Mambu vs Avaloq Banking Suite

Avaloq is a Swiss-based leader in core banking software and digital technology founded in 1985. They provide SaaS and business process as a service (BPaaS) solutions to banks and wealth managers. With a strength of over 150 clients with USD 4.5 trillion in assets managed with their flagship software product. Their default approach is cloud-native, offering flexible deployment options for core banking.  Their standalone digital products are also cloud-native and cloud-agnostic, enabling efficient operation on any private or public cloud.

Avaloq helps in wealth and investment management by offering specialized knowledge and software to clients. They leverage automation to manage, protect and grow wealth and help private banks by bringing flexibility to their offerings. Avaloq is designed for retail and commercial banks by operating a traditional branch network and boosting online services with a fully digital experience. It also offers tailored services for challengers & neo banks by speeding up business launches. It uses cloud-based solutions to scale up business processes faster.

As per Gartner Market reviews, Avaloq and Mambu both have 4.2 ratings. While Avaloq wins an edge over Mambu serving the Midsize Bank Segment, Mambu is ideal for Small Bank Segment. However, Mambu wins by .1 in interoperability and functional granularity. Mambu serves the Large Bank Segment, while Avaloq could not make it through. Avaloq has a better requirement understanding and pricing flexibility. But Mambu offers ease of deployment, quality end-user training, and ease of integration using standard APIs and tools. Mambu also has easy availability of 3rd party resources. Compared to Avaloq, Mambu offers quality technical support, while Avaloq has a quality peer user community.

Mambu vs Intellect Global Universal Banking

Intellect is a popular financial platform for Corporate Banking, Retail Banking, Brokerage Solution, Treasury Management, and Insurance Software. It helps banks and businesses to grow in their wealth. Intellect is designed for transaction banking and supports corporate banking & global payments to grow their business. Intellect is a highly rated practice management solution that can handle billing, scheduling, and multiple automated tasks.

Mambu, on the other hand, is the world’s only SaaS banking platform that helps banks evolve by offering future-ready technology. Mambu is designed for banking convenience by simplifying plugin integrations, streamlining, and automating customer journeys. With Mambu, there is no need for coding and customizing as it has an option to configure and integrate, and Mambu is good to be used. It is used on the cloud instead of on-prem deployments, which helps organizations to constantly improve instead of being stuck into a painful cycle of enduring major and disruptive releases. It is interesting to note that as per a report, Intellect is ranked 10th while Mambu is ranked 4th in Core Banking Software.

Mambu vs Finacle Core Banking Software

Finacle is a cloud-based banking solution that helps financial institutions to digitally enhance their core banking capabilities. Developed by Infosys, the platform is used by banks across 100+ countries and serves 1 billion end customers worldwide.

Finacle offers a comprehensive set of products that accelerates organizational growth with innovation. It has open APIs, embedded with customer insights, and a real-time processing engine making it an ideal choice for modern banking. Finacle is a highly modular solution designed to speed up the production of new products and accelerate digital adoption. It delivers faster, safer, and fully personalized core banking services.

When compared to Mambu, Finacle’s customer profile is spread across retail, corporate, universal, community, and Islamic banks; lending and payment providers, while Mambu has alternative lenders (p2p, marketplace personal and SME lenders), deposit-taking institutions, and mobile banking providers. Mambu solutions are composable banking, cloud banking platform, and Mambu process orchestrator. Finacle has corporate, retail, universal, community banking suites, payments connect, and a digital engagement hub.

Wrapping up – Mambu has come a long way standing its ground and competing with some of the top names in the Core Banking space, but its journey so far has been remarkable and something that needs to be noted. Mambu has been successful in finding its own place and supporting Banks and FIs on their digitization journey in such a short span of time.

To conclude, Mambu is successful in standing shoulder-to-shoulder with the established names in the BFSI domain.  

How 2020-2021 pandemic has shaped the test automation landscape?

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The world had come to an abrupt halt with the outbreak of the Covid-19 pandemic, but there was a sudden surge of innovation. Organizations in various sectors realized that to deal with the adversities of this crisis, they must innovate new ways to sustain their business. We adopted various digital platforms to interact and grow with the exchange of services and offerings. But ensuring the quality of these products, services and offerings remained a decisive point. 

We are all aware of the importance of testing. It is known to all that testing plays a vital role in ensuring system quality. Organizations are extremely vocal about the incompleteness of quality assurance without appropriate and adequate testing practices, structure, tools, and plans. Did the testing process come to an abrupt halt due to the outbreak of the Pandemic? No, it did not. In fact, organizations found different channels to facilitate the testing projects. As the old saying goes, “necessity is the mother of inventions”. 2020-2021 pandemic became a driving force to innovate for quality assurance.

Pandemic surely had some negative and positive impacts on digital transformation. But that did not refrain people from trying out new solutions and remedies to their problems. Let us look at some of the positive and negative impacts of digital transformation that organizations had to face during the global pandemic.

Positive impact of Covid-19 in digital transformation

There has been a tremendous change in the way people work, think, and act. They have learnt new techniques and how to put them to use. The digital transformation has made people adapt to the changes. They have learnt to think out of the box and try new technologies. Digital transformation has facilitated remote working, and employees know that they can still be productive and efficient even while working remotely. The new work structure is like, “give us the facilities and new technologies, and we will innovate from there”.

Negative impact of Covid-19 on digital transformation

What seemed like a positive development for some were unfavorable for others. Covid-19 came with certain restrictions on communication and physical interaction. Some of the organizations that followed an old school method could not evolve with the surrounding changes leading to the disintegration of their foundation. Many physical branches were closed down with the decrease in footfall, and their business moved to the virtual platform. It has become a strenuous task for the management team to bring their employees back to the office. Employees have learnt new ways of working it has become hard to drag their feet back to the office.

Testing before Pandemic

Software testing is an integral part of quality assurance, and organizations cannot put them on the back burner. Testing has come to the mainstream and is executed simultaneously with the development lifecycle. Organizations realized the importance of testing long before the outbreak of Covid-19 hence, continuous testing is included in CI/CD pipeline as an inseparable process. With the introduction of effective test automation tools, it has become easy and convenient to conduct and execute testing practices like regression, UI/UX functionality, integrationuser acceptance and more at a massive scale. But there are more test requirements, which need expert and skilled testers to execute them. It is one reason that even after innovating the most effective test automation tools, organizations still require manual testing. Hence, we have the best of both worlds and automation test practice is most efficiently supported by manual testing.

Testing before the pandemic was mostly conducted onsite, with a significant portion handled by the offshore team. The organization had the advantages of system architecture and an adequate bandwidth with an efficient technical team deployed onsite that helped them carry out the end-to-end testing process without any disruption. After checking the end-to-end testing process and the product release, it would not have made much difference for the technical team to be on the testing site. However, the maintenance of the software performance and quality assurance was largely done by the offshore team.

Testing during Pandemic

The testing team still maintained the right blend of manual and automation testing. But a few things changed during the pandemic due to certain factors. There were sudden restrictions on travel and human contact. People were working from home and remotely, and international travel came to an abrupt halt. The testing process, however, could not have stopped. Organizations realized that it is only wise to adopt remote or offshore testing as an option. As test automation is more improvised and integrated with high-end technologies, remote and offshore testing would be as productive as onsite testing.

The remote testing model proved to be extremely convenient as the organizations could save a significant operational cost while the testing team handled the technical challenges and adversities. The technical team overcame many challenges like time zone differences, travel restrictions, and time constraints, ensuring 100% success in handling the end-to-end testing project from offshore. The team paid extra effort to deliver the project with utmost competence and assurance that all the testing aspects were considered and that all errors were addressed well without fail. Organizations are more confident that quality project delivery is possible even with challenges amidst the crisis.

Testing after Pandemic

Organizations are more prepared to deal with crisis and keep their business as usual (BAU) functional. It is no longer about choosing a testing project model. They have two models and multiple testing strategies based on their specific project requirements. Automation and manual testing go hand-in-hand and are applicable for many testing projects. The testing of banking or financial applications is exceptionally vital. Hence, it is necessary to have the most updated test automation tool to combine with the right test strategies, planning, and practice.

Organizations would not forsake either offshore or onsite testing models. Instead, both the testing model would act as a support to each other. Applying offshore testing proved to be a winning game for many organizations, as they succeeded in implementing the testing project and reap the benefits of offshore testing. Organizations have saved time and costs by adopting offshore test project models. Onsite testing is advisable when organizations have the in-house digital testing architecture to carry out the testing project. It is critical to have a compatible set-up of in-house architecture for the onsite testing model.

Conclusion –

After years of flourishing by offering onsite and offshore testing models to many organizations, Yethi has successfully delivered and completed 9+ offshore testing projects globally during pandemic 2020-2021. We are a niche QA services provider and have years of experience in delivering onsite & offshore testing projects. Having expertise in offering end-to-end testing services across all the major core banking applications with functional areas like Liabilities, Payments, Assets, Trade finance, Treasury and more, we have worked with 90+ clients across 22+ countries. We have not let our clients suffer from this unprecedented global situation and provided complete support to help banks avoid any business disruption and be prepared for any potential impact.

Our offshore testing model is designed considering all aspects like project knowledge, time constraint, travel restrictions, time zone differences and more. Our onsite and offshore testing models are managed by expert consultants and supervisors and backed by highly skilled resources and maestros in testing and programming to ensure that the testing projects are efficient and cost-effective.

Our highly experienced testing & digital consultants understand the processes and technologies involved in digital projects & quickly scale capacity to meet the needs of your business. Our dedicated offshore and onsite team can continue the workload with proper coordination, creating a continuous testing cycle.

We address the challenges of business continuity through our efficient testing models. Our 5th generation robotic codeless test automation tool Tenjin is built with intuitive features and supports our QA services. It is a fast and scalable test automation platform and works flawlessly across multiple applications to provide accurate test results.

Rising Customer Risks in Digital Lending, how efficient test automation can help?

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The traditional lending process was time-consuming as the time for credit appraisal and disbursal used to be around three to four weeks, and the average time for account/money processing used to be approximately 60 – 70 days. In the traditional lending process, customers have complained that due to 30 days of the moratorium, the EMI would have started way ahead of the lending amount credited in their account. Often, customers used to opt for 6o days of the moratorium to avoid the inconvenience.

Soon organizations realized the need for digitalization to reform the lending process. Leading banks worldwide adopted digital lending to slash down the processing time to 24-hours. Digitalization brought a transformative change to the entire lending process. There has been a significant shift in end-to-end credit journeys, including the customer experience. Digital transformation has supported the credit processes. Digital transformation has improved revenue growth and achieved significant cost savings.

Digital lending allows customers to submit loan applications online. From applications, to documentation, verification and amount credited to your bank account, the entire process is carried out on mobile applications, and it takes less than a day to credit the principal amount to the customer’s bank account. From three weeks and 60-days, the time to cash is now reduced to 24-hours.

Rising customer risk in digital lending

Banks are enhancing the process by adopting paperless loan approval. They are automating the entire process to improve time and quality. But digital advancement has its own limitations. There is a rising concern for customer risk associated with digital lending. Customers share account details, personal information, credit history, and more on these applications. Hence, organizations must ensure that they maintain the stability, security, performance, and accessibility of these platforms.

The organizations are currently digitizing the credit and lending process. The banks are focusing more on improving customer experience by reducing the time taken for lending process. While organizations reduce the lending time, there is a major concern arising from customer risk. Let us look into the types of customer risks associated with the digital lending process.

  1. Multi-layered transaction process – The digital lending transacti0n is multi-layered as various lending services are outsourced to different entities. Multiple Fintech companies operate behind the operation to create a platform for transactions. As the customer uses these tech platforms for transactions, it becomes increasingly complicated in the cases of grievance redressal, like who will address the customer complaints, what actions should be taken and by whom to ensure that the services are more effective.

The platforms are integrated by embedded finance that forms a layer of services by different fintech modules. These platforms also work based on an algorithm that matches borrowers to lenders. While this algorithm creates efficiencies because several activities are performed simultaneously in a broader lending spectrum by outsourcing it to many Fintechs, there can also be certain drawbacks. If the borrower has appointed a defaulter as a guarantee, Fintech will address the loss. However, at the time of collection, customers will face many challenges.

  • Irregularity in information during loan origination process – The terms and conditions in the lending process are lengthy. The lending process becomes complex because not all organizations will have similar terms and conditions; some will have more than others. It increases the customer risk because customers may not have thorough knowledge and understanding of the repayment terms while signing the loan agreement. The customers may not comprehend the information like the interest rate, processing fees, overdue charges, annual percentage rate and more if not informed by the lenders. They would also not know the consequences of repayment delay, credit score impact, and implications of NPA.

Customers are also not aware of the payment recovery actions that organizations adopt. All this inadequate information makes borrowers make uninformed choices and affect their credit ratings. The loan disbursal is quick in digital lending, but without adequate information about the charges and consequences of non-repayment, the risk will increase.

  • Effects on unfavourable credit history – The previous point brings me to the current one that if the customers are not informed about the adversities of repayment delay or repayment overdue for months, it will affect their credit records. Most customers are not even aware that non-repayment or delays can affect their credit eligibility for future loans. Once the credit score is evaluated low, the customers must take multiple measures to rectify them or obtain credit approval to avail future loans. A low credit profile can lower the credit records making it difficult to apply for a new loan.
  • Lack of communication and transparency on assessment of creditworthiness – Digital lending, unlike the traditional lending process, which follows a thorough process of evaluation of customers’ credit profiles, does not engage in interaction with the customers, which is a requirement to analyse the customers’ creditworthiness. Digital lenders spend a lot of time on automated IVR, text messages, and social media advertisements to create awareness and push their services. Borrowers are not even aware of how the lenders have procured their contact details and credit history. It is not even clear how the lenders have evaluated the credit eligibility of borrowers. It creates a lot of confusion regarding whether it is spam or a genuine approach.

Like traditional lending, digital lending also considers two important aspects of the lending process; the customer’s willingness to pay and the ability to pay. While the first intention is evaluated through the customer’s previous credit history, the second intention is evaluated by the customer’s salary credited in the bank account, debit and credit history, investments, liabilities, and more. While applying for a loan, the digital lenders request access to contact details saved on customers’ phones. The lenders use this alternate data model to cross-verify borrowers’ credibility and positive intentions.

  • Lack of suitable assessment device – It is easy to avail of loans digitally as the processing is quick. But there is a lack of borrowers’ credit worthiness assessment that complicates the entire lending process. Often lenders provide top-up loans based on the timely repayment by the borrowers without a suitable assessment. This added loan sometimes may not flow well with the borrowers, and they may end up in high overdue.

The overdue reason could be the high-interest rates imposed within a short loan tenure. Several instances in the past highlighted that customers ended up being loan defaulters, and organizations had to contact them and force them to repay the loans. The collection process in digital lending happens digitally (mostly auto-debit). If customers miss one EMI, it will lead to a serious outcome, and lenders might look for alternative ways to recover the loans. Both borrowers and lenders face harassment.

  • Lack of grievance redressal – Digital lending lacks promptness in addressing customer complaints. In fact, the grievance redressal is not as quick as the loan disbursal process in digital lending. It also lacks transparency for customers, which their trust in digital lending. The digital lending ecosystem evolves multiple service layers offered by many fintech, making the customer interaction complicated and confusing and finally leading to failed redress. For most lending fintech, the only option for redressal is either through an integrated chatbot or WhatsApp chat sessions, which have certain limitations and do not always suggest adequate information. All these increase the intensity of redressal issues, and customers face problems.
  • Risk of compromised personal data – The unique selling feature of digital lending is how they gain access to customers’ personal data and use these alternate data for customer onboarding and credit appraisal processes. But it can be equally detrimental if the data points are sourced from external data agencies. Sometimes the borrowers sign two agreements in case the digital lending happens through a third-party service provider. In the above kind of agreement, the first signed agreement would be between the borrower and the lending app, where the lending app would be entitled to a different entity.  This structure allows the third party to gain access to customer data to collect all necessary information. These sourced data can be misused without the knowledge of the customers.

Why testing is an important digital lending platform?

Let us consider a scenario; you enter all your details, and suddenly the application stops responding with a notification message for you to close the application. You have to turn off the application, unaware of whether the application has recorded the details you have already entered. Or, you upload your documents and click your image, but the image does not get saved. The digital lending platform might have to contact the customer to inform about the missing information and ask them to upload all details again. Customers relate to the digital lending platform because of its seamless functionalities, easy navigation, superior performance, and security. If any of these is compromised and has errors, customers would not think twice about discontinuing using the application.

As per a report in Statista, “Digital lending is one of the fastest-growing fintech segments in India and grew exponentially from nine billion U.S. dollars in 2012 to nearly 110 billion dollars in 2019. It is expected that the digital lending market would reach a value of around 350 billion dollars by 2023”. We can imagine the growth of digital lending in the upcoming years with a 13.5% CAGR. The projected data give us an idea that the number of the digital lending platform will increase, which implies that it would need rigorous testing to ensure that the platform is top-notch without any technical errors. Each Fintech must also ensure that no organization loses their business to their competitors due to technical glitches of applications.

Let us investigate how efficient testing can improve the digital lending experience.

  1. UI/UX and integration – Customers seek platforms that are easy to use and navigate. Testing can evaluate a clean UI design and integration point to ensure that the customers enjoy a seamless experience of the lending platform.
  2. Performance – It is a massive turn off for customers if the application stops responding or if there is a performance error. Performance testing can ensure that the digital platform eliminates the possibilities of performance issues in the lending application.
  3. Accessibility and functionality – Customers relate to applications with easy accessibility and functionalities. They will not prefer using an application filled with features and functionalities. It confuses customers with the click-boxes and fields that do not allow them to navigate through the window command. Functionality testing helps detangle the application so that customers can easily access the applications and ensure that the platform performs at an acceptable standard.
  4. Security – Security is an important aspect of a digital lending platform. Customers share data with an expectation that the platform will maintain customer data confidentiality. The digital lending platform must ensure that the security of borrowers’ details is not compromised. Security testing can ensure that digital lenders maintain data security under the proper protocol.
  5. Regression – Changes, modifications, and addition to the digital platform are extremely frequent. Each change implemented in the application can harm the entire application functionality if not validated properly. Regression testing ensures that the new features are integrated adequately and correctly without disrupting the previous application features and functionalities.

Conclusion – Test automation is an effective solution to scrutinize the workflow of digital lending systems workflows. It validates the end-to-end process and saves time and effort for each implementation. Digital lending platforms have a high degree of inter-connectedness, which requires repeated testing to minimize manual efforts and achieve optimal coverage.

At Yethi, constantly upgrade and update your LOS and digital lending platforms to make them flexible and agile. The major challenge in testing these systems includes usability, performance, security, UI/UX, and Configuration. With Yethi’s robotic, 5th generation codeless test automation solution, Tenjin and deep domain expertise, the experts address the above challenges. Our team help banks and financial institutions drive their testing operation and ensure that their customers achieve their business goals within the stipulated timeline. Our intuitive solution – Tenjin, reduces 60-70% testing turnaround time.

Testing the fastest growing Financial Management Systems

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Financial transactions are a part of our daily lives. How we manage our assets, income, and expenses must all be recorded in a system. A business must see its present and future i.e., debit and credit accounting, to ensure that they are compliant with the industry’s accounting standards. It is the reason that every organization must have a financial management system to record the financial transactions and provide a genuine report whenever needed.

The least you would expect is not to leave your customers dissatisfied without a proper financial management system (FMS). FMS is software used by organizations to manage assets, income, and expenses. An FMS reduces accounting errors, maintains audit trails, and remains compliant with appropriate accounting standards.

A financial management system must have the following features to qualify as an appropriate system for every organization.

  • Maintaining the transparency of all payments and receivables
  • Calculating the asset depreciation over the time
  • Tracking the liabilities
  • Maintaining the data integrity and security
  • Updating the reports/records
  • Managing multiple bank accounts
  • Managing and repaying prepaid expenses
  • Reducing overall paper records and paperwork
  • Organizing income and expense statements and balance sheets
  • Maintaining the audit trail accuracy

Purpose of financial management systems

The purpose of the financial management system is to keep a complete record and help the organization determine how to acquire and distribute funds, make critical financial decisions, enhance profits, increase the company value, and maintain business stability. Financial management forms the core of every organization. The organizations use financial management systems to manage their income, expenses, and assets with the objectives of increasing profits and ensuring sustainability.

The responsibility of an effective financial management system is to improve the short- and long-term business performance. The software helps streamline invoice and bill collection, removing accounting errors, reducing record-keeping redundancy, and ensuring compliance with tax and accounting guidelines and regulations. FMS helps in quantifying budget planning and offering flexibility and scalability to accommodate change and growth.

As a part of growing financial management software, the software can also include features like supporting the creation of ad hoc reporting, month-end, quarterly, and year-end closing report generation capabilities.

Testing financial management systems

Financial management systems carry a massive responsibility of managing, tracking, and reporting financial decisions. Organizations cannot afford to go wrong with FMS. Organizations need support with strategic test designing, test planning, and test execution across the entire software development lifecycle.

The organization must consider different project stages to ensure maximum quality at different stages. There must be a thorough requirement analysis, followed by planning and scenario designs. In the test design phase, reviews are collected, the Internal Quality Audit Team (IQA) are leveraged, and the designed test cases are reviewed periodically by SMEs and domain knowledge experts. Test cases are built based on designs, followed by test executions. Ensuring quality is an essential requirement in a test execution phase. In this phase, detailed entry and exit criteria are evaluated, and defect status is reviewed periodically.

For extensive software such as financial management systems, it must undergo end-to-end testing to ensure the software quality.  A financial management system must be evaluated under different stages during the software testing lifecycle. These evaluation criteria include requirements assurance, integration assurance based on application suite and system landscape, functional assurance based on user acceptance, and non-functional assurance based on application performance and security. It is also important to automate test execution wherever applicable and conduct regression testing to eliminate redundant test cases.

Conclusion

At Yethi, we have successfully executed an FMS testing project for multiple clients with over 450+ branches and 300+ branches across the country. We have empowered many businesses with our proprietary 5th generation codeless test automation tool – “Tenjin”, and a repository of 850K+ test cases. Our clients have already reaped the benefits of the FMS integration testing solution with their existing Core Banking System model. We have successfully covered 4000+ test cases on different platforms.

Are open-source test automation tools reliable for banking systems?

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Banks are steadily adopting open-source test automation tools. Let us explore why banks rely on open-source test automation tools. Banks in less than half a decade have witnessed growth in technology and digital advancement. Open-source test automation tools offer banks a competitive advantage to remain updated with technological development.

It helps banks in cost reductions, stability, easy accessibility, training testers, testing in-house developed applications, and more. Because of its benefits and advantages, open-source test automation tools have evolved as an industry standard and became a necessity for banks and financial industry. It allows people working and evaluating the framework in large groups to identify errors, flaws, and technical glitches with ease.

The current age banking systems

Banking systems in the current times see a greater digital acceleration. The banks and financial institutions confronted the most fastidious situation and came out unharmed. The banking system is healthier and stronger in handling adverse scenarios after dealing with a global pandemic. Banks and financial industry have seen significant growth in technologies in recent times. Banks now follow the latest open banking trend, and there is unrestricted growth globally.

As per a recent report in Statista, the number of open banking users worldwide is expected to grow at an average annual rate of nearly 50% between 2020 and 2024, with the European market being the largest. As the graph shows, in 2020, Europe counted approximately 12.2 million open banking users. This figure is expected to reach 63.8 million by 2024. As of 2020, 24.7 million individuals worldwide used open banking services, a number that is forecast to reach 132.2 million by 2024. This growth in technology requires steadfast system validation to ensure that banks continue to perform and innovate.

The benefits of open-source test automation tools

To substantiate the question, “are open-source test automation tools reliable for banking systems” I will state a few benefits of open-source test automation tools in this article. Let us go through the reasons one by one to understand why open-source test automation is reliable for banking systems.

  • Better support and collaboration – There are vast fields of information available on the internet that testers can consult to overcome obstacles. Open-source framework enriches online communities, which allow the team from different locations to interact and collaborate with each other via a centralized server. There is a constant flow of information transfer within the community without any downloads and uploads.
  • Cost-efficient – The open-source test automation platform has low licensing costs and minimal hardware needs. The testing components are easily reused and have greater scalability, making the task of managing the performance and load testing easy. Testers can adjust total cloud storage based on the testing requirements making it flexible for organizations to opt for a pricing plan. All mentioned above help reduce the cost of using an open-source test automation framework.
  • Prompt testing – Open-source tools hasten the test cycles making it much shorter than the cycles run with traditional tools. Setup and tool deployment are prompt without the need of installing. The productivity remains unaffected as test updates are tracked in real-time. It reduces the overall time to market making the organization to focus on the quality and deliverables.
  • Overall quality – Several users and developers come together to ensure the quality and security of the open-source platform. The team comprises multiple developers across the globe who are among the best in innovating, improving, and enhancing the quality of the open-source test automation platform so that the users get a high-quality test automation package.
  • Easy to customize – The open-source test automation software comes with a customizable option to suit the specific requirements of the testing department. The codes are easily editable and offer smooth functionality.
  • Virtualization – Virtualization reduces the cost by easily sharing resources and making the best use of their respective skills. Virtualization ensures that testing is more efficient and user-friendly.
  • No restrictions – Open-source test automation platforms allow the organization to work with skilled teams and individuals. Users can fast track the decision-making process with complete control of the execution process. As the highly competent users and developers form a global community, there is uninterrupted support without restrictions.

Open-source test automation tools reform the banking systems

The banking and financial industry is undergoing a massive shift with the appearance of agile and DevOps practices. The importance of software Quality Assurance has increased to ensure the reliability and stability of banking software. Banking systems must be updated with regulatory and functionality changes frequently. Testing the applications from the start will only increase the time to market.

To eliminate the delays, banks and financial institutions are embracing DevOps practices. They are speeding up frequent iteration by establishing CI/CD pipelines and releasing small segments of applications in batches. QA teams are enabling early testing by taking the shift-left approach. Organizations are adopting the DevOps methodology that combines the development and testing teams to focus on a result-oriented QA process. The development team works in a cohesive manner where the development teams create and run unit tests while the test teams validate these at the API and UI layers.

As application development adapts the cloud native technologies, they are built with service packages and deployed as microservices. Open-source test automation tools speed up the testing process of financial and banking applications while reducing cost, enhancing stability, and offering easy accessibility. Banking applications are now managed on cloud infrastructure through DevOps processes and continuous delivery workflows making it accessible, flexible, and scalable.

The teams can ensure high software stability as test automation helps to achieve a larger test coverage and higher level of regression testing. Teams are also focusing on preventing and predicting application performance issues as a result organizations are replacing performance testing techniques with performance engineering.

Different types of open-source testing tools

To test the different types of banking applications and interfaces, the organizations must select the testing tools. The selection of testing tools must be based upon the two functional or non-functional testing aspects. The areas included in functional testing are Web UI, mobile app UI, and API validation, whereas the non-functional test areas include performance, reliability, scalability, and accessibility. The following are the types of open-source test automation tools that can help us to validate the banking software.

  • BDD based test automation tools

Testers or business analysts can create test cases in uncomplicated text language using BDD or Behaviour Driven Development framework. This software development approach allows even non-technical team members to understand the project details.

  • API automation testing tools

Teams are adopting agile and DevOps methodologies and shift-left testing approach that shortens the release cycles. It is imperative to execute API testing as it bridges the differences between unit and GUI layer testing.

  • Mobile test automation tools

The open-source test automation framework can help to automate workflows for native, hybrid and web apps. Many tools offer cross-platform support and JIRA integration.  Mobile test automation tools can automate workflows of iOS, Android, and Windows apps and offer support for multiple programming languages like Java, Ruby, Python, PHP, JavaScript, and C#.

  • Performance testing tools

Performance testing tools are intended for load testing of web applications. Many such tools are open-source test automation tools offering load and performance testing for cloud-native applications, APIs and microservices. A few performance testing tools allow writing test cases in ES6 JavaScript, while other tools offer built-in support for HTTP/1.1, HTTP/2 and Web Socket protocols. Some open-source test automations tools can be introduced into automation pipelines in Jenkins, GitLab, Azure DevOps, CircleCI and other CI/CD tools for performance regression testing.

  • Reliability and stability testing tools

These open-source test automation tools offer services on the cloud for generating various kinds of failures, detecting abnormal conditions, and testing the ability to endure the adversities. The main goal of focus of reliability and stability testing tools are to keep the cloud applications safe, secure with high reliability and stability.

  • Accessibility testing tools

Open-source accessibility testing tools offer thorough application testing to ensure that even the people with disabilities or specially challenged, of all age groups and different races, can use the applications without any issues or disruption. However, application testing must remain compliant with accessibility standards like WCAG 2.1 level AA and AAA, Section 508, ADA and EN 301.

Conclusion

Banking in current times is evolving fast. If it must keep up with the pace of fast changing technology landscape, the banking QA software QA must be ready to adopt newer techniques and tool sets. Banking and financial applications are the most versatile. Each application has functionalities only specific to the requirements, hence, to maintain the quality of the applications it must follow the e2e testing process. This article highlights the different open-source test automation tools and how banks can rely on them for their software testing.