End-to-end BAU Testing Methodology and Approach

A banking system or a platform might have minor patches, enhancements, and configurations after they are sent to production. These changes may seem negligible, but even a little change can affect the features and functionalities in the BAU flow.

Think of a usual day, when you have pre-defined tasks to complete. The OEM introduces a new patch deployment that requires you to fix it in the running systems. This addition can disrupt the entire business workflow if not addressed on time. You can put your usual workflow on hold. You would need an adequate strategy supported with process validating tools to ensure that workflows are not disrupted. It is necessary to prioritize and strategize your daily activities accordingly, which will help you complete your task without disrupting your usual business flow. 

The problems will arise when you fail to validate, prioritize, and strategize the critical tasks. The patch fixes, enhancements and configurations may seem minor, but it is strong enough to impact the regression test cases. The continuous back and forth for every change can disrupt the entire business flow. End-to-end BAU testing is necessary when there is a need to validate the BAU flow. The BAU testing team ensures that the minor changes do not disrupt the everyday business operation.

BAU testing challenges

Why is this a challenge now? What has changed? Need for urgency to handle the challenges 

In current times, OEMs frequently release multiple application versions with configurations and enhancements due to regulatory changes, business requirements and others. The banks and FIs must update the same so that their applications remain relevant to their customer requirements, and they can serve their customers without any issues. In an ideal situation, banks and FIs would test the new features or minor patches, presuming that the old features would function as usual. In the practice, most banks and FIs will ignore the existing functionalities. Each time a new addition is done, there is a huge possibility that the existing functionalities may face a few changes, which over a period would be degraded if not tested.

BAU testing is a continuous maintenance work that includes business upgrades, defect fixes, security patches, feature improvements, support tickets raised, and minor changes to existing features based on customer feedback. BAU projects are not flexible to changes. There is a risk of losing employee engagement by focusing more on meeting customer requirements. The repetitive actions in BAU testing lead to more mistakes. As measuring the success of BAU testing projects is based on the team’s progress, the errors occurred can deeply impact the project. All these reasons make the BAU testing project hard to control and monitor.

BAU testing has not been a serious challenge until now because the frequency of version release was 5 times less as per a recent report. As customer demand and digitalization have compounded, banks and financial institutions are upgrading updated versions at close succession that can meet customer requirements. The continuous testing of new feature integration with the older ones becomes a challenge now. It requires an adequate testing methodology and approach. BAU testing methodology is essential to streamline the testing and periodic regression run process so that it can analyse the patch fixes, enhancements, and ad hoc fixes through functional testing and enhance the regression pack for future usability.

Building and enhancing a regression test pack is an integral part of BAU testing methodology. BAU testing requires repeated testing of application features and functionalities. Repeated testing is time-consuming and liable to human errors. It is becoming exceedingly essential for banks and FIs to consider BAU testing methodology as application features are vulnerable. When new features are introduced, they might disrupt the old features. Also, writing codes every time a new feature is introduced can be liable to manual errors. Therefore, by creating a regression test pack, banks and FIs save a substantial amount of time and prevent applications from human errors.

It is also essential for banks and FIs to consider the BAU testing approach for an unhindered and quality release. BAU testing approach tracks the quarter-to-quarter improvement by reducing effort, improving efficiency, and increasing test coverage.

Is the current BAU testing approach adequate? 

BAU testing is essential to ensure that the business process flow remains uninterrupted. Banks and FIs are initiating BAU testing but it is hard to quantify the outcome of the testing process. Users may have several questions,

    1. Is BAU testing measurable with the right methods and approach?

    1. What are the right methods of BAU testing?

    1. What approach should banks and FIs take to ensure quarter-to-quarter improvement in BAU testing practice?

    1. How can we streamline the BAU testing process?

    1. How can we speed up the release cycle and ensure quality and efficiency?

Here are the solutions.

Business-as-usual (BAU) requires banks and FIs to keep up a routine work environment and maintain a smooth efficient workplace. BAU testing is done to ensure that this everyday routine work remains interrupted, and the process flow remains smooth. Since BAU is a continuous process, testing must be executed with due diligence.

To ensure the successful outcome of your BAU testing effort it is crucial to consider reducing the time, cost, and effort invested in testing. Banks and FIs must evaluate the ROI of the testing practice to measure the outcome of BAU testing. Breaking down the criticalities, we must also understand that achieving the 100% desired result for BAU testing is not possible without a proper methodology and testing approach.

Let us evaluate the parameters of measuring the outcome of BAU testing.

    1. Time constraint – Integrating new features in existing BAU models and expecting 100% accurate results on time is hard. Accommodating testing in the continuous workflow is a challenge that most banks and FIs must put up with. Will it harm the workflow, can we expect quality results, these are the common questions that banks and FIs muddle with. Planning a BAU testing project comes with experience and skill. A skilled and experienced team can design a BAU testing project through appropriate methodologies and proper approaches. Executing the BAU project and measuring the outcome quality in less time determines the success of the BAU testing project.

    1. Cost monitoring – BAU testing requires a lot of customization in order not to disrupt the continuous workflow. There is a fair amount of cost for customization that banks and FIs must incur, and it tends to go overboard if not monitored or controlled. Will the expense increase rapidly with multiple customizations, will there be a need for new software to support the new additions, will there be a need to incur an extra cost to accommodate the changes and more are the most common questions that Banks and FIs dwell over. Monitoring the BAU project testing and incurring the price is a work of competency. The most competent team can monitor and control the overboard expenditure with the right methodologies and approach. Executing the BAU project and measuring the quality outcome in a cost-efficient way determines the success of BAU testing projects.

    1. Effort management – BAU testing involves managing the effort towards the quality outcome of the project. BAU testing involves a substantial amount of regression cycles, where the dependency is more on the test automation solution than on manual effort. There must be a logical distribution of manual effort and test automation solutions. This parameter ensures that the project is completed within time and following a strict budget without involving extra resources required towards project completion. Managing effort without depleting more than you can handle is the work of the skilled and experienced testing team. The proper distribution of resources determines the success of the BAU testing project.

Conclusion:

The end-to-end testing methodology and approach are essential to reduce errors in BAU testing projects. At Yethi, we follow an organized end-to-end BAU testing methodology. Our BAU testing methodology consists of,

    • Analyse the regression impact

    • Map the impacted regression test cases

    • Retesting and reporting, defect logging and tracking

    • Enhance and maintain regression pack – Add test cases for the patch fixes and enhancement to the regression pack

Our BAU testing and periodic regression run consist of patch fixes, enhancements, and ad hoc fixes. We conduct BAU functional testing in three areas, integration, acceptance, and UI/UX. 

We follow a 3-stream structure in Patchset Regularization Methodology. We understand Patch Set backlog and impact analysis and build test strategy for backlog validation. We design test cases for backlog validation, backlog patch deployment in the test environment, backlog cases test execution (manual), automated regression testing, and deploy patch set backlog production.

We build and maintain an automated regression pack. We understand the application configuration and customization, design base regression cases, install Tenjin (5th generation codeless test automation solution), configure Tenjin application BOT, automate regression cases, validate automated regression pack, and update automated regression pack with patch set regression cases.

Either the banks and FIs or Yethi can handle the final stream, BAU-regularized patch set to test and deployment based on preference. It is divided into two quarters, each quarter consisting of patch set analysis, design and execution of manual patch set cases, and automated regression of impact area.

The approach Yethi takes for BAU testing is allocating the Core and Flexi team for projects. The core team is a team consisting of fixed resources, while resources are flexible and can be easily moved to other projects from the Flexi team based on the requirements. The project is monitored with review and report to track the project improvement. The approach reduces effort, improves efficiency, and increases test coverage. We maintain a systematic cycle in BAU testing through requirement analysis, design & execution test cases, defect logging & retest, execution sign-off, and maintaining regression pack.

We have proven results in handling multiple BAU testing experiences. We have more than 30 years of collective industry expertise and experience. Our testing process focuses on quality, a systematic approach, and automation by leveraging people, processes, tools, and technology. We reduce the amount of testing with our automation-driven process. Our outcome-based managed services model focuses more on predicting and preventing errors than detecting defects. Our codeless test automation solution is tools agnostic and optimized to provide quality output.

Tenjin Enterprise 3.0 is built-ready for Core Banking Transformation

We have seen significant changes in the banking and financial industries. Customers’ requirements, growing digitalization, and market competition have accelerated. These factors are propelling banks to transform their core banking systems. Banks, being customer-centric, understand the need to evolve faster than before and adopt modern technologies to support them in the transformation journey. Banks are doing every bit from their side, yet some problems still remain to support the need for quality digital solutions.

Banks face recurring challenges like quick adoption of digital changes, faster product go-live, and meeting customer expectations. All these must be done at a low cost or should be sustainable to yield a high return on investment. Banks would not want to compromise on the product/software/application quality. Financial institutions are constantly looking out for solutions that will address all these issues.

Considering how fast OEMs release new products, banks and financial institutions are driven by the need to be prompt and flexible in adopting the changes. But adopting changes is not always easy. Organizations face multiple challenges like time constraints, cost restrictions, and inefficient implementation of changes. The process can be more complicated if applications run into errors, affecting the platform’s performance, loading, and response.

What are the challenges?

New innovative banking and financial solutions are not compatible with outdated legacy systems. Banks and financial institutions must steadily adapt to sustain the competition around them. Customers are no longer ignorant of the changes brought by digital innovation. They are more informed and updated with the recent changes.

The tech-savvy millennials comprise 35% of the U.S. workforce and will make up 75% by 2030, followed by Gen Z, who are twice tech-savvy compared to millennials. Both these generations are always ready to adopt new digital techniques. They constantly demand updated technologies, and any organization unable to match their expectations and demands is likely to be out of the league.

Hence, banks must pick up the pace of digital transformation in order to hold on and strongly build their brand sustainability and reputation. The drive for digital transformation is two ways,

  • Transforming and growing technologies

  • Customer requirements and demands

Since banks and financial institutions are customer-centric, customer retention is the main objective of their business. Considering the mentioned driving force for digital transformation, banks must let go of their legacy platforms and start incorporating new technologies and updated platforms.

Since organizations have less time between adopting and are always in a rush to release the products in the market, the end-released product can run into errors. Banks and financial institutions cannot risk their system failure and brand reputation. It is inevitable for them not just to be ready for the changes in technology but also to predict future trends and offer quality service. Ensuring the systems’ quality, being future-ready for changes and adapting to it is necessary for the banks and financial institutions to deliver to their optimum capacity.

From many of our previous experiences, we have noticed that organizations have a lot of reservations and doubts clouded in their mind regarding the implementation of codeless test automation tools. It is because they faced challenges maintaining the balance between rapid implementation of changes and quick testing turnaround.

Our research has highlighted some common findings. A few of the familiar questions we have ended up answering are

  • How easy would it be to adopt the codeless test automation solutions?

  • Would the testing team need adequate training or specialized skill and knowledge to handle the tool?

  • Can the codeless test automation solution effectively validate the changes?

  • Will it ensure end-to-end system quality?

  • Will it successfully highlight the significant errors and predict the latest trends?

  • Will it reduce the time to market while detecting and highlighting defects early in the development phase?

  • How much maintenance will the codeless automation tool need to ensure seamless performance and functionality?

  • Can automation testing be effective even without an adequate infrastructure?

This is where our domain expertise, knowledge, & skill come into play.

Yethi is one of the pure-play QA services and solutions providers that offers a 360-degree overview of all testing efforts. From our experience with 100 likewise transformational journeys of banks and financial institutions and closely witnessed the challenges that organizations face. We worked in a capacity to meet strict deadlines for digital releases in a cost-efficient manner. In tune with the continuous changes introduced by OEMs, we help banks and financial institutions test the functionality, performance, and security of enterprise software applications.

We are in continuous innovation, and our intuitive codeless test automation solution, Tenjin Enterprise 3.0, is 5-times more effective, fast & improved with new and futuristic features. The prominent features of Tenjin Enterprise 3.0 are listed below,

  1. Auto-learning application BOTs are Adapter independent & can commence immediately after installation of Tenjin Enterprise 3.0, saving 40% of testing efforts. These independent adapters can auto-learn the entire screen, part screen, and single attribute. 

  2. Auto-execution with immediate installation saves 50% of testing time, and auto-discover test-specific feature improves test efficiency by 70%.

  3. Client-side execution vs server-side execution improves system performance. Transaction execution summary displays the flow of execution & values of each field to track failures. It increases the test coverage and reduces errors & costs by 60%.

  4. It has a high level of readiness & adaptable to recent versions of Finacle, Temenos & FLEXCUBE. Tenjin Enterprise 3.0 comes with in-built adapters for all core banking solutions.

  5. It does not require a specific framework for implementation and is effective from day zero.

To sum it up, Tenjin Enterprise 3.0 can be easily adapted by all major core banking solutions. Since it is codeless, there is little to no specialized knowledge or skills required to execute automation testing on this tool. It auto-learns specific changes in the applications and not only knows the exact changes but also validates them instantly.

Tenjin automatically detects functional errors at the early stages of the applications, ensures end-to-end software quality, and reduces the time to market. Tenjin runs on low maintenance and offers seamless performance and functionality. Tenjin functions even without adequate infrastructure. It requires implementation on the client-server systems, and with easy integration, it executes automation testing effectively.

Challenges faced by banks in multiple API testing

Application Programming Interface or API is a current trend in the banking and financial industry that helps organizations in their various service lines. APIs have many benefits that result in banks creating multiple APIs to ensure their services spread across client servers to eliminate toggling between ERP platforms and banking systems. Currently, banks are using APIs for UPI collection, Reverse MIS, fetching bank statements, account balance checking, payment enquiry, opening account, and adding beneficiary, to name a few.

APIs have become an integral part of banking transactions as it simplifies the banking processes and eradicates complexities. Banks distribute complex transactions to open-source platforms to offer ease of use to the users and reduce the liability on in-house banking systems. But testing Application Programming Interface (API) is not easy. There are always initial challenges when it comes to testing APIs.

  1. Lack of applicable simulator in sending requests/responses while executing API testing for open-source, commercial and more

  2. Integrating multiple API testing tools

  3. Impact of change, as a small alteration can impede the entire output

  4. Lack of understanding of business application logic and functionality knowledge

  5. Managing extensive test data

  6. Feeding incorrect input values

  7. Inadequate knowledge of combination parameters

Background of API testing

  • Initial setup – Automation testing is necessary to ensure if APIs are sustainable to bear the performance load and pressure.

  • Handling response – It relates to data formatting that ensures if APIs are capable to handle requests and responses.

  • Parameter combination – Another challenge is to test all possible parameter request combinations in the APIs related to problems within specific configurations.

  • Arranging API calls sequence – API calls must be arranged in the correct order to eliminate errors. A proper sequence of API calls can reduce errors. However, the challenge increases while working with multiple-threaded applications or multiple APIs.

  • Validating parameters – Validating the parameters sent through APIs can be challenging for the testing team. Every parameter sent through API requests must capture the correct data type, fits within the length, and value range, and pass the validation criteria.

  • Tracing system integration – It is a challenge to ensure that the API testing systems work correctly with the data tracking systems. It is crucial to monitor API performance to ensure that they bring correct responses or calls.

  • Ensure security as the data is sensitive: Banks must maintain API security in many layers as data is highly sensitive and vulnerable to cyber threats. But maintaining multiple API security at different layers is challenging.

If the additional parameter is included, it exponentially increases the number of possible combinations simultaneously also increasing the challenges. Testing the multiple API integrations further intensifies these challenges.

Why API testing is complicated?

API integration in banks is spread across multiple services and channels. Banks use Application Programming Interface (API) in the areas like,

  • Payment (for single or bulk payment systems like NEFT, RTGS, IMPS, UPI, & FT)

  • VPA-based payment through UPI API

  • Aadhaar-based payment

  • Collection or refunds for collections

  • Real-time validation of collection through various payment modes

  • Refund back to the customer in case of non-validation of remitter

  • Real-time validation of cash collection through branches

  • Cash Deposit Machine (CDM) and status update

Since banks are using and implementing APIs with their already complex multiple service lines, validating multiple APIs become extremely crucial and critical.   

Banks use API to communicate between banks and client servers. It is easy to transfer data between two systems. However, banks must ensure that the API integration is seamless and secured to ensure multiple & sensitive data. API codes are mostly written in XML/JSON. API confirms that the transactions do not have to switch between the ERP platform and banking systems.

Managing multiple APIs in the banking process is extremely crucial now. Banks have included API in mainstream banking. Some of the critical transactions are done using APIs. Moreover, even without being part of banking systems, APIs can pull sensitive customer data to use it to complete transactions.

If banks are using multiple APIs simultaneously, handling calls in orders, responses, and requests will be in bulk. If the platforms remain unmanaged and unattended it will further intensify complexities leading to weak API responses and requests. Multiple API testing demands immediate attention because,

  • API banking is a mainstream banking

  • It handles multiple and critical transactions

  • Weak APIs will disrupt the process flow in ERP platforms and banking systems

  • It will ensure a smooth flow of the banking process

Are the banks doing enough to test multiple APIs?

To understand if banks are doing enough to test the multiple APIs, we must understand the critical areas of testing APIs.

The three critical areas of API testing are Unit testing, Integration testing, and UI testing. In most scenarios, both manual and automation testing co-exist, but when it is about testing multiple banking APIs, it is recommended to automate API testing wherever applicable. Let us explore the critical areas of API testing one by one.

Unit testing – It is critical to perform mock DB for more coverage on testing by covering a wide range of functional areas. Code keeps changing; hence, it is essential to write an extensive test pack. Refactoring of code must be considered while creating test cases. More test cases are automated, and developers can be confident about the software quality. All methods written in the code should be tested.

Integration testing – Integration testing is inevitable and must be performed extensively after unit testing. During the integration testing phase, we must verify

  • HTTP status code

  • Response Payload

  • Response Headers

  • API performance/response time

UI testing – UI testing is a holistic aspect to test the behavioural aspects of the entire application.  

To sum it all up, unit testing is done on a larger scale compared to UI testing. Unit testing is fast, easy, cost- & time-efficient. It promptly highlights the areas where the functionality has gone wrong.

Banks are aware of the importance of API testing and investing sufficient time & effort to extensively test the aspects. It must be consistent and must be in tune with the changes happening in the banking APIs globally.

It is essential to consider the API testing aspects. Unit and Integration testing must be considered in the mid-level range and UI testing from the business perspective to test entire applications.

Essentials of stable and secured banking APIs?

Stable APIs are those that can handle requests and responses with equal ease. At the initial API setup, it is critical to check, if the APIs are sustainable to bear the performance load and pressure. It must be capable enough to handle requests and responses during data formatting. The stable APIs should pass all possible parameter request combinations in the APIs within specific configurations.

A stable API follows correct API call orders and eliminates errors in call orders. The stable APIs capture the correct data types, fit within the length, and value range and pass the validation criteria. If there is any deviation in the parameter order, there will be an error alert. A stable API must bring correct responses and calls and work with adequate data tracking systems.

There are different types of APIs (Open APIs, Internal APIs, Partner APIs, Composite APIs, REST APIs, SOAP APIs, JSON-RPC, and XML-RPC), and it is critical to ensure API security. The security level differs in each of the APIs. For example, SOAP APIs are more secure by design compared to REST APIs. REST APIs do not have any in-built security. It depends on the API design.

It is critical to secure REST APIs while deploying, transmitting data, and interacting with clients. REST APIs also do not have an in-built error handling feature and resending data for occurred errors. The REST API security depends on how they are implemented and the selected architecture. Hence, we can conclude that not all APIs are highly secure and stable in usage. Organizations must put in a little effort to ensure the stability and security of the APIs.

Yethi’s expertise in API testing

At Yethi, we have been associated with many API testing projects. These projects were not entirely devoid of restrictions and limitations. In fact, while test execution, we have seen many such issues. Some of the challenges we have faced are a mix of Encrypted and Unencrypted APIs, multiple encryption levels and data formats, API tunnelling instability/availability, handling multiple security protocols and more.

Our approach is to access the API level and check the functionality, reliability, performance, and security of the programming interfaces. API testing uses software to send calls to the API, get output, and note down the system’s response. It concentrates on the business logic layer of the software architecture.

We offer manual and automated API testing the validate requests and responses at various API layers. Considering that Unit testing is one of the most important aspects of API testing, we follow a strategic step like Unit Testing at a unit level, Functional Testing at each endpoint fulfilment, Availability and Performance Testing, and Security Testing (VAPT), Acceptance Testing – End to End requirement testing,

We have experience in executing various types of API testing as mentioned below,

  • Functionality Testing: To check if the API works and does exactly what it’s supposed to do

  • Reliability Testing: To check if API can be consistently connected to and lead to consistent results

  • Validation Testing: Helps verify the aspects of product, behaviour, and efficiency of an API

  • Load Testing: Is performed to ensure the performance of API under both normal and at peak conditions

  • UI Testing: It involves testing the user interface for the API and other integral parts

  • Security Testing: To test that the API is secure against all possible external threats

  • Penetration Testing: To detect vulnerabilities of an application from an attacker’s perspective

  • Fuzz Testing: To test the API in terms of the limits to prepare for the “worst-case scenarios”

Our intuitive robotic test automation solution, Tenjin, is a functional test automation solution that executes API testing. It is a seamless & effective test automation tool for BA and functional testers. It is proven to be effective across API & GUI-based applications. It can seamlessly execute testing in a simulator and emulator, without having to install an API testing tool separately.

Tenjin Test Automation solution is REST and SOAP API ready. Its features like auto-learn, auto-discover and auto-execute help to learn application interface automatically, access through the path, operation, requests, and responses of different APIs and build data templates for API requests and responses. It automatically executes processes like sending requests and receiving responses. The send request command validates JSON, XML, form data, set header values, set request parameters, Auth: Basic & OAuth2. In receiving responses, it validates response headers, response body, and HTTP Status and captures & references response values.

  • Tenjin learns deployment of API BOTs, learning of API under Test Interface, builds API metadata, & publishes API data template

  • Design & plan test projects, document test cases, build & map test data, sequence and scheduling

  • Execute via various trigger points, combine flow & data, automate API testing in multiple endpoints, & test execution report

Our experience, solution, and services can support the banks taking an approach to managing multiple APIs. We understand banks cannot go wrong testing several critical APIs. If banks have to test many banking APIs simultaneously, they can trust the domain experts and our expertise.

Steps Banks are taking towards Digital Transformation Journey

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.

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

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.

Tenjin handles SWIFT message automation – MT & MX

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.   

A 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

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 integration, regression, UI/UX), non-functional testing (usability, performance, security, data 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.

Importance of test code quality in continuous testing of financial applications

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

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.