Communication between banks/ financial companies is a critical process as it involves the exchange of sensitive financial information. Let’s take, for instance, a person transferring money from one bank account to another. The messaging systems of the first bank (originating bank) should be efficient enough to send a credit message instantly and securely to the other bank (beneficiary bank), which will update the exact amount of money credited in the beneficiary bank, in the required account. These interbank messages are referred to as structured messages; it is used for secure communication between banks. In case the messaging system is compromised, the message may not reach the bank and lead to discrepancies in updating the credit amount. The bank is liable for such discrepancies; these are high-risk scenarios and will require the bank to face legal consequences or pay a hefty fine.
With increasing globalization, cross-border payments are on the rise; this scenario involves transactions where the payee and recipient are based in different countries. These payments have been standardized and simplified via structured message protocols, adherence, and quality. A structured financial messaging system (SFMS) regulates the intra and inter-banking messaging system to help the banks send messages instantly, accurately, and securely.
Why testing is important in interbank messaging system?
Testing of interbank messaging systems is a critical process. As the structured messaging system consists of complex software development process to make transfers simple and efficient, a thorough testing is required to ensure the system works without any fault. The efficiently tested messaging system will work perfectly and aim at creating a system that sends and receives messages quickly, accurately, and securely. Inter and intra bank testing is monitored by Institute for Development and Research in Banking Technology (IDRBT).
The messaging system is designed to send the financial information or any other details/ instructions through standardized codes. These unique codes used by the banking/ financial sector are encrypted and consist of characters in digital format. The codes are standardized as per SWIFT (Society for Worldwide Interbank Financial Telecommunications), SEFA ((Single Euro Payments Area)), ISO 8583, and so on. The testing process is conducted to make sure that the codes are standardized and works instantly and accurately.
Criteria for interbank messaging:
- Real-time information and instruction matching between the sent and received messages.
- Real-time monitoring the message activities, trade flow, and reporting.
- Test Know Your Customer (KYC), Sanctions, and Anti-Money Laundering (AML).
- Secured and scalable network for easy sending/receiving messages.
SWIFT network offers international money transfers and is often referred to as ‘wire transfers.’ It establishes a series of processes to standardize international payments, thereby, allowing banks to conduct business operations with speed, agility, and confidence.
Test automation for structured messages in banking/ financial sector
Test automation is essential while testing structured, interbank messages to ensure higher accuracy and performance. The test automation tools like structured data testing should be efficient enough to carry out the testing and also be in compliant with SWIFT to ensure a smooth inter messaging system. It should also incorporate ISO 8583 to check the overall quality of the messaging system between banks. Such incorporations to test automation reduces the risk of bank message processing.
The testing process of interbank messaging involves:
- Requirement gathering and review
- Business scenario preparation
- Functional testing
- Database testing
- Security testing
- User acceptance testing
Messaging system is a part of test automation that is directly related to financial implications. Any discrepancies are of high risk to the business process flow. Hence, it is crucial to have thorough testing of message exchange between the parties and validate it to ensure that the messages are cryptic and there is no scope for any further mismatch or inconsistencies.
Tenjin’s structured message testing for banks
Yethi is a niche QA service provider who is redefining quality assurance in the BFSI industry. Its test automation tool, Tenjin, is codeless, auto adaptive, and agile that offers the perfect solution for inter messaging system for the banking and finance industry. Structured message testing is a complex process that can be eased with Tenjin; when a fund transfer is initiated through internet banking, online banking, or other means, it checks the core banking for transaction and later carries out testing to check if the message has reached the target bank accurately and securely.