Importance of test code quality in continuous testing of financial applications

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.

Ensure Credit Quality in Digital Lending Applications

The digital lending market is exploding with growing apps and fintechs. As per a report IIFL FinTech, the digital lending market is expected to grow to a whopping USD 515 billion by 2030. Lending services are no longer about hard-copy documentation. The lending process has moved far beyond becoming completely digital. From recording queries and customer financial details to credit underwriting and loan disbursal, the process is increasingly becoming online.

The online lending process saves time and effort for customers from physically visiting the bank branches to either sign the documents or verify their identity. Digital lending platforms have reduced foot traffic in branch offices, increasing the dependencies on digital applications, which leads to frequent updates and changes in digital applications. These regular updates require continuous monitoring to create a secure, scalable, and efficient digital lending application.

Why gradually industry shifted towards digital lending from traditional processes?

The traditional lending process was inefficient, filled with errors, and time-consuming. It involved managing hard copies of required documentation, frequent bank visits, and prolonged verification of borrowers’ loan profile, credibility and repayment history. The issues were further amplified if the borrower did not meet the eligibility criteria and underwriting based on their past credit history. Securing loans from the banks remained a matter of speculation for the borrowers. This is where digital lending came into the picture and steadily captured the market.

The current scenario of digital lending

Factors like unlimited access to the internet at an affordable price, smartphones penetrating the market, and applications and software available for loan applications facilitate digital lending. Digital lending in India is expected to touch $350 billion by the end of 2023.  

A report states 36 RBI Approved Loan Apps. These names are independent of banks that already offer lending services at a reasonable interest rate. The lending app comes with instant approval and disbursal within 24 hours, which is extremely convenient for borrowers seeking small and medium-sized loan amounts in case of emergency.

But how the lengthy traditional lending processes become so convenient?

The bank lending apps can access the customer data stored in their in-house server and system. However, the fintech organizations procure this information from various sources like banks and third parties through the Application Programming Interface or APIs.

The fintech applications have to obtain the data from diverse sources. To maintain the turn-around-time and live up to their service reputation, they must send the request data access from multiple sources like credit bureaus for borrower past credit history, link to the bank server for bank account verification and auto debit facility, and more to access borrowers’ details.

The lending process through these applications can be extremely critical if the essential quality checks are not done. There can be rising security concerns, performance & functionality errors, delayed access to customer credit history and a cluttered user interface. Let’s look at the complications or bottlenecks in digital lending applications and what problem it may lead to if remains unresolved.

  1. Security and privacy – Customer data is the most sensitive. Digital lending applications procure customer data directly from the bank server and from a third-party vendor. These transactions can be highly sensitive, and if attacked by malicious malware, they can lead to terrible issues if unresolved. It is crucial to ensure robust security measures and compliance with data privacy regulations.

  2. Data protection from risk and fraud – Understanding the current trend of digital lending platforms protecting customer data from risk and fraud is essential but challenging too. Protecting the sensitive credit details of customers are a complex process if the fintechs do not have adequate mechanism to analyze user behaviour and identify the potential risk.

  3. Scalability – As the number of users and loan applications grows, the application needs to scale efficiently to handle increased traffic and processing demands. Inadequate scalability can lead to slow response times and system crashes during peak usage times.

  4. Migration from Legacy systems – As per a report, over two-thirds of organizations are still using and relying on legacy systems. Legacy systems are non-adaptable and inflexible. They are not compatible with digital lending platforms. Integrating the digital lending platform with the legacy platform can be challenging and may require extensive effort and expert resources. And yet enterprises cannot abandon the legacy platform as they have been running for more than 30 years with an estimated over £2 trillion transactions every day.

  5. Integration with the main banking server – This brings us to the next bottleneck. It is a significant effort to integrate the digital lending platform with banks’ legacy platform. Moreover, the legacy systems are not equipped to manage the integration with the digital platform. They also cannot offer innovative offerings like banking-as-a-service (BaaS) as it does not support application programming interfaces (API) integration with third-party services. However, since the upgradation of these legacy systems is time-consuming, banks resist the changes leading it as a bottleneck in the digital transformation process.

  6. Regulatory compliance – Digital lending applications must be compliant with financial regulations. Frequent regulatory changes also demand financial institutions keep up with the changes and update their applications. With frequent changes in features and functionalities, keeping up with regulatory compliance can be complex.

  7. Data transactions – The digital lending platform pulls large amounts of user data from the main banking systems. It requires robust infrastructure and seamless data integration & management systems to eliminate bottlenecks and ensure smooth operations.

  8. Customer satisfaction – Customers require a fast loan approval and disbursement cycle. Hence, to ensure optimum customer satisfaction, lending institutions validate application workflow that expedites the decision-making process, minimizes delay and conforms to user experience. Also, recurring functionality, performance, and security errors can cause potential application issues that damage the brand’s reputation.

  9. Verification of data quality – Digital lending does not pull irrelevant data. They pull only required customer information. Banking systems may store multiple data but not all data are accurate and useful for digital lending platforms. Choosing the relevant data helps fintechs arrive at an informed essential lending decision. However, verifying the data quality can be complex due to the unavailability of relevant and accurate data.  

  10. Mobile responsiveness – The current trend in digital applications demands high mobile responsiveness. The process can be extremely complex in the absence of a mobile responsiveness platform. Hence, the digital lending platform requires extensive validation to ensure that the platform continues to deliver high-quality services and offer optimized user experience.

Digital lending apps became prominent during the pandemic, and customers are embracing it, because of fast approval and disbursal. But the credit quality remains under the scanner.

How reliable is the credit quality in digital lending applications?

A long-standing business lending process is more effective with manual review, cross-verification, and years of root-cause analysis of defaults and assessments compared to digital platforms. The former could be time-consuming, but it helps to achieve the desired risk outcome. It also helps the banks achieve low default rates.

However, the industry cannot avoid the trend of digital adoption. To adapt to the model, financial institutions have found a middle ground to amalgamate the digital model with the accuracy of data-driven model-based decision-making. As digital lending continues to improve, risk managers can take a calculated approach towards automation.

How can we improve the credit quality of digital lending apps?

Banks are testing the automated digital engine based on data-driven assessments and a structured credit framework to assess credit quality based on predictive default risk. As a result, the decision will be more consistent, accurate, fast and cost-effective.

Is quality assurance and testing essential to ensure the credit quality of digital lending apps? Can quality assurance and testing ensure the credit quality of digital lending apps?

Digital lending apps or fintechs pull data from the banks’ main servers. They also coordinate with TSPs like credit bureaus, collections and more. They handle critical transactions 24/7*365 days and customer details, making QA strategy an essential step. QA and testing confirm that the application and platforms are free from defects and errors before production and market launch. It also must offer outstanding client experience with high-quality mobile apps. Quality assurance and testing helps lenders to improve the credit quality of digital lending application.

Some factors are important here to ensure the credit quality of digital lending applications. API functionality and performance, digital application features and timely response of digital apps.

Though digital lending applications require end-to-end test coverage, including functional testing, reliability testing, validation testing, load testing, UI Testing, Security Testing, Penetration Testing and more, there is one more crucial aspect when it comes to validating digital lending applications.

Our understanding from the projects we have handled is that these applications have a few restrictions and limitations. We have also observed a reliability on API functionality and performance if digital lending platforms have to function without any technical glitches.

As high as the dependency on API, the risk with digital lending keeps increasing. API testing is conducted on Encrypted and Unencrypted APIs, multiple encryption levels and data formats, API tunnelling, instability/availability, handling many security protocols, and more.

We offer manual and automated API testing, validating requests and responses at various API layers. We also validate the accessibility of the API level and check the functionality, reliability, performance, and security of the programming interfaces.

Our intuitive robotic test automation solution, Tenjin, is a functional test automation solution. It is a seamless & effective test automation tool for BA and functional testers. 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

We support financial institutions with end-to-end testing of their digital lending platforms.

Both banks and fintechs have brought their lending processes to digital platforms for quick approval and disbursal. It allows the borrower to avail loans in case of an emergency. But like all other platforms, digital lending apps require thorough testing to ensure higher customer satisfaction with lower TAT and improved credit quality. This is where Yethi’s domain expertise and industry come into the picture. We have delivered over 500+ projects for over 130 clients across 30+ countries in various LOBs in banks and financial institutions.

10 Critical Steps in Testing the Business and System Upgrade Projects of Banks

Banking businesses thrive on market relevance and ever-evolving customer preferences. It matters a lot for banks to ensure the highest level of customer satisfaction. They can never compromise business quality as it may harm their reputation, incur a monetary loss, and take away their customer reliability. Compromising the quality of their services and systems may lead them to pay a significant penalty. Hence, testing is crucial in the event of new system installation or upgrades in banks.

Banks ensure to reform their services based on current trends and technologies as customer demands and preferences keep evolving. To stay relevant to their customers and stay ahead of their competitors, banks incorporate the latest technologies and improve their services, eventually improving the business metrics.  Hence, banks must validate every business and system upgrade to retain customers and offer them a seamless experience.

Testing is an integral part of the banking systems which demands a more strategic approach than a random one. It involves a great amount of strategy and planning to ensure that the projects go live successfully without any glitches. As so it may look simple on the surface, testing the business and system upgrades are usually a critical process. There are many steps that an enterprise must consider during the testing of the upgrade projects. Here we have discussed 10 critical steps in testing that the enterprise business must not overlook if their end goal is to serve their customers well and succeed.

Steps in testing the banking business and system upgrades:

Before we consider the step for the execution of successful testing of the business and system, it is important to define the goals and objectives of the testing projects. Here are key considerations to make while determining testing projects of banks once you have determined the objectives of your testing project. 

    1. Requirement gathering based on the project scope.

The testing projects of the business and system upgrade begin with an understanding of the project requirements. The scope of testing, the banking modules, menus, submenus and more are the essential components of any project.

Understanding the project requirements is a complex task as banking applications are quite diverse with multiple features and functionalities. The QA team must have a thorough understanding & awareness of banking modules, functionalities, various layers of application integration and more. The process can be complicated and the project scope may remain unidentified if the teams don’t gather adequate project requirements.

Is it an elaborate exercise to gather project requisites?

Requirement gathering is the entry phase of the software testing project. As a part of the project strategy, it is essential to gather the project requirements and understand the scope of the projects.

By gathering project requirements and understanding the project scope, it is easy to strategize, define, and measure the testing project outcome. It also helps in deploying manpower and determining the time and cost of the project. The team understands what is to be tested; they also understand if they are missing out on any important components, or any potential risk involved so that they can discuss with the stakeholders to have a detailed knowledge of requirements. The team also creates the requirement traceability matrix (RTM) to map the test cases.

    • Requirement validation based on available resources (Time, money, and manpower)

Validating requirements helps the team streamline the testing projects and segregate them into categories to individually address the issues in each category and allow to resolve them immediately. Based on the project categories the requirements can vary. After gathering the project requirements, the team takes an overview of the available resources and validates if the available resources match the project requirements and identify the test environment.

Banking applications are usually complicated with multiple requirements. Also, based on new trends and customer requirements, the application features may change frequently. This dynamic nature of the requirements can further add complexity to the validation process, as they are subject to frequent changes based on the changing application features. Additionally, resource availability in terms of time, funds, and manpower may experience small variations, influenced by the specific project requirements and scope.

Can project requirements change frequently? Does frequent changing project requirements affect the testing project outcome?

Frequent changes in project requirements may not affect the project if requirement gathering is done considering all aspects. The diversions are evaluated by the project team to ensure they can accommodate frequent changes without affecting the project or workflow. Changes in applications are part of the project plan, so a pre-defined strategy and a thorough requirement validation can help the team to prepare with the time, money, and manpower for a successful test execution of business and system upgrades. The frequent changes will significantly not impact the project outcome if the requirements are gathered, assessed, and validated adequately before initiating the project.

    • Planning tests under the scope of the AUT

Planning the test is a critical step for the effective execution of the software testing life cycle. Testers define the test plan, application under test, scope of testing and more to yield expected results. Based on requirement gathering and validation, the team also effectively calculates the effort, time and cost required for testing. The project team also develops the test strategies, methods, and techniques during this stage. They also identify the test cases, test deliverables and milestones. The planning stage will only be successful when a detailed plan is presented, reviewed, and approved.

The test planning stage can be complicated because this is the stage when all the essential components are defined. If one or more project components are not added, then there will be a lack of clear understanding of the project, testing objectives, and scopes, leading to issues in deliverables. Since the executable test cases are identified in this phase, if the roles and responsibilities are not assigned, and test plans are not reviewed and approved, it will be tough for the project team to move on to the next step.  

Can the project team accommodate application changes if the request is raised at the later testing phases? Will it harm the project plan?  

Application changes are normal and can be raised at any stage. The changes are purely based on regulatory and technology updates as well as customer demands. Hence, the updates may come frequently, which the team must accommodate accordingly. Since the application changes are flexible there are greater need to incorporate these changes. Feature and functionality changes are integral parts of project plans.

    • Selecting the test cases for the sanity check

This is an interesting phase in the testing project where you identify the new functionalities, feature changes, and any bug fixes. Since the objective is to perform a quick and fast sanity check, there is no requirement to write new tests. This step ensures that the newly implemented changes are working without any errors.

The process can be complicated as only a small portion of test cases are selected for sanity checks. The team will fail to determine the impact ratio if the right test cases are not selected. The project team must thoroughly understand the project requirements and select only those test cases that might have the highest impact on the application’s functionality and performance.  

What is essential to identify the test cases for sanity checks?

Based on the project, application under test, project scope and test environment, the project team can identify the test cases based on their test predictability. The project team usually handles multiple test scenarios to understand the test cases that can have the maximum impact on application features, functionality and performance and choose the most probable test cases. Usually, the requirement gathering and analysis, understanding of AUT, project scope and the test environment are the essential aspects to identify the test cases for sanity checks.

    • Designing and developing the actual test cases

This is the actual phase when the testing team starts designing and developing the test cases. The team prepares the required test data for testing, and the quality assurance team reviews it. The team identifies the test cases that must be designed and developed and writes them to ensure that the written test cases are easy to understand. They also create test data and scenarios for test cases, identify probable results, and review and validate test cases. They update the requirement traceability matrix (RTM) with new changes.

The main objective for the team in this phase is to have a set of accurate and relevant test cases to ensure that they provide complete test coverage of the software and application. It helps the team to have a 360-degree overview of software quality. A comprehensive testing process allows the team to detect potential errors in the software before it is released. The team prepares the test data and keeps it ready for test execution. In the test case development phase, the testing team creates, verifies, and reworks test cases and manual and automated test scripts.

Banks may face two types of complications at this stage. First, if the team lacks the skill and knowledge to identify accurate and relevant test cases, and second, if due to multiple changes, the number of rework test cases increases. It may consume an ample amount of time and money to find skilled people for the job and validate the increasing number of test cases due to frequent changes in applications.

Can there be a possible solution to reduce the effort and time of rework?

It is time-consuming to find skilled developers and testers when your projects are time-bound. Even if you manage to put the entire team together, you might have to meet with one more challenge of accommodating frequent reworks. The project team might have very less time to meet the project deadline and time-to-market. So, banks hire third-party vendors to handle the testing projects to ensure they go live confidently without worrying about software quality. Since the amount of rework increases with application changes, it occupies a significant segment of the software testing lifecycle compared to new changes. Hence, the team selects a robust test automation solution to reduce the rework or regression test time.

    • Understanding the available test environment

Some banks and financial institutions have a conducive test environment with the necessary hardware, software, and network configuration for test execution. While the team designs and develops test cases, they can simultaneously evaluate the existing test environment. If the test environment does not support the massive business and system transformation and upgrade projects. The team must consider setting up the test environment for an effortless test execution project.

The process is complicated if the bank runs long on its legacy system and has a massive amount of data to migrate. Banks find it tough and time-consuming for seamless execution of the testing process without a favourable test environment. Moreover, they must delegate skilled people for the projects or hire a new team.

What is the possible solution if you do not have the required team strength, bandwidth, and allocated budget to set up a test environment?

Banks can consider hiring a third-party vendor to take care of all their test requirements and deliver the project on time by meeting all the quality standards and regulatory compliance. The QA solution providers have the required test environment or can set up one to ensure timely project completion.

    • Setting up the right test environment for seamless test execution

The test environment defines the condition on which the software is validated. Setting up a test environment can be simultaneously conducted with designing and developing test cases. In this stage, the project team determines the software and hardware conditions for testing the product. As the activity is done by the development team, the testing team may or may not be involved in the process. However, they check the readiness of the available environment, and this is known as smoke testing.

The first step in setting up the right environment is to understand the required architecture. The team must be skilled and aware of the available architecture. The test environment needs to be adaptable for seamless test execution. The process can be complicated if the environment is not favourable for test execution and is not ready with the test data set up.

How can the team ensure that the environment is built-ready for seamless test execution?

The team must validate the readiness of the test environment to ensure seamless test execution through smoke testing. They must understand the hardware, software, and network configuration well to ensure that the environment supports the test execution without any disruption.

    • Executing the test cases

In this phase, the test cases and test scripts that were created in the design and development phase are executed to detect defects or issues or errors in banking software. The evaluated results are gathered and assessed by the team. Test execution combines the two phases, planning and developing that verify the software quality. The activity also helps report bugs or technical glitches in the software. If the testers report bugs, the errors are reported to the developers who fix the bugs, and the testers test the software again.

The process can be complicated if there is no adequate test, or if there were any issues in the planning and development of the test cases. Also, if the test environment is not favourable or the test execution did not happen as per the test plan. The team must also put the stages together to finally execute the test cases.

Can multiple test execution degrade the software quality?

The objective of software testing is to validate the accuracy, stability, reliability, usability, efficiency, flexibility, portability and more. Software is tested to ensure that it successfully passes all the criteria. Multiple test execution does not degrade the software quality, instead, it delays the product release. It may not be necessary to test the same feature again and again. Moreover, testing the same feature repeatedly can be time-consuming. It is a good practice to test only applicable changes, performance, and security instead of testing the complete software functionality and menus. It saves time and effort and does not disturb the existing feature of the software.

    • Tracking and reporting defects

Tracking and reporting defects is one of the objectives of testing the software and its quality. The defects or issues are logged in defect tracking systems that are raised during the test execution. The details of the defects include descriptions, defect severity, priority, and more. The test execution results are examined to verify the software functionality and performance and simultaneously detect defects if any.

If the team identifies defects, it is sent to the developers for resolving the errors and retested again to ensure that the defects are fixed. After the defects are fixed team documents and report the test results to the stakeholders. The end objective is to identify and resolve the defects to ensure that the software can be released without any errors. Hence the software must be tested multiple times to ensure all defects are resolved. The process can be complicated if the team does not have an adequate mechanism to identify defects. Finding defects manually is a complicated process.

What solutions can organizations opt for to reduce the rework and multiple retests?

Multiple defect-tracking tools in the market can reduce the manual effort of identifying defects in the software and reduce the rework. For its benefits, organizations use defect-tracking tools that can be easily integrated with testing or test automation solutions. This saves time and effort and reduces rework. The team can confidently fast-track product releases.

    • Planning exit test followed by test closure

This is the final stage of the test execution and a critical one. In this final stage, the quality evaluation of the software is completed and determined if the product is ready for release. In this phase, all testing-related activities and formalities are concluded and documented. The testing team by now must have a clear understanding of the software quality and reliability. Whatever issues have been detected this far must be resolved. The team must document the testing process and improve the testing processes based on their experiences. It helps in removing the bottleneck from future testing projects.

The stage comprises preparing test summary reports, defect tracking and reporting, cleaning up the test environment, preparing test closure reports, transferring knowledge, and providing feedback for process improvement. The main objective of test closure is to validate the software quality and ensure the product market launch. It also confirms that the test execution was organized and completed efficiently. The process will be complicated if there is a lack of relevant information, or the team fails to capture feedback and critical lesson learnt from the project.

How to ensure that the report is whole and comprehensive?

Recording the project reports manually will be liable to errors as there can be a chance of missing out on information. There are a few test automation solutions in the market that comes with easy reporting solution. As reporting is a tedious, elaborate, and time-consuming exercise, these solutions are convenient and useful for the project team.

Conclusion

The steps, scenarios, and situations mentioned above are our understanding of the business and system upgrade projects we delivered. Yethi has supported 125+ banks and financial institutions in 30+ countries in their transformation and upgrade projects. In the 700+ projects we have completed so far, we have achieved quality and punctuality by completing the projects within strict deadlines.

We manage end-to-end test lifecycles efficiently to ensure customers receive quality outcomes within the project deadline. We have conducted end-to-end functional testing and non-functional testing in upgrade testing projects. We have also validated the robustness and responsiveness of systems while ensuring stability and flexibility in data migration and systems performance testing.

We leverage the highest potential of our robotic codeless test automation solution Tenjin during repeated regression cycles in a project. Our intuitive and intelligent solution comes with banking and FI-specific plug-and-play adapters that reduce implementation hassles with banking applications. Tenjin offers data-driven test execution and covers pre- and post-regression cases and effortless system integration testing, user functionality testing, user acceptance, regression testing and more. It comes with easy report generation capabilities and integration with defect management tools to generate test summary reports.

Steps Banks are taking towards Digital Transformation Journey

Digital Transformation

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?

Digital transformation

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.

Commercial Bank of Africa (CBA) chooses Tenjin, Yethi’s Testing Automation platform to test its T24 banking solution

Commercial bank of africa

27th May, 2019: Commercial Bank of Africa (CBA) has selected Tenjin—Yethi’s Robotic Test Automation platform to test its core banking solution by Temenos (T24 – Version R18). CBA was in pursuit of a low-maintenance, seamless, effective, and easy-to-use Test Automation Solution. Yethi’s Tenjin met their requirements after a detailed evaluation among the leading players in the market. This is Yethi’s first T24 project in the African Continent, which will demonstrate the versatility and robustness of Tenjin given the complex nature of the ongoing T24 upgrade.

Commercial Bank of Africa, headquartered in Nairobi, Kenya, has been rated by Global Credit Ratings (GCR) with a national scale long-term rating of A+ and short-term rating of A1. CBA is a pioneer in leveraging technology innovations and aims to transform the African banking sector with a unique range of banking products and solutions. M-Shwari, a mobile banking application launched in partnership between Safaricom and CBA, reached 10 million customers within 18 months of its launch.

Moses Abwoga – Head of Enterprise Projects Management said, “We have always been associated with using innovative technology to augment the manner of interaction that our customers have with our bank. Effectively testing our banking solution to prevent any future errors is a major step towards fulfilling our motive of creating engaging customer experience journeys. We are extremely happy to select TENJIN to assist us in our testing activities during T24 upgrade. We look forward to reap the benefits associated with Tenjin and reduce our overall testing efforts.”

Speaking on the engagement, Srirang Srikantha, COO, Yethi added, “We are extremely happy to be working with the Commercial Bank of Africa. Tenjin’s core features such as naviflow learner, result validator, test management, and task scheduler will help in developing a robust solution enabling CBA to elevate its customer experience.”

About Tenjin

Tenjin is an advanced test automation tool which meets the changing needs of testing in banking enterprises. Its core features such as naviflow learner and robotic units that spontaneously determine and learn the application interface are the reason why some of the most complicated systems in the world use it to improve the efficiency of operations. As a plug-and-play and banking aware solution, Tenjin works within the bounds of regulatory requirements and is instinctively conscious of different transactions, making it a blueprint for successful testing of banking applications. The high-speed solution includes changes automatically without additional programming, relying on robotic learning for quick integration with high levels of consistency. Tenjin Test Automation works with major core banking and digital platforms and is adopted by banks across 15 countries.

To know more please visit https://yethi.in/tenjin-test-automation-suite/

About Commercial Bank of Africa

Commercial Bank of Africa, headquartered in Nairobi, Kenya, is one of the largest privately owned banks in Kenya. A member of the Commercial Bank of Africa Group, CBA is licensed by the Central Bank of Kenya. Apart from providing a wide range of financial services, CBA’s core mission is to enhance the wealth and financial goals of their customers.

To know more please visit https://cbagroup.com/mission-and-vision/.

Struggling with complex  nature of the ongoing T24 upgrades ?

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Ongoing Innovation in Retail Banking

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.

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

software testing services

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

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

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

Challenges of customer digital onboarding

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

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

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

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

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

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

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

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

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

Ways to overcome these challenges

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

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

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

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

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

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

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

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

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

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

QA services for retail and corporate banking

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

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

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

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

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

Understanding the Retail Banking

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

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

Services and digitalization in retail banking

Retail banks offer the following services to consumers,

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

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

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

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

QA services in the retail banking

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

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

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

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

Understanding the Corporate Banking

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

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

Services and digitalization in corporate banking

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

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

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

QA services in corporate banking

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

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

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

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

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

Comparing QA services in retail and corporate banking

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

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

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

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

Conclusion

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

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

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

Is India’s digital lending market equipped to manage the QA risk for appropriate digital experience?

Digital lending

Technology has made Indian banking systems move from physical to digital platforms. Amidst the rising concern of the global pandemic, when the entire world moved within home confinement and physical touch and interaction was restricted, banking needed a massive transformation. Since banks and financial institutions started digital transformation journeys, banks have elevated to internet banking and digital means of payments, digital account opening, digital lending, wealth-tech, and invest-tech solutions. Banks have moved further and adapted neo-banking models and became ‘Banking-as-a-Service’ (BaaS) platform providers.

Like all other channels in banking, the lending market is highly influenced by digitalization. With deep penetration of internet facilities, growth of services available on the digital platform, advanced technologies, regulatory changes, and more have triggered the growth of digitalization. Customer expectations have increased as the demand for virtual banking has increased like never before. It becomes a priority for banks to meet customer needs without compromising on superior customer experience. With the rise of fintech, the growth of digital banking has become inevitable.

What is QA risk in lending?

With the digital expansion, lending companies are faced with challenges like unethical business practices, mis-selling, cybersecurity, and data privacy concerns. Maintaining Quality Assurance for financial applications is crucial because it ensures that customer details and money both are protected. By testing the financial applications, organizations can validate the regulatory and reliability of the applications. However, there are some potential QA risks in the lending market.

Some of the common risks in software testing and QA of financial applications are,

  • There is a lack of communication and interaction between the lender and the borrower. An inadequate regulatory framework for digital loans like consumer loans, instant loans, etc., makes the matter more grave. It may lead to delinquency and potential fraud, which require safeguarding mechanisms against fraud in the lending platforms. Possible interaction, adequate regulatory framework, and applicable verification are necessary to prevent undesirable outcomes. Organizations must formulate an apt quality framework to save valuable resources and meet deadlines.
  • There are frequent changes in applications that may arise due to customer requirements. The request for changes is so frequent that it leads to resource gaps or exhaustion. Organizations must ensure product quality while meeting the launch deadlines. It creates immense pressure on the team to manage the risk while handling the project deadlines.
  • Sometimes, a lack of prioritization may shift the focus to insignificant aspects. The situation can be more critical if there is a lack of monitoring mechanisms for lending service providers and digital lending applications. The team pays more attention to the insignificant features ignoring the primary ones. Hence, it is critical to prioritize the main functionality and product highlights and build a monitoring mechanism to define and monitor the core functionality.

From loan origination to collections, the lending lifecycle has become digital. To render lending services, banks are collaborating with several third parties like fintech, distributors, SaaS providers, thus exposing borrowers and lenders to new and heightened levels of risk.

Importance of QA in lending service for outstanding lending experience

The importance of QA increases to ensure that the customers have an outstanding digital lending experience. The innovative operating models and structures evolved around digital lending demand the need to evaluate the risks and protect the customers and lending organization data. QA in lending services is critical as it helps in monitoring the system performance and functionality to manage the risk.

The risk management frameworks of banks and NBFCs have started utilizing digital touchpoints for a proactive risk assessment of client profiles. Without an adequate QA service validating the connectivity and performance of the digital touchpoints will be an impossible task for an organization, thus increasing the probability of risks. It will also hinder the organization from insightful decision-making. QA prepares your systems to perform without errors in identifying potential anomalous transactions.

An adequate QA service helps organizations regulate and formulate better standards for cybersecurity, privacy, customer servicing, dispute management, system availability and performance, and fraud. RBI frequently changes its guidelines, which requires organizations to incorporate the changes in the systems. A good QA practice will help organizations validate the changes in the systems without an error and remain compliant with frequently changing RBI guidelines.

Also, with these RBI guidelines changes, the organizations must assess the systems’ worthiness of the apps. Validating the systems against cyber threats is a critical exercise that lenders must follow. An adequate QA practice in lending ensures that the system is perfectly sustainable, accessible, and reliable even with these changes. QA practices also see that the apps can adapt to the contractual terms and conditions, customer rights and awareness, dispute resolution, manage fraud, and more.

How to manage QA risk for appropriate Digital experience?

To address the QA risks associated with testing of financial applications, the QA testers intensely scrutinize the following key aspects of the financial applications.

  • Security – Ensuring application security is a pivotal exercise for lending institutions. The Cyber-criminal makes financial applications and data (customer and organization) centre a soft target. Cybercriminals can gain control over customer accounts and misuse the data. The QA team tests the platform security to ensure that the applications and the data are protected and secured from all possible data manipulation.
  • Reliability – Financial applications have the extreme responsibility of assessing, processing, and storing sensitive customer data. This exercise ensures the application reliability of how accurate the applications can process and store data. A good QA practice ensures that the financial applications have a high level of data availability. It also confirms that even if the application performance fails, the applications can still protect the data.
  • Performance – It is critical to evaluate the performance of financial applications concerning the transaction time and transaction frequency. The banking, trading, and lending applications process many transactions in a short time. The apps cannot delay the response as each transaction request is critical. Any delay in application response can impact business operations. QA services validate the application performance during high traffic and heavy transaction volume. It identifies the performance bottleneck and prepares the systems to perform without disruption.
  • Regulatory Compliance – Every organization must comply with all regulations and government guidelines. The financial institution must prepare the operation to adapt to the frequent changes in system regulations so that the organizations meet the requirements of regional or national governments or various international regulatory bodies. A good QA practice prevents system failure by meeting the system’s compliance against civil, financial, or even criminal consequences.

Is India equipped to manage the QA risk for appropriate digital experience in lending market?

India has witnessed extreme growth in innovation and technologies in the past couple of decades. The country has been so proactive in embracing the digital transformation that even in a grave situation like the global pandemic, Indian financial institutions could pull it through. Today technologies drive Indian banks and fintech NBFCs. India’s digital lending consists of services like unsecured loans to secured loans, personal loans to business loans to vehicle loans, and loans for individuals and MSMEs in various age groups and segments.

Since the Indian banks are steadily adapting to innovative digital approaches across all channels, the fintech NBFCs could have been far behind. They are adopting digital lending like all other channels. Banks and NBFCs have collaborated with the e-commerce firms to finance the products to the buyers and encourage the suppliers and businesses to do business without any disruptions. Financial institutions also partner with marketplaces, aggregators, wallet companies, payment facilitators, etc., to cater to digital sourcing models. Financial institutions are now leveraging advanced technology and partnering with various fintech to offer products like Buy Now Pay Later, a point-of-sale credit, and others.

There are several technologies like data analytics, alternate data models, and data-based underwriting models that financial institutions use to create a digital database and reduce turnaround time and operational costs. Financial institutions have partnered with account aggregators to decide on the credit eligibility of the customers. Technology allows companies to undertake income assessment, loan monitoring, KYC data assessment, and create a single view of the customer across their liabilities and assets by leveraging data from other financial sources. The process will allow the lenders to onboard new customers with ease.

Financial institutions also utilize emerging technologies like open banking or video KYC, which requires them to coordinate with fintech for an array of financial services like lead acquisition, KYC verification, income verification, e-signing and e-stamping, and processing fee payments and collections. The Reserve Bank of India has formed a Working Group on digital lending, which addresses the risk posed by digital evolution in financial services. This group also ensures that organizations reap the benefits of digital innovation.

If organizations encourage the covert digital or neo banks, digital-only NBFCs or banks, they must ensure that their QA is top-notch. Organizations are testing their systems and platform. Organizations have adopted an agile testing methodology to include QA practice early at the development stage to highlight the errors so that the team can identify and resolve those issues. Testing has become an integral part of the development stage. QA practice gives the banks and financial institutions that level of confidence and liberty to innovate and introduce new technologies without any restrictions. 

Conclusion

The growth of digital lending had a tremendous impact on organizational setup, technology, compliance, and operational costs for digital lenders. The entire structure of the financial organization is changed. Organizations use AI/ML-based underwriting algorithms to offer better monitoring and governance in the segment. Digital lending is building customer trust by providing more transparency providing a comprehensive framework and a progressive regulatory environment for the fast-growing digital lending segment.

Banks and NBFCs successfully offer robust and seamless digital lending infrastructure to existing and potential borrowers. They effectively address and mitigate issues concerning cybersecurity, data privacy, operational risk, third-party risk, and fraud risk. The financial institutions and their partners are reaping the benefits of digital innovation while mitigating potential QA risks to offer an outstanding digital experience to the borrowers.