Aspects You Might Pay Close Attention While Testing Trade finance

Managing international trade and commerce on a platform requires a thorough inspection. Companies use financial instruments and products to accelerate International trade and commerce. These instruments and products make it easy for banks to transact business between importers and exporters through trading.

Trade finance is a simple mechanism controlled by 3rd party, whether a bank or other financial institutions. Now consider an instance that while processing a “letter of credit” or “credit letter”, a bank faces a performance failure or functional errors during an ongoing trade transaction. It will have a terrible impact on the trading process, which will add to the risk for both buyer and seller, putting the 3rd party (bank or financial institution) in a bad light. As the main focus of trade finance is to eliminate the risk associated with the payment and supply, the 3rd issuing party (banks or financial institutions) must ensure that the transaction is carried out without any disruption. It leads to the need for testing the trade finance platform to ensure a seamless performance at all times. 

Why testing Trade Finance is necessary?

Mentioned below are the points, which explains why testing trade finance is necessary

  1. Reduces the payment risk – It acts as a security to reduce the payment risk for the exporters and supply risk for the importers.
  2. Ensures quality system performance – Banks and financial institutions have dedicated trade finance modules and systems to process diverse trade finance transactions. Testing the trade finance module is critical to ensure that the system runs smoothly and efficiently and provides accurate results.
  3. Improves the efficiency of operations – Testing the trade finance allows companies to record cash transaction between importer and exporter by reducing the system performance errors and improving the operation efficiency.
  4. Reduces the time to process the transactions – Testing the trade finance platforms ensures the system stability to accommodate multiple information and process the transaction in less time. It also ensures that the systems perform without any technical errors even with high volume of data and speed of transaction.

Key Points While Testing Trade Finance Modules

Following are the key points to keep in mind while testing the trade finance modules:

  1. Understanding the Product: Trade finance involves multiple products banks may use to extend the facility. Each product has different features and ways of providing finance. Therefore, it is important to understand the product and instruments. Here’s a brief description of instruments for trade finance:
    1. Letter of Credits: A Letter of Credit reduces the risk of non-payments. The buyer’s bank provides a payment guarantee to the seller’s bank by issuing a letter of credit. Financing can be availed of by the seller against this letter of credit as the seller’s bank has security that the buyer’s bank will pay in case of default by the buyer, thereby acting as a bank guarantee. The buyer’s bank can then proceed against the buyer to recover the dues.
    2. Cash Credits / Overdrafts: These are some of the most common means of raising finance whereby the businesses can borrow money from the line of open credit accounts for trade. One of the key benefits of this form of finance is that the interest is charged only on the amount utilised. Once the payment is received, it can be credited to the cash credit or overdraft account to reduce the amount of borrowing and consequent interest rate.
    3. Invoice Factoring or Invoice Discounting: Here, the seller can present the invoice to the bank to avail of finances. The bank or the concerned financial institution can either purchase the invoice, collect the remittance or discount the invoice where the bank itself does the bill collection. Either way, the seller gets the required financing to meet his working capital needs. Once the payment is received, the bank adjusts the amount against the factored-in or discounted invoice.
    4. Export Credits: Export credit allows the exporter to avail of pre-shipment financing. By presenting the export order received from the importer, the exporters can use the export credits. After receiving funds from the importer, the amount is adjusted against the export credit to close the same.
    5. Term Loans: Terms loans are specifically suited for long-term projects. Here, one can avail the required amount against certain security. The loan amount needs to be repaid in instalments during the loan tenure, which is usually 10 to 30 years. Term loans can be taken against the property or any other asset of the seller. In many cases, top-up facilities are also available if more funds are needed.

2. Impact Analysis: Certain changes are carried out in the systems to increase their efficiency and meet the needs of the changing times. The impact analysis helps analyse the impact of the changes carried out in the systems. This ensures that the changes are working as intended and there are no inaccuracies.

3. Application security: Financial data held by the banks and financial institutions are sensitive. Therefore, security cannot be compromised at any instance. This makes security testing an important aspect of trade finance modules. Therefore, as trade finance involves an international transaction, security testing ensures that the transactions are carried out in a secured manner.

4. Application performance: Trade finance involves a multitude of transactions. Therefore, it is important to determine the system’s performance to ensure that it caters to the requirements of each product and instrument.  Loopholes in the performance are identified and corrected to ensure the smooth running of the systems.

Why Yethi for trade finance testing?

Yethi has been one of the preferred QA service providers for banks, financial institutions, and insurance across the world. With expertise in the banking and financial domain, Yethi provides complete software testing solutions, especially when testing trade finance modules. It includes functional testing, non-functional testing as well as advisory services.

We have tested all the functionalities of the Modules and Submodules like Letters of Credit (Export LC & Import LC), Bank Guarantee (Inward BG & Outward BG), Bills [LC Bills (Import Collections & Export Collections) & Non-LC Bills (Import Collections & Export Collections)]. We have tested multiple Trade Finance applications like Oracle FLEXCUBE, Infosys Finacle, Intellect, and more; also covered Trade Finance products like Bill Collection, Letters of Credit, Bank Guarantee, Open Account for Trade, C2C Transactions for Trade, and B2C transactions for Trade

With its plug and play banking aware solution Tenjin, Yethi brings distinctive and intuitive features with robotic capabilities that can learn and re-learn the applications. This codeless test automation solution is easy to integrate with all banking and financial platforms and ensures holistic testing of systems and software in a quick and time-bound manner regardless of the complexities of the transactions and updates.

In a Nutshell

Whether it’s B2C transactions for trade or C2C transactions for trade, trade finance is important to secure the exporters and importers. Equally important is the functioning of the trade finance module in an accurate and hassle-efficient manner. Periodic testing of the modules ensures that there are no security threats, and the module satisfies the established quality thresholds.

All you want to know about testing Finacle Wealth Management Systems

Wealth management is a support advisory service offered to the customer in effectively creating a long-term/lifetime investment plan. The advent of financial technology has been noticed in the Wealth Management also, as a result it has left an immense impact on the service. For the last several years, financial organizations are using multiple technologies like chatbots, artificial intelligence, blockchain, cryptocurrency, neo banks, Robo-advisors, and other digital solutions, to streamline the front-to-back-office operations and enhance the productivity of the advisors to offer outstanding services to the customers. 

Understanding the customer need of the hour, the financial services and solutions providers build a multi-module CRM platform that will not just provide the finest investment advice to the clients but will manage the end-to-end wealth management process. Finacle, being an industry leader, offers a comprehensive financial solution. Finacle’s Wealth Management Systems allows banks to provide new services and products in a time-bound manner besides the traditional banking services. Thus, many banks and financial institutions have opted for Finacle Wealth Management System as their trusted CRM platform to offer efficient services and strengthen their customer portfolios.

The Wealth Management Systems handle a series of workflows like defining financial goals, planning investment, creating & reviewing the portfolio, planning for estate & tax, planning assets strategically, family philanthropy, managing cash, managing & analyzing diversified investment plans, reporting, and more. As the systems are created to streamline all the processes, it requires end-to-end testing with a massive focus on handling risk and compliance and helps in reporting. As stakes are high in managing the portfolios of high-net-worth individuals and retail customers, any inaccuracy can lead to huge losses. Hence, testing the wealth management system becomes an inevitable step to ensuring system performance and protection against massive loss. This article serves as a guide to test wealth management systems.

Reasons for testing Wealth Management Systems

Following are the major reasons why wealth management systems must be tested:

  • Optimization of Customer Experience: Wealth management systems are the backbone of customer wealth creation. Therefore, their accuracy and timely service are important to optimize the customer experience. Acceptance testing can be helpful to ensure that the software meets the expectations of the users.
  • Obtain Understanding of Workflows: Testing helps in obtaining a thorough understanding of the workflows of the organization and assessing whether all the important workflows are operating independently. As banking systems handle innumerable transactions and, therefore, possess multi-layered workflows and are highly complex, understanding the workflow and testing the systems become a necessity. It also assures their security and transparency.
  • Detection and Correction of Performance Issues: Testing will allow the organization to determine major issues and loopholes in performance. This can create major obstacles in the performance of the systems and overall customer experience. After detection, the anomalies can be corrected to obtain desired results.
  • Improves User Retention: System testing helps to know how many users the system can accommodate, and the time taken to perform various functions. This will give a thorough idea of the performance of the system and the user-specific changes that shall be undertaken. This makes the system more user-friendly and helps in overall user retention.

Challenges associated with testing Wealth Management Systems

Following are the major challenges associated with testing wealth management systems:

  • Security Loopholes: Financial data is sensitive and vulnerable. Therefore, security is paramount. There might arise variations in networks and operating systems that can lead to a lapse in security features. Therefore, software testing becomes important to ensure that it adheres to the set security standards across all the networks, operating systems, and platforms.
  • Multiple Devices: Another important challenge that arises in the testing of wealth management systems is their operations on multiple devices. Each device may have separate configurations and installations that directly affect its security levels. For instance, a device operating in one OS may be more secure than the one operating in a different OS. Also, certain devices may have different functionalities and software support that can lead to reduced efficiency.
  • Lack of Knowledge: Testing experts are not necessarily finance experts. While they specialize in software, they may lack knowledge of the finance domain. This can create obstacles during the testing process that should be taken care of. Appropriate coordination between the testing and finance teams can help mitigate this challenge.

Testing Finacle Wealth Management System

Following are the major tests associated with Finacle Wealth Management Systems:

  • UI/UX Testing: A proper UI/UX is essential to ensure that the customers have a smooth experience. UI/UX testing optimizes the overall customer experience and helps organizations adopt a user-friendly approach to designing and maintaining systems.
  • Functional Testing: Here, the systems are tested for their functional designs and specifications. This is to ensure that the specifications as required by the users are satisfied by the systems.
  • Performance Testing: Performance testing is key to ensuring that the system delivers performance up to the benchmark when it comes to responsiveness, sustainability, and stability.
  • Security Testing: Security testing helps identify loopholes in security breaches and mitigate the associated risks. Data handled by wealth management systems are susceptible to manipulation, hence it is essential to ensure the security of the systems and data.
  • Integration Testing: Integration testing is essential to check whether different units and functionalities of the software interact properly. While the units and functionalities are tested separately as well, it is essential to test them in sets to ensure that they work properly when operated together.
  • Data Migration Testing: Technology keeps on evolving, and therefore, it becomes important to optimize the existing systems or create new ones. This involves the migration of data from one system to another which can make data vulnerable to security breaches and inaccuracy. It, thus, becomes important to conduct data migration testing to ensure that the migrated data matches the original data.
  • Regression Testing: Certain changes might be carried out in the existing codes and backend of the software. In such cases, it is important to conduct regression testing to ensure that it does not impact software functionality and that an application still functions as it was expected.

Important aspects of Finacle Wealth Management Systems

Following are the important aspects of Finacle Wealth Management Systems:

  • A Complete Solution: The Finacle Wealth Management Systems offer a complete wealth management solution offering a wide range of investment products and services. It allows transacting across multiple different asset classes including, but not limited to Equity, Mutual Funds, Insurance, Bonds, Futures & Options, Exchange Traded Funds, etc.
  • Client-Focused Approach: Finacle Wealth Management System ensures a holistic understanding of the client requirements and empowers experts to make better decisions. It facilitates the evaluation of clients’ risk scores and builds an ideal and personalized portfolio and visualization of the same. It also alerts whenever there is a deviation from the portfolio.
  • Low Cost to Income Ratio: Finacle Wealth Management Systems ensures automation and better operational efficiency. While the front office becomes smarter, the back-office operations witness efficient operations.
  • Use of Advanced Technology: Finacle Wealth Management Systems use advanced technology that is open for collaboration and works on the principle of interoperability. The systems are cloud-ready and can support multi-entity, multi-lingual, multi-currency, multi-national, and multi-time zone operations.

Therefore, it is important to ensure that the Finacle Wealth Management Systems are tested for their performance, accuracy, and functionalities for running the operations in an orderly manner.

At Yethi, we have undertaken various transformational projects, project upgrades and Business-as-usual. We have tested Finacle Wealth Management Systems for some of the major banks and financial institutions. Our end-to-end testing services include functional (Data Migration Audit, System Integration Testing, User Acceptance Testing, Regression Testing, and Automated Testing and non-functional testing (Performance Testing, Security Testing, and UI/UX Testing). Our Test Centre of Excellence is equipped to offer extensive advisory services and reengineer the process.

Yethi’s 5th generation codeless test automation solution, Tenjin a plug-and-play banking aware solution, which minimizes the manual effort and speed up the test execution regardless of the complexity and number of updates. Tenjin’s intuitive features and robotic capabilities enable learning and adapting to application updates with ease.

What Are the Different LOS Workflows? Why Is It Important to Test Different LOS Workflow?

The lending process is one of the service pillars of every bank and financial institution. Lending services support financial organizations and allow them to calculate high ROIs. Banks, NBFCs and other financial institutions offer various types of loans to their customers at an interest rate fixed by the organizations. Lending processes before were all about heavy paperwork, which caused unnecessary delays, confusion, and burdens of handling tons of papers and documents of customers. Since technology has taken over, the lending process is more consolidated, organized, and systematic. IT companies and service providers have developed and introduced various Loan Origination Systems (LOS) to support the loan application processing based on specific requirements by banks and financial institutions.

Loan Operating System is a technology-driven process. It controls and monitors the workflow of loan processing and reduces the delays and inefficiencies of handling paperwork. Loan application processing workflows are the most critical feature of the loan origination system. The loan applications monitoring starts at the initial stage and continues till the process is approved. The loan origination system also allows performing the work steps at different locations at the time, maintaining control of flows. Business analysis is also a pivotal stage for loan application.

The process workflow of Loan Origination System:

The approval process of loan origination system goes through many stages. The origination process varies from lender to lender, manual and automatic. Under the whole process loan origination system is responsible for everything that occurs from pre-qualification to loan approval and disbursement. The process workflow in LOS is same as the conventional process. There are only seven stages that are critical components of the loan origination process:

  1. Loan eligibility:

The first stage is pre-qualification stage of the loan origination process, where the borrower must submit important identical documents to the lender such as ID proof, address proof (Aadhar, Voter ID, Pan card), current employment information including salary slip, credit score, bank statement, and previous loan statement to verify the customer profile for loan eligibility. After thorough credit verification and validation of the customer documents, the lender determines if the customer is eligible for availing the loan. After approval, the borrower can move to further process.

  1. Loan application:

It is the second stage of the loan origination process. Under this stage, a borrower files the loan application through online submission of their documents as most of credit companies and financial institutions are following the new technological paperless process.

  1. Application processing:

Processing the loan application is the third stage of the loan origination system. Under this stage, the department receives a submitted application and reviews for its accuracy and completeness. If the application is incomplete, it is returned to the borrower for completing the missing information. The funding is to some corporate sector business analysis is compulsory.

  1. Credit Underwriting:

Credit underwriting is the fourth stage of loan origination process. This stage begins if the application is completed. Each credit department takes into consideration a variety of different components such as the credit score of borrowers, risk scores, and many more. Due to the technological changes, this process is now automated with the help of a rule engine and API integrations with credit scoring engines in LOS.

  1. Credit decision on loan process:

It is the fifth stage of the loan origination system. This stage begins after the results received from the underwriting process stage. Under this process, the application is approved, denied, and sent back to the borrower or originator for additional information. The certain information which is not matched with the rule engine set will be changed according to the parameters fixed. The changed parameters can be in the form of the reduced loan amount or increased interest rates.

  1. Quality analysis:

This is a critical step as the lenders analysis the application a final time before loan disbursal. Under this process, the application is sent to the quality check team for analyzing the critical variables of the application and comparing with internal and external rules.

  1. Loan disbursement:

It is the last stage of the loan origination system. Loan disbursement process starts after checking if all necessary documents are submitted and undergone the requisite quality check. Most of the loans are sanctioned after the documents are signed, but some loans like second mortgage loans, business loans, loans against property, and many more require additional time for legal compliance reasons.

Why is it important to test different LOS Workflow?

It remains a focus for financial organizations to improve the LOS workflow in the current market scenario. An organized LOS workflow improves customers’ experience and return on investment. With digitalization of LOS workflow, it has become essential for organizations to test different LOS platforms. Systems must undergo thorough functional testing (user acceptance testing, UI/UX testing, integration testing, regression testing, and more) and non-functional testing (performance testing, security testing, data migration testing and more) process to perform without any technical errors. Let us see the importance of testing different LOS workflows,

  1. Data entry and verification – Maintaining data integrity and security are the focus of any organization. By testing the LOS workflow, a team can ensure that the data entry process is verified. They can further ensure that there is no misleading or missing information that is mandatory for the process.
  2. Underwriting – The LOS workflows testing improves credit underwriting. The team can easily access the customer data and information to validate their eligibility and decide whether to accept the risk of lending to a particular person or company. Testing the LOS workflow allows the team to make credit-related decisions quickly and easily.
  3. Disbursement – Testing the LOS workflow facilitates the disbursement process. After the system carefully analyses the information and the credit approves lending to a particular customer, the disbursement process becomes extremely easy and seamless.
  4. Post Disbursement – After the loan is disbursed, the system still tracks the loan application process. The system actively validates information like tenure, moratorium, calculated interest rate and more. Testing the LOS workflow process enables post disbursement process.
  5. Reports – A system has the reports used for various decision-making purposes. LOS workflow testing ensures that the report generation is quick and error-free. The testing process also allows the extraction of an accurate report from the system whenever needed. 

Testing the LOS workflow is equally important as testing the Loan Management System. Following is the process flow that is validated during the LMS testing.

  1. Loan onboarding
  2. Loan Repayment
  3. Loan Servicing
  4. Delinquency and NPA processing
  5. Collections

The credit decision is the main feature of every loan process. The system analyzes the information of customers, which helps the lenders make the right credit decision to accept the risk of lending to a particular person or company. A customer portfolio is beneficial to evaluate the capacity of the borrower. It is also important to mitigate the lending risk, and the organization must have the risk management system ready to help revaluate the customer profile. LOS workflow testing validates the system’s capacity to handle the end-to-end lending process.

Reduced turnaround time is an important criterion to test LOS workflows. Hence, the loan origination system is tested to check the system’s response time and the quality of the process. Since the loan originating systems are updated frequently with information, testers must run regression tests to ensure that the frequent changes are not damaging the system performance. Testers must also frequently write functional test cases and test data to incorporate the functional changes in the system. Designing Migration test cases prior to execution is a critical step for a team because it ensures that the system performance remains unaltered during the data migration process.

Yethi’s experience testing different LOS workflows

Yethi’s testing approach is based on complete business analysis. We understand your business strategy, direction, and objective of technology transformation and identify the role of individual processing engines within the bank’s overall IT Architecture. We also make a considerable effort to understand your system integration requirements and the impact parameters.

We build a thorough test strategy and plan to ensure that we meet all your testing requirements. We also design functional test cases based on test data, regression test pack, and migration test cases to test execution. We manage the defects by defect categorization, metrics reporting, and test closure report with an enhancement analysis report for future reference. We also measure the scope of regression and execute the regression scenarios.

Yethi’s fifth-generation codeless test automation solution, Tenjin validates your LOS by automating the testing process. Its intuitive features and the Robotic UI discovery engine work flawlessly across multiple applications. It is a fast and scalable test automation platform that ensures high system quality through end-to-end testing.

Handling Risk & Compliance in Payment Systems

Payments are synonyms for banks and financial institutions. It forms the very existence of the BFSI sector, which means that the industry can never meddle with the intensities and contingencies of the payment systems. Daily payments and transactions worth billions of dollars take place, which exposes the process to multiple risks simultaneously.

As the payment system is steadily shifting to the digital platform, it further raises a serious threat and concern regarding the security of the payment platform. Fraud and operational risks are high in payment innovations. Organizations are doing their bit to control the risks and threats, but it is not quite enough to ensure the complete security of the transaction and payment systems. There are three categories of risk in the payment systems. Let’s look at what are those.

  1. Fraud – A payment transaction that is carried out in a deceptive way and leads to huge financial loss. This kind of payment transaction falls under fraud risk category.
  2. Operational – The different types of human and technical errors that interrupt the clearing and settlement of a payment transaction may lead to financial loss. This kind of payment transaction falls under operational risk category.
  3. Legal – When the rights and obligations of payer and payee engaged in payment transactions are subjected to considerable uncertainty, it may lead to loss. This kind of transaction falls under legal risk category.

A brief on payment systems

Payment and financial transactions are contracts exchanged between two or more parties in the form of cash or services. A work of a payment system is to manage and settle the financial transactions and keep a record of such transactions for future reference. The exchange is made possible by modules that include instruments, people, institutions, rules, standards, procedures, and technologies. The most common payment system is an operational network that links people to bank accounts and exchanges monetary values and services through registered financial hubs.

Earlier, the payments and transactions were exchanged in more conventional ways. But with digitalization, a digital payment system has emerged. Today there are multiple payment instruments and channels like RTGS (Real Time Gross Settlement), IMPS (Immediate Payment Service), NEFT (National Electronic Funds Transfer), AEPS (Aadhaar-enabled Payments), UPI (Unified Payments Interface), SWIFT, SEPA, Wallets, Card Payments, ATM/POS transactions, Internet Banking, Mobile Banking, Third-party apps, Kiosk, and Micro ATM. Each payment system has its protocol or procedure, whether physical or electronic, and each one must be regularized and tied to compliance.

Managing risk in the payment systems

Before we learn how to handle risk in the payment systems, we must understand what payment risk is and what is the risk in payment systems. Let us explore them one by one. There are two types of risk in financial transactions – credit risk and liquidity risk. When one party does not receive the outstanding amount in the transaction process, this is credit risk; and the liquidity risk is when one party owes an amount but is unable to pay on time. Payment risk arises when a company incur loss due to some unforeseen payment events. Since businesses have long shifted their focus to digital transactions, a massive volume of online transactions and payments happen on the digital platform, which exposes them to payment risk.

Many companies have been fighting continuously against these frauds with their strong management strategies. But it is hard to remain resistant to the payment risk or forgery. It is hard to determine if a transaction is approved or if there is any fraudulent activity involved. However, an inaccurate evaluation can lead to a serious predicament like harming a company’s reputation and the monetary loss that may become hard for companies to overcome. Hence, managing the risk of a company by identifying threats, monitoring, and controlling to minimize the negative impact of risk on the company becomes an essential step.

Various sources affect the company, such as technology issues, financial uncertainties, legal liabilities, management errors, natural disasters, accidents, and more. All these can lead to risk in payment systems. With so much risk involved in payment systems, it is only fair to adhere to the rules and regulations and remain compliant with the guidelines. Risk and compliance go hand in hand. Risk is linked with the area of uncertainty, which focuses on the internal issues of an organization, while compliance is linked with adherence, which focuses on the external regulatory bodies.

What is Payment Compliance?

Shifting to digital payment has made many organizations and government to be more vigilant with the payment systems. They are more stringent in setting up guidelines now. For payment systems to remain compliant with the rules and guidelines issued by the government, company must follow a specific set of industry standards for risk avoidance. It is an essential step, which allows organizations to protect their payment systems from risk and fraud by reducing data breaches, cyber threat and more. It protects the companies’ data, improves goodwill, and avoids several fines.

Digital payment systems from the past few years have created uncertainties for financial institutions. As the payment systems have become digitalized now with the emergence of internet banking, smart cards, and mobile banking, banks and financial institutions are embracing laws and regulations to remain more compliant with the changes in the payment systems. Financial institutions study the compliance guide to payment systems thoroughly and understand the rules about all types of payment systems before offering guidance to the customers. The below mentioned are types of payment compliance,

  1. Payment card industry data security standard:

Under this type, a set of standards are developed to ensure that all companies accepting, storing, processing, and transmitting credit card information maintain secure methods of doing so. The PCI security standards council upholds it. The standards are made to protect such companies from high-risk merchant accounts.

  • Merchant ScanXpress software:

This method of compliance automates the underwriting and onboarding process. For each merchant, it provides you with a calculated risk scorecard for helping most of the businesses for avoiding risk.

  • KYC compliance:

It is compliance that involves identifying and verifying client details before opening their bank account. Monitoring and verification checks are conducted periodically. For risk-free businesses, merchants must follow the process of KYC compliance.

  • AML compliance:

The full form of AML compliance is anti-money laundering compliance that protects companies from criminal monetary activity and international transactions fraud. The rules of such compliance help detect the suspicious activity of money laundering and terrorist financial attempts.

Apart from the ones stated above there are also a few more that deserves a mention, as it ensures that the payment system remains compliant.

  • Money/currency
  • Bank checks
  • Smart cards and stored value products
  • Mobile banking
  • Allocation of loss for check fraud
  • ACH networks and NACHA Rules
  • Remittance instruments
  • Credit union share drafts
  • Credit CARD Act and disclosure requirements
  • Automated teller machines (ATMs) and automated intake of ATM deposits
  • Letters of credit
  • Internet transactions
  • Corporate account takeover
  • CFPB regulations regarding international transfers & CFPB changes to Regulation Z
  • FRB gift card rules
  • High-to-low debit posting
  • CFPB investigation of overdraft programs
  • Unfair, deceptive, or abusive acts and practices (UDAAP)
  • Payable through drafts & Documentary drafts
  • Wire transfers, including security procedures for in-person wire transfers and defences to unauthorized wire claims
  • Responsibilities of ODFIs and RDFIs regarding high-risk originators and questionable debit activity
  • Unlawful Internet Gambling Enforcement Act
  • Online authentication, including single-factor authentication resulting in bank liability
  • Home banking
  • Consensual security interests in deposit accounts

Importance of testing while handling risk in payment systems and maintaining system compliance

The national and international regulatory entities update payment systems with changes very frequently. As a result, banks and financial institutions are always left with challenges to incorporate those changes in very short notice. The systems in banks and financial institutions may face heavy damage if they are unadaptable to these changes. They always come with certain challenges and if banks fail to update their systems with these regular changes, they will fail to satisfy their customers.

Testing offers strong support that helps the organization to remain updated with sudden changes and always remain in the forefront to handle risks. Testing helps in finding out how well the systems in banks work. It also aims to find out errors in the system programming. Testing at regular intervals is also compulsory for maintaining a risk-free company while handling compliance with many payment methods. There are many different types of testing: UI/UX Testing, Functional Testing, Performance Testing, Security Testing, Integration Testing, Acceptance Testing, Data Migration Testing, Regression Testing, and more, which validates that the system functionalities in fastidious situations like quick change in payment system guidelines. After testing all the pros and cons of the company, reporting is the last process that must be followed.

Conclusion:

The only purpose of risk management is to identify problems and apply different measures to reduce them. Banks and financial institutions must follow laws and regulations to prevent fraud and risk impact. Systems and software being an integral part of banks and FIs, they must be obligated to payment compliance. Only testing can validate the system functionalities and performance. It ensures that they remain compliant with the payment systems guidelines.

At Yethi, we have tested the payment systems for national and global banks, NBFCs and other financial institutions. We have tested various functionalities of payment systems across multiple channels like internet banking, mobile banking, wallets, agency banking, ATM/POS, wallet apps, third-party apps, KIOSK, and micro-ATM. We use different API levels as middleware/switches to connect with Core Banking and other gateway/networks. We have executed functional testing, interface testing, performance testing, API testing, and security testing to validate the processes like customer onboarding, customer authentication through a pin, biometrics, and token, payment initiation, multi-level authorization, payment processing, and inquiry and statements.

Our 5th generation codeless test automation engine, Tenjin, automates the entire software testing lifecycle from execution to build and manage, continuous delivery and defect reporting. Tenjin can execute test cases across applications and devices. It has various adapters and has a provision for adopting new application adapters within a few weeks. It can identify actual defects versus expected defects for field values and validate structured messages in SWIFT. Tenjin has a UI to define test cases and offers continuous support in the delivery pipeline. It can detect and report defects with ease.