Three technological disruptions banks face and how to win the race with test automation

The industry is replete with test automation tools, both licensed and open source. Choices are far too many and it is challenging to identify the right tool. Investing in a wrong tool can rake in excess costs, and also bring down employee morale.

Srinivasan G Sankar Feb 22nd 2018

“Banking is necessary, banks are not” – When Bill Gates said this in 1994, not many people agreed with him. But with each passing year, we see that this statement is becoming more and more relevant. With decoupling of banking services happening at an alarming pace, banks are no longer competing with other banks; but rather their competition is now with niche technology players.

As technology companies have ventured into banking operations, banks are at a constant pressure to innovate and adopt newer and simpler ways of doing banking operations. Banks are forced to re-evaluate their digital strategy to build and offer what the millennials (aged 20 to 35) really want. Banks are also at a constant pressure to update their products and meet with all regulatory requirements, which in turn mounts expenses for banks.

A digital transformation project for banks and financial institutions have quite a few critical success factors. Ranging from complex integrations to business performance & reliability, digital transformation projects do throw up quite a few challenges for testing. And it also involves a higher risk of failure if not implemented with a well-tested system.

It is therefore crucial for banks today to invest on the right test automation strategy. The test automation strategy should be technologically relevant, scalable, adaptable, and easy to maintain all at once, while keeping costs low and ensuring high quality of testing.

The need to identify the right test automation tools

The industry is replete with test automation tools, both licensed and open source. The choices are far too many and organizations often find it challenging to identify the right test automation tool. Investment in a wrong tool can not only rake in excess costs, but could also bring down employee morale. It may eventually adversely impact the overall business-perspective on test automation, and may result in eliminating test automation from the organization’s quality assurance strategy.

Hence, it is important to factor in the costs of the tool, support, and technology landscape (product-tool fit, dev technologies, test management tool integration, and employee skills) in the organization to figure out which tool caters to most, if not all, of the organization’s needs. Another important factor to consider is the ability of the tool to stay in tune with the technological advancements to scale.

Considering all the above factors, here are the top three technological disruptions that are poised to transform the banking industry in 2018:

1: AI & Machine Learning:  

With artificial Intelligence and machine learning generating a lot of buzz, the way personal finance is handled is in for a major transformation. Machine learning is in use already by way of chatbots and robot advisors. This is going to be further expanded to personalized customer service, fraud detection and forecasting, cross selling, channelized marketing etc. This will necessitate a new approach to test with a high degree of probability to use machine learning code to test as well.

2: Mobile-first strategy

Only 11% of the internet users access e-commerce sites through desktop. The rest is all through mobile devices. This trend isn’t that far away for banks as well. Any customer-facing site should have a mobile channel. Quite a lot of banks are moving towards a mobile-first strategy while designing their websites. In line with this, testing tools and frameworks will have to focus more on mobile products testing as well.

3: New ways to pay

Peer-to-peer payments is a $1 trillion market sitting untapped. With tech players like Facebook and Snapchat venturing out into facilitating P2P (peer-to-peer) payments and digital wallets, banks have a choice to either adopt them or risk becoming obsolete. In such a scenario, testing should focus on integration testing and a wholesome end-to-end testing of payment systems, rather than piecemeal feature testing. And this will necessitate more reliance on test automation than ever before, with security testing, performance testing, and web services testing going mainstream.

With furthermore exotic technologies like blockchain catching up, the testing community sure has its task cut out to be relevant and to complement the tech advancements happening around us.

The author is BFSI Test Automation expert, Aspire Systems

Disclaimer: This article is published as part of the IDG Contributor Network. The views expressed in this article are solely those of the contributing authors and not of IDG Media and its editor(s).