‘Testing’ is a word we’ve heard almost every day during the current Covid-19 crisis. Effective testing has arguably been the difference between countries winning or losing the fight against the pandemic. Countries like Taiwan and New Zealand have fared particularly well* in their battle against this disease with ‘testing’ being an important weapon in their armoury.
Effective testing is a key component with regard to building a positive outcome in many aspects of life – whether it’s in a health context like this or in other areas, like an economic setting for instance. In this short article I’d like to talk about the importance of ‘payments testing’ and the absolute necessity to get it right.
Payments testing – helping to prevent systems failure
Every bank and financial institution needs to rigorously test its digital, payments infrastructure. Banking executives and their technical teams are intensely focused on avoiding a payments system failure - getting it wrong has the potential to have hugely damaging consequences but are all institutions going about testing in the right way? The right type of payments testing is essential to avoid unwanted glitches and the knock on effects they can create.
As many will recall, in July 2018, TSB’s half-year results revealed that the technology meltdown they had suffered earlier that year cost them £176.4m and 26,000 customer accounts. The subsequent IBM report into the bank’s failed attempt to migrate to a new IT system found that TSB had not carried out rigorous enough testing, and that it had “not seen evidence of the application of a rigorous set of go-live criteria to prove production readiness”.
More recently in the UK the Confirmation of Payee initiative, which aimed to reduce fraud, has been so difficult to test and implement that many Banks are reluctant to participate in phase 2.
Successful payment testing is key to the future well-being of financial institutions and those they serve. Payment system failures have no place in the future of banking on numerous levels - from the view of the regulator, the end customer, shareholders, staff and the wider stakeholder spectrum.
The ‘right’ payment testing will help avoid a wide range of damaging situations.
What’s wrong with current testing?
At the same time as some institutions are experiencing such high profile failures, the payments businesses of all banks have been affected by unprecedented levels of change. While banks are busy developing the latest technology and working with new suppliers, their testing capability is lagging behind. Their current approach can be characterised as follows:
What’s being done to overcome this?
To keep up with this rapid level of technological change, banks and other financial institutions are spending huge sums on testing: on people, on one-use test environments and especially on trying to mitigate the significant risks present - all in the effort to head off the potential of a payment system failure and the potentially disastrous consequences. But are these efforts effective?
It’s questionable as to whether a change in approach is happening fast enough. Remember, the quicker and more safely you can test, the quicker the revenue flows from new initiatives.
Effective payment testing
Is automation the answer? Ultimately yes, but payments testing can be very complicated to automate. Stand-alone, often desktop-based simulators are almost impossible to automate effectively. Frameworks are then needed to control test data and collate results. This leads to a pragmatic, “silo” approach, but with many shortcomings. An overarching solution is required.
It is essential that testing reflects the real world, end-to-end process in full, with all its supporting interfaces and system foibles. This may involve testing legacy systems in parallel with new technologies such as Micro-Services. This is problematic with an array of stand-alone simulators.
Financial institutions firstly need to hold a fundamental review and change their approach to testing ahead of automation. This involves simplifying, investing to improve their current practices and then embracing automation with the latest testing tools and techniques. This investment in technology must rationalise, simplify and automate testing, and provide a constantly available and full regression capability. Covid has also highlighted that this test capability needs to be accessible from anywhere in the world by anyone involved in the design, development, testing and implementation of payment initiatives.
Institutions wanting to succeed need to take their testing beyond automation, as this alone is not the answer to assure the quality of your next software release. Only the proposed ground-up review of banks’ current approach to testing, coupled with a strategic investment in appropriate technology, will enable a move from the current state of basic payments testing to one of strategic business assurance.
Effective payment testing remains key to the future health of all banks and financial institutions around the world – partnering with a progressive, specialist provider will provide peace of mind in a rapidly changing, technologically driven, financial services environment.