The Glaring Business Value of Automated Testing for Banks

Mike Togle
June 5, 2017

Innovation and speed to market in today’s “age of the apps” pose a dilemma for the modern business. On one hand, consumers expect the same seamless customer experience, simplicity, and swiftness across all digital products and solutions they use. On the other, banks and firms in the financial services sector typically plod with legacy enterprise software. Often with numerous integration points to other systems and solutions, the effort to introduce change seems like a superhuman task moving at a snail’s pace.

This is where automated testing and Continuous Integration and Delivery (CI/CD) can come into play. There is an assumption, however, that Agile methodology is required to implement test automation (it’s not). Atlassian explains through a tasty metaphor based on an American snack staple that continuous builds and test automation are ‘like peanut butter and jelly’: they taste good on their own, and also go well together.

This article is divided into three parts. It first reviews the business case for automated testing, then looks at how test automation, which essentially is testing often, earlier, and faster, can be successfully implemented in an enterprise. Finally, it considers how automated testing, when combined with CI/CD, can deliver double their individual ‘tasty’ promise, within the context of the banking and finance industry.

What’s the business value of automated testing?

“If it isn’t immediately obvious to everyone, it actually delivers on that promise. [Test] automation, if done right, radically improves productivity.”Kim Deloria, Project Manager and Deputy Lead for Software Quality Engineering at SoftCon 2015

The key questions of an enterprise considering test automation, particularly for financial institutions, are likely the ROI or return on investment, and the cost of implementation.

Consider that automation dramatically decreases the cost of manual testing by as much as five times. Meanwhile, the cost and headache of fixing a software bug later in the development cycle, or worse, when software is already in production, rises exponentially. ComputerWorld lists several British banks crippled by major IT-related downtimes, which not only slashed revenues, but also, presumably tarnished their brands when irate users were unable to transact and access accounts. Then there are regulations to comply with, such as when the US SEC fined Citigroup $7M for a programming bug that allowed it to submit incomplete reports for an unbelievable 15 years.

But is ROI in today’s era of digital transformation only measured in dollars and cents? Test automation is now considered an investment towards becoming more responsive to user needs and new business models. McKinsey points out that the returns from origination and sales, which account for almost 60% of global banking profits, is typically the focus of fintech startups. When users expect bank products to have the same ease of use as consumer software, and when nimble fintech players offer niche solutions that erode profit margins, the ROI of being dynamic in today’s lightning-quick digital age cannot be easily quantified.

Meanwhile, implementation cost can be managed by starting out with either a proof-of-concept for one application first, or contracting an IT vendor such as Pointwest for a managed Quality Assurance (QA) service.

Mr. Deloria’s fearless forecast for the financial sector is that it’s not a matter of if, but when. He relates that banks already have well-defined processes, which make them more automation-ready. “The investment actually goes to ensure that the automated testing framework most suited for the enterprise’s current and probable future use is selected,” relates Mr Deloria, “so we can build it right, then just continually enhance.”

As more and more testing firms and their customers use proven testing methodologies and frameworks, automation may eventually lead to integrated test labs based on standard industry templates. This means that enterprises may no longer need to share their entire application’s source code with testers, which could lend financial institutions a measure of security. Further, designing and creating fewer test cases cuts back on cost and implementation time.

In a follow-up blog article, we address the burning question of how banks can get started with automating their software tests and utilizing CI/CD.


Carry on a conversation with us through the comments below, or you can send a message or inquiry about our services for the banking and fintech industry.

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