If you reference The 2021 Global RepTrak 100, ranking corporate reputation for the world’s leading companies, there’s not one financial institution in touching distance of the Top Ten. Why is this?

It’s a complex situation. Since the global financial crash of more than a decade ago, financial institutions have been under huge scrutiny with a constant need to build reputation. Despite making good steps forward, it’s been a bumpy road.

Amongst the many positive advancements there has also been a number of damaging scenarios too which continue to dog the industry and its reputation.

In this brief article I’d like to cover one situation which can easily be avoided – if a bank or building society gets it wrong, it can have a devastating effect.

Payments testing – helping to prevent systems failure 

The ability to carry out safe and secure payments is one basic necessity and absolutely vital in maintaining customer trust and corporate reputation.

A quick Google search will outline a string of examples where well known financial institutions have suffered a payments failure and the catastrophic consequences suffered – the most recent example being reported in mainstream media less than a month ago.

Every financial institution providing banking services needs to rigorously test its digital, payments infrastructure.

Executives and their technical teams are intensely focused on avoiding a payments system failure – 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.

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, staff and the wider stakeholder spectrum.

The ‘right’ payments testing will help avoid a 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 and building societies have been affected by unprecedented levels of change.

While institutions are busy developing the latest technology and working with new suppliers their testing capability is largely lagging behind. Their current approach can be characterised as follows:

• the absence of either a permanently available test hub or integrated test environment
• the use of armies of staff often hired from external, specialist test resource suppliers
• a focus on component-level testing with full end-to-end testing only being used when absolutely necessary
• a per-project budgetary approach for both systems development and testing
• lack of automation in testing
• dependence on manual testing facilitated by a complex maze of simulators (‘stubs’), in-house developed tools and ad-hoc code.
• frequent squeezing of the final testing stage – the UAT – due to time and budget constraints.
• a “mixed” approach to DevOPS and Agile, changing the cadence of testing which can be complex to orchestrate with existing test tools.

What’s being done to overcome this?

To keep up with this rapid level of technological change, building societies, banks and other financial institutions are spending significant sums on payments 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.

What’s needed?

It is essential that payments 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 a bank or building society’s 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 building societies – partnering with a progressive, specialist provider like Iliad Solutions will provide peace of mind in a rapidly changing, technologically driven, financial services environment.

Anthony Walton is CEO of Iliad Solutions