Banking - What does really "Being Digital" mean

Financial Industry has always been driven by technology. Whether it was advent of ATM machines, Credit Cards or any new innovation, Banks have always adopted to better serve its customers. Recently we hear all about Financial Technology (Fintech) revolution, the companies with commitment to excellence and a superior customer experience.

While it appears that banks are being dis-intermediated, they still hold a position in the system because of clearing rules (e.g. PayPal can move money around, but depends on Banks for clearing) and as payments need to be made from one bank to another. However, this change has also made banks realise centricity of the customer. Customers now choose a medium- Mobile- as their preferred choice to transact; choose a service provider for a service that suits their purpose. The centricity of the bank as the service provider for many things customer needs has gone. As a fall out, niche and focus services are being launched in this platform by established as well as new entrants, Fintechs. And banks, themselves going digital even to the extent of Digital First as their objective, are embracing and aligning with Fintech players of various hues to their portfolio; drawing upon the talent from technology and Fintech companies to infuse similar culture within.

Fintech is real, it’s here, it’s disruptive, but it’s not going to change everybody’s life tomorrow. It’s going to unfold over many years in different ways. Banks know this and hence they have to and in fact begun exploring partnerships and alliances with Fintech companies, hire talent that comes from outside banking systems and embrace the innovation. In fact the FinTech companies will facilitate Bank’s ability to create more desirable, accessible and cost effective B2B and B2C services.

Banks and Fintech companies both today face a Digital imperative. Agile methods and Unified Test approach are key for their journey to the Digital Enterprise. Companies that do not create agile processes will be seriously hampered in their efforts to compete with innovative digital services being offered by their competitors.

Adoption of Agile

We are no longer in an era where you have a one-off back office migration and then stability for 5 to 10 years. Client expectations are demanding Banks to be Agile. The drive to Digital is miniaturing the services and building velocity to their launch. Agile facilitates this through the crushed timelines of Sprints, assembly of Sprints to Builds and facilitating through the Hardening phase the release all in weeks than months or years. It is also a methodology where people, process and tools have fallen in to place- transformed roles of Analysts, Developers , Testers and Product Managers ‘ collaboration facilitated through Continuous integration and Continuous development tools as also test tools to support those.

This means a constant monitoring of the market by banks, identifying the most efficient and client-friendly solutions being phased in by competitor institutions. Banks need news, research and data which can be analyzed by the system, thus combining structured and unstructured data to create new and unique proposition for all generations of customers.

Globally, more and more banks and financial institutions are moving rapidly to embrace Digital. Agile platforms are essential to banks’ digital strategies. These “Agile platforms” will allow banks to engage with their clients to a much greater extent and more speedily than before.

While large financial institutions and Fintech startups are fundamentally different with regards to their ways of working, they both need to rely on the agile product development lifecycles. At the heart of this approach is the speed at which a company can create a minimum viable product (MVP). The MVP refers to ‘the version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.

Unified Testing Approach

?The face of testing is also changing in the banking sector with the explosion of Fintech. Not only that, it is now also imperative that financial organizations ensure their applications are of high quality, user friendly and provide a flawless experience to a customer who needs to be and is educating themselves about the Fintech services on offer so they are better equipped to spot and avoid any scams.

The upshot of all this is that it becomes critically important to devise an end-to-end Unified testing methodology incorporating the full range of testing techniques, including test coverage of business requirements and workflows, performance and functionality, data integrity and of course concurrency. It also becomes of paramount importance to test much earlier on in the development lifecycle and roll out upgrades and new releases more frequently, admittedly with less functionality per iteration, but crucially with fewer errors and glitches for a better customer experience.

The way forward for Fintech testing is Acceptance Test Driven Development, (ATTD) whereby the customer is brought in to collaborate on the testing process, so they can understand Customer expectations and Behaviour before starting to write the code.

The Fintech should align the Need-for-Testing with 5 key customer imperatives:

1.   Channel amplification

2.   Service accessibility

3.   Customer serviceability

4.   Data Privacy and security

5.   Simplification

To be effective in maintaining the quality and stability that customers have come to expect from an organization, QA and testing teams need to:

a.   Blend integration tests into the overall app lifecycle, resulting in a product that is of superior quality from top to bottom.

b.   Implement universal automation throughout the value chain, which streamlines test execution.

c.   Manage multiple apps, services, and platforms to guarantee smoother development of complex, sophisticated products.

d.   Functional testing has to be optimized across all digital and non-digital channels that customers interact with.

e.   Test environments need to simulate user behavior to ensure that the business experience is well-laid out and consistent.

f.   Use realistic data sets and efficient Test Data management to represent as many scenarios as possible.