Why financial services firms are rewriting their testing strategies

Is testing a time and money pit in your firm? In a new era of AI and automation tools, testing gets the paradigm-shifting upgrade it deserves.

In the financial services sector, IT teams allocate around 30% to 40% of their budgets to testing, as reported by the National Institute of Standards and Technology (NIST). Moreover, over 80% of these testing efforts are manual, which is not only time-consuming but also prone to errors.

To make matters worse, these large budgets and time drains are true even for firms actively running automated testing solutions. Indeed, test automation has been around for decades.

That said, many automated testing tools have historically yielded low ROI because teams discontinue their use post-implementation. Why? Manual testers must relay requirements to coders for automation, creating webs of inefficiencies. Additionally, legacy solutions are fragile, causing frequent breakdowns and requiring significant maintenance time.

Furthermore, 46% of financial services businesses struggle with test data management. These firms must ensure they are properly masking and securing customer financial data while complying with various regulatory requirements.

Times are changing, though. Modern test automation solutions are ushering in an entirely new realm of what’s possible, putting many of these historic challenges in the rear-view mirror. Testing has officially reached a new era, especially with the incorporation of AI.

The next generation of testing

Modern, automated continuous testing has arrived. This paradigm-shifting approach empowers financial services organizations to deliver high-quality results through automation-led testing. This not only significantly increases capacity, but firms can also finally ensure regulatory compliance and fully anonymized processing of customer data as part of the process.

Additionally, a native low-code approach allows testers to create their own automations, freeing developers for mission-critical work. These solutions integrate seamlessly with existing tools and interact with any application, enabling full-scale, end-to-end testing across legacy, desktop, modern browser, and mobile applications.

Adopting these modern tools, firms have seen a 50% reduction in test cycles, a two- to three-fold increase in automated test coverage, and up to 30% reduction in overhead costs.

These solutions, designed for enterprise implementation, feature reusable component libraries shared across test, IT, and business process automation teams. And by eliminating the tester/coder divide, test automation is put directly in the hands of testers who understand the processes.

Modern solutions operate across all platforms, enhancing robustness and reducing maintenance needs.

Key statistics

• 80% of testing in the financial services industry is manual due to the complexity of the application environment

• 50% of total software development time in the financial services industry is spent on testing

• 30–40% of a typical financial services IT budget is allocated to application testing

What sets modern testing solutions apart?

Core system upgrades and migration projects

Financial services firms have heavily invested in core systems essential for customer services. These systems, under strict regulatory oversight, require extensive testing for quality and reliability. Understandably, testing is mandatory before implementing any system updates or changes.

Banking systems

Today’s leading testing solutions automate various tasks during core system upgrades or migrations, such as functional and regression testing of common core banking system (CBS) applications (e.g., Oracle FLEXCUBE, Temenos Transact, Finastra FusionBanking). This ensures the system functions as expected.

Insurance systems

Insurance companies have complex application landscapes supporting underwriting, claims management, policy administration, and billing. With digitalization, companies adopt new technologies like mobile apps and chatbots, further complicating the landscape. Robust automation and testing strategies are essential, whether using full application suites like Guidewire, Duck Creek, or custom solutions.

By integrating native capabilities, adaptable API usage, and advanced user interface automation, modern test automation can efficiently and reliably test a wide range of target applications.

Leading test automation solutions also automate data migration tasks, minimizing errors and ensuring accurate migration of sensitive customer data. After migration, teams can automate the creation of training materials and tasks, reducing training time and enhancing end-user adoption. Additionally, firms can optimize workflows for change management, project management, and reporting, streamlining projects and reducing costs.

Generate anonymous, compliant testing data

One of the most groundbreaking developments in modern application testing is tools creating fully anonymous and safe-to-use testing data for use within the testing environment. These solutions leverage advanced automation technologies to extract, transform, and load data from diverse sources. They create realistic test environments using synthetically generated financial data, ensuring strict adherence to data privacy and industry regulations.

Data-driven testing enables dynamic data consumption by test robots to assess various scenarios. In case of test failures, test environments can swiftly reset, allowing for executing scenarios to ensure thorough application testing.

Support for hundreds of technologies

The application landscape across banking and insurance is immense. Deploying a solution that doesn’t play well within the existing tech stack would only make things more complicated than they already are.

That’s why best-in-class testing solutions support nearly 200 different user interface (UI) and API technologies with a single workflow designer, eliminating the need for programming skills. This capability allows testing across diverse applications, from legacy mainframes to modern cloud-based systems. By integrating native capabilities, flexible API usage, and cutting-edge UI automation, modern solutions can test an extensive array of target applications.

Dependable, always-on application testing made possible within an automation platform

Financial services customers demand constant access to their accounts and applications. Offering this level of service requires always-on availability on the backend, too. Software upgrades, bug fixes, and the like require testing. But the last thing financial services firms need is testing creating a bottleneck to deployment. Modern testing tools—especially when implemented as a component within a broader automation platform—ensure that issues are resolved more quickly, testing-related downtime is virtually eliminated, and dev is pushed to prod in record time.

Automation for mobile and cross-browser applications

Contemporary consumer trends require banking applications to be compatible with all browsers and mobile devices. Modern automation platforms provide a unified solution that automates functional, integration, and regression testing across mobile apps and web browsers, eliminating the need for complex integrations or custom scripts.

Make sure to look for platforms that utilize advanced image recognition and machine learning technologies to ensure high accuracy and reliability, even in complex and dynamic environments. With these advanced tools, we've observed that organizations can achieve an automation rate of 80-90%, significantly surpassing the 20-30% achieved with legacy tools. This efficiency is due to the platforms' ease of use, robustness, and reduced reliance on coders for managing automation.

Conclusion

Continuous testing is pivotal in the financial services industry, addressing challenges posed by manual testing and legacy systems. Modern automated solutions offer transformative benefits, reduce costs, improve efficiency, and enhance regulatory compliance. By empowering testers with low-code tools and integrating seamlessly across diverse application landscapes, these solutions ensure robust testing and reliability.

Embracing automated testing not only meets regulatory standards but also enhances customer service and operational resilience in an evolving digital landscape.

Choosing the right testing solution is crucial. UiPath Test Suite is available via the UiPath Business Automation Platform™. Test Suite stands out for its ability to address specific testing challenges in financial services, automating up to 80-90% of testing processes, significantly reducing manual effort, and accelerating testing cycles. With a low-code approach, it empowers testers to create and manage automations without extensive coding, enhancing agility and efficiency.

Read more about UiPath Test Suite.

The UiPath Platform ensures high reliability across diverse IT environments, from legacy systems to modern cloud platforms. It seamlessly integrates with existing tools, scales with evolving IT landscapes, and ensures compliance and security, making it indispensable for ensuring high-quality, secure banking services.

Dive deeper into modern financial services testing:

• Read "The Business Value of UiPath Test Suite," a study by IDC

• Get your free copy of the "Testing in the age of generative AI" e-book

Editor's note: this blog post was co-authored by Sam Bauman, Industry Marketing Manager at UiPath.