How Continuous Testing Cuts Risk in Banking and Financial Services

Banking and financial services (BFS) firms operate in a highly regulated and constantly evolving environment, where maintaining security, compliance and accuracy is critical. But, due to the industry’s risk-averse nature, decision-makers often hesitate when it comes to adopting new digital solutions.

That’s where continuous testing comes in. By ensuring that systems remain reliable, secure and compliant, continuous testing can cut risk and increase confidence in digital transformation initiatives.

In this blog, we’ll explore how continuous testing benefits the BFS sector by reducing risk and improving outcomes.

What is continuous testing?

Continuous testing is a test automation approach that allows development teams to test applications throughout the software development lifecycle (SDLC). It aims to identify and address issues early in the development process. This reduces risk, improves quality, and speeds up time-to-market.

Considered one of the core practices of DevOps, continuous testing integrates testing activities into the SDLC. It provides immediate feedback on the code quality and reduces the risk of defects in the codebase. This is achieved using automated tests to validate the functionality, performance, security, and other quality attributes of the software.

As an integral part of the continuous integration and continuous delivery (CI/CD) pipeline, continuous testing enables teams to continually test code changes. This ensures that apps remain functional, reliable, and secure throughout the SDLC.

In banking and financial services, continuous testing can reduce risk in 5 key ways. Let's check them out.

1. Ensuring security

Security is a top priority in digital banking and financial services. Data breaches, cyber-attacks, and fraud can result in significant financial loss. They can also lead to reputational damage, and regulatory penalties. This makes security testing a crucial component of continuous testing, enabling you to:

•     Test for vulnerabilities
•     Verify security controls
•     Detect and fix security bugs

Continuous testing can identify issues such as SQL injection, cross-site scripting, and unauthorized access to sensitive data. It also ensures compliance with security standards, including GDPR and Payment Card Industry Data Security Standards (PCI DSS).

Continuous testing provides a proactive approach to security that reduces data breaches and security incidents by finding and fixing bugs early in the SDLC.

2. Meeting compliance requirements

Banking and financial services are heavily regulated. This makes compliance a key factor in risk management. Compliance requirements include financial regulations, anti-money laundering (AML) regulations, and data protection regulations. Compliance testing involves testing the software to ensure it meets these regulatory requirements.

Continuous testing can help BFS companies detect and address compliance issues at an early stage. It can ensure that software meets the Dodd-Frank Act, Basel III, and the Foreign Account Tax Compliance Act (FATCA), for example. By ensuring compliance, it reduces the risk of penalties and reputational damage.

3. Enhancing customer experience

Customer experience is crucial in the banking and financial services industries. Customers expect fast, secure, compliant and reliable services that are available 24/7. Any downtime or glitches can result in loss of trust and loyal customers. Continuous testing enhances customer experience by identifying and addressing performance and functionality issues.

Performance testing ensures the software can handle peak loads. And functional testing makes the software capable of meeting user requirements. Continuous testing reduces the risk of downtime and glitches that can affect customer experience. It also allows BFS firms to give customers new features and functionality more frequently and with greater confidence, empowering them to better meet their customers’ needs.

4. Accelerating time-to-market

In the competitive banking and financial services sector, faster time-to-market is critical. BFS companies need to release new features faster to stay ahead of their competitors.

Continuous testing can help to speed up time-to-market by automating testing processes. It can detect and address issues early in the SDLC and reduce the need for manual testing.

Automated testing can run tests faster and more frequently than manual testing. Regression testing can detect issues that may arise with new features or changes made to existing ones. By reducing the time and effort required for testing, continuous testing can speed up time-to-market. It can also reduce the risk of delays and missed opportunities.

5. Reducing costs

Manual testing is time-consuming, expensive and prone to human error. By contrast, continuous testing can help digital banks and financial services reduce costs by automating the testing process. This approach enables issues to be detected earlier in the SDLC, when they’re less expensive to fix.

By ensuring software performs as expected, continuous testing can also reduce system failure risks and downtime. This, in turn, can also cut financial losses.

In summary

Continuous testing plays a critical role in mitigating risk and ensuring compliance in banking and financial services. It can help to identify and address potential issues early in the development process, reducing the likelihood of risk exposure and ensuring that systems remain stable and secure. By embracing the latest testing techniques and tools, you can be confident that your systems are robust, secure, and compliant with industry regulations.

As decision-makers in banking and financial services industry, it’s crucial to consider the benefits of continuous testing as part of your risk management strategy. By investing in continuous testing, you can significantly reduce your risk exposure, improve the quality of your software, and ultimately protect your customers' financial well-being. So, don't wait until it's too late – start implementing continuous testing today and cut your risk.