Regulatory testing project of the year — HCL and Deutsche Bank

A DevOps solution for FATCA compliance: European banks have to implement FATCA tax rules for each national market in which they operate. So Deutsche Bank’s FATCA compliance app was necessarily going to be a sophisticated build. In partnership with HCL, Deutsche designed a pioneering DevOps solution.

European banks have to implement FATCA tax rules for each national market in which they operate. So Deutsche Bank’s FATCA compliance app was necessarily going to be a sophisticated build. In partnership with HCL, Deutsche designed a pioneering DevOps solution.

Compliance is increasingly driving software development and testing, and the complexity for software developers arises not only from the number of rules that have to be embedded in the code, but the number of different regulatory regimes that international firms operate in day-to-day.

This complexity usually mitigates against DevOps, where a guiding principle is to establish an environment where building, testing and releasing software happens quickly. Regulation-sensitive apps are more often built and tested in traditional Waterfall environments, where scrutiny of the process is easier. And because apps designed for regulatory reporting are not typically client-facing, their development and testing does not usually benefit from the feedback loops that help to drive DevOps.

Deutsche Bank has found a way of leaping that hurdle. With HCL as a partner, it has found a way to implement DevOps for its new app used for compliance with the US Internal Revenue Service’s rules for tax reporting abroad under the Foreign Account Tax Compliance Act (FATCA). The app is also used for compliance with the OECD’s Common Reporting Standards (CRS) legislation, which mirrors FATCA.

FATCA rules provide high level guidelines for reporting, leaving the finer details of implementation to each country’s own regulatory regime. And it is this mercurial character of FATCA — its requirement that non-US banks interface their local business needs with the global reporting requirements of the IRS — that made DevOps and a test-driven development approach the optimum solution, Deutsche Bank and HCL decided.

Work started on Deutsche Bank’s FATCA app in late 2015, with the QA & Testing work managed and driven out of Germany, by Venkatesh Gurumurthy, the Deutsche Bank director who leads the project. The app went live in 2016 and is now being used in over 50 different countries.

Deutsche Bank made an upfront investment in building test automation scripts; costs which were offset by implementing best practices in automation. “We started automating our tests before the first implementation itself, after just a couple sprints,” said Gurumurthy. “The result was that we were able to successfully implement a test-driven development model and caught bugs early, before the coding was completed.”

All seven releases of the FATCA app went into production on time. More than a thousand bugs were identified during the requirements and coding process, with only 4% of those being rejects (i.e. false positives).

According to Gurumurthy, the key to the project’s successful testing delivery was teamwork and coordination between the project teams. He said that the teams were ideally placed to perform testing for both technical and business aspects since they had developed a strong mutual understanding of how the app would be used in practice.

Krishna Raju, testing delivery head at HCL for Deutsche Bank, oversaw the testing of the app project together with Deutsche Bank’s Ramnath Gopalakrishnan from Deutsche Bank. The joint Deutsche Bank-HCL team achieved an automation rate of 75% using a variety of tools including HP’s Unified Functional Testing, IBM’s Rational Integrated Tester, and Jira’s bug management solution.

HCL’s domain centre of excellence helped provide testers with the high-level knowledge of the regulatory issues required for the project. “When the FATCA programme began, we had already written white papers on the issue,” said Raam Kumar, HCL’s global testing head for Deutsche Bank. “Our FATCA experts collaborated with our testers to get them up to mark on the relevant regulations.”

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