As financial institutions continuously introduce and upgrade digital products and systems, the importance of thoroughly testing technological changes before going live has never been more critical.
In fact, QA is increasingly taking central stage and, as a result, testing processes have an impact on the financial product design and rollout at most banks, according to various industry insiders.
Given the high stakes involved in financial services, from regulatory compliance to customer trust, rigorous testing is an essential part of IT strategy.
While testing has long been associated with high workloads and cumbersome processes, smart technology is now revolutionising the field, making the entire process more seamless and efficient, according to Charlene Venter, a consultant at Varrlyn.
Testing new financial systems or products is often a lengthy and complex process, involving repetitive yet essential tasks such as evaluating transactions, dependencies, and performance, so ensuring robust testing is fundamental to modern financial technology development, Venter argued
“It safeguards the quality of the delivery and ensures that new systems or products meet the requirements and demands set by the business and IT teams for coding, functionality, business logic, and user experience,” she explained on the EU Consultancy website recently.
Neglecting to uncover issues before launch can lead to significant risks.
“The consequences can be enormous, from loss of customer satisfaction to reputation damage, financial losses, or even outages in other applications and systems,” Venter warned.
“An automation approach maintains test scenarios within the regression testing suite, crucial when onboarding new datasets.”
– Philip van den Emster
With the advancement of technology, testing is becoming one of the largest beneficiaries of automation. Financial institutions are increasingly leveraging modern tools to enable fully automated testing, covering everything from developing test cases to executing and validating them.
“Test automation can save a huge amount of work,” stated Philip van den Emster, a director at Varrlyn.
“Beyond that, it allows for the testing of many more scenarios, improving accuracy and the overall quality of the process. It also ensures consistency across different software development cycles.”
Varrlyn, an Amsterdam-based consulting firm, supports financial institutions in launching new digital financial products and upgrading core banking systems.
The firm said it has fully embraced test automation in its approach to ensuring smooth transitions and regulatory compliance.
For instance, in a complex data hub project for a major bank, test automation played a pivotal role.
Van den Emster described the challenge: “Our client was establishing a centralized hub as the ‘single source of truth’ for all portfolio data, which would save enormous amounts of time in the long run.”
However, before going live, over one billion rows of financial data needed to be tested.
“Obviously, manual testing was not feasible,” he pointed out. “We devised an automation test framework to handle core functionalities and the graphical user interface, ensuring seamless data visualisation.”
Van den Emster added: “This approach also maintained test scenarios within the regression testing suite, crucial when onboarding new datasets.”
Test automation is particularly valuable in managing the complex dependencies between systems in financial services, where institutions rely on multiple integrated applications such as trading platforms, payment gateways, and regulatory reporting systems.
“Financial applications from various vendors, both internal and external, must work together seamlessly,” Van den Emster noted.
“Trading platforms, market data feeds, and back-office systems all need to exchange data accurately and securely,” he added.
Adding to the complexity is regulatory compliance. “Data variability is high, and effectively managing this variability is essential in a constantly evolving regulatory landscape,” he shared.
Venter illustrated these principles through a case in which Varrlyn helped a financial services client introduce a new back-office platform while decommissioning the legacy system. The new platform came with enhanced functionality and required staff upskilling.
During the project, test automation played a key role in ensuring interdependencies were thoroughly tested.
Different sets of tests were implemented for system transitions, while all regulatory requirements were built into test cases and rigorously validated. “The key was ensuring interconnected tests across different pillars,” Venter stressed.
“Data variability is high, and effectively managing this variability is essential in a constantly evolving regulatory landscape.”
– Philip van den Emster
Through its extensive experience in guiding software testing, Varrlyn identified several best practices. One of the key lessons is that testing should not function in isolation but should be integrated into business and IT activities from the outset.
“You need to organize the test function early, ensuring that it remains involved throughout all cycles,” said Venter.
Van den Emster warned against relegating test automation solely to the IT or testing teams.
Instead, it should be “embedded in the business area using the platform,” as test automation is only effective when it accurately reflects real-world financial operations.
Venter also highlighted the importance of designing test cases strategically. “The goal is to build a minimal number of test cases that still provide maximum coverage. Keeping things simple and failing fast allows institutions to identify weaknesses quickly and pivot their testing strategy accordingly.”
Van den Emster recommends running automated tests “as frequently as possible,” as this helps catch issues early on. However, he notes that effectiveness relies on having a “concise test suite.”
Finally, both consultants agreed that generative AI is emerging as a transformative force across various business functions, including test automation in financial services.
Van den Emster believes AI will make automated testing smarter, more integrated, and more accessible. AI and machine learning are already playing a role in improving test creation and execution.
“AI technologies can identify patterns, predict potential failures, and generate more efficient test cases,” he explained.
“AI will also assist in maintaining and updating test scripts as applications evolve, minimising the need for manual intervention. Self-healing systems will even detect and adapt to changes in application interfaces automatically.”
By enhancing efficiency, coverage, and reliability, AI-driven test automation ensures that financial applications meet the high standards demanded in today’s fast-moving and complex financial landscape, he concluded.
THIS MONTH
NEW EVENT
Why not become a QA Financial subscriber?
It’s entirely FREE
* Receive our weekly newsletter every Wednesday * Get priority invitations to our Forum events *
REGULATION & COMPLIANCE
Looking for more news on regulations and compliance requirements driving developments in software quality engineering at financial firms? Visit our dedicated Regulation & Compliance page here.
READ MORE
- Inside banking’s shift to smarter QA to tackle complexity and risk
- SmartBear CPTO on AI in banking QA: ‘Impressive metrics but no critical scenarios’
- Banks push beyond traditional QA as resilience testing gains ground
- Banking QA professionals warn AI still doesn’t know ‘where the bodies are buried’
- RECAP: The QA Financial Healthcare & Insurance Forum Philadelphia 2026
WATCH NOW
