FinTech Revolution and the Growing Need for Performance Testing

During his tenure as Chief Economist at the International Monetary Fund, Raghuram Rajan (now the Governor of the Reserve Bank of India) delivered a controversial paper that addressed certain issues in the financial sector and introduced the term ‘tail risks’ and its impact on the banking sector. These and many more reasons were addressed, which could lead to global financial crisis.

This was followed by the global financial crisis of 2007-09, considered as the worst after the Great Depression of the 1930s. While we could focus on few factors, it was practically an outcome of combination of various factors that resulted in the crisis. Post the entire turmoil, there was a conscious awakening in the financial services segment and many necessary amendments and reforms were made.

Financial Technology, popularly referred to as Fintech, are organizations / start-ups that leverage various technology platforms to efficiently offer financial services. Essentially, Fintech is considered as the ‘fourth industrial revolution’, which has impressively created waves even at a nascent stage.

Fintech firms are here to revolutionize and offer a secure interface for taxpayers and the customers in the vast economic diaspora. It is a joint venture of software geeks and Venture Capitalists, who plan to create a phenomenal shift in the way economies perceive the financial services market.

This phenomenon is definitely creating a buzz with the kind of investments it has attracted. It is estimated that these start-ups have attracted $12 billion of investment in 2014, which is $4 billion more than in 2013. Goldman Sachs estimates that the total worth of the Fintech market is worth $4.7 trillion. Fintech firms cover an entire gamut of services in the financial services domain, namely, online utility payments, wealth management, and Crowdfunding.

Fintech start-ups have successfully got their hands on the pulse of the consumers today, where there is a soaring demand for credible and secure interface for accessing digital services.

This growth and upsurge has been triggered by various surveys and studies done by market research and analyst firms. An analyst report projects that the global Fintech investment market is estimated to grow at a CAGR of 54.83% during the period 2016-2020. By drawing this kind of attention, the Fintech revolution has attracted eyeballs and massive expectations.

As we understand, the Fintech industry segment is evolving rapidly and the growth index has been set. Now, the way forward is to focus on the most crucial factor – Customer Satisfaction. Today, Fintech firms are in the process of conceptualizing and offering business critical financial applications for the banking sector, financial institutions, and even directly for the customers.

But as they say, with great opportunities, there come greater Challenges!

Operating in the financial services domain poses a lot of challenges, as it entails tremendous risks. Irrespective of the domain of business, Fintech firms deal with sensitive data and customer base to process and serve. Secure interface and robust performance defines the success factors for this domain. Additionally, the industry has to adhere to various compliance guidelines and regulations governing the financial services sector.

Consequently, testing the performance of these business critical applications is imperative for evaluating their speed and effectiveness in the marketplace. Specifically, in a socio-economic environment which is highly volatile and prone to risks.

For instance, while dealing with banks and financial institutions, Fintech firms have to conform to various compliance issues of the banks. This specifically pertains to hosting on the Cloud.

In such an ecosystem, it is essential to collaborate with a strong and experienced partner for a comprehensive testing framework and strategy.

Let’s encapsulate the compelling reasons for Performance testing and its importance.

• Dealing with sensitive financial data
• Managing complex customer database
• Mitigating risks across a digital platform
• Implementing Compliance / Regulatory issues in the financial domain
• Managing performance of critical applications across devices and environments

Apart from the various reasons for Performance testing, we will also shed some light on the best practices in testing. These practices can help ensure seamless performance of business critical applications that are being brought to the market today by Fintech firms.

Shift-left for effective Performance Testing

Performance of a software or application comes down to the phrase ‘now or never’. Your application may fulfil the functional aspects, however, it is important to gauge whether it is been done in a particular time frame and under a particular environment. This is where the challenge arrives.

Performance Testing or Load testing (for critical applications) is crucial in the financial services domain. Experts with a contemporary and fresh perspective recommend that Performance testing should start early in the Software Development Lifecycle (SDLC). The boons of this approach are validated and endorsed by experts.

The Shift-left approach brings down the changes of major architectural changes and reformation at the final stage. It takes into consideration every functional and performance related aspects along with the development of the application / software. Ultimately, this results in timely solutions that ensure cost-effectiveness. Rationalizing the costs is, and has been, one of the concerns of every start-up organization today.

Shifting Performance Testing way early in the testing lifecycle ensures cost-effectiveness without compromising the quality.

Service Virtualization for effective Performance Testing

There are many tools available to simulate the environment to Load / Stress test the application and gauge its performance. Performance testing helps stress the application under normal as well as excessive loads, which helps in estimating the possible impact on the application and its performance.

Service Virtualization emulates various heterogeneous components in a particular environment for the Application Under Test (AUT). This further aids the Performance testing efforts, as it helps to test the application against an array of functional and performance conditions, which is scalable on-demand.

Collaborating with an experienced testing partner also gives you access to an emulated test environment, where small and large organizations can test their applications with a minimum set-up.

Testing Performance on the Cloud

Fintech ventures have to adhere to guidelines and regulations defined by the financial world. The major challenge occurs when business applications and sensitive data is loaded on the Cloud. Testing in a Cloud environment comes with its own set of challenges that require expertise on the part of the testing partner.

Performance testing on the Cloud computing environment comprises of testing the network, the server, the database, and the application. The testers are required to check the interaction amongst various components in the ecosystem. At the same time, it is important for the tester to anticipate risks and gauge the application’s performance in an unknown and alien territory.

Nevertheless, Performance testing on the Cloud also comes with its intrinsic benefits, typically, lower capital and operational costs, accessibility for distributed development teams, and effective scalability.

Thus, ultimately, what is a Fintech’s core secret to success? If defined, the underlying purpose is to offer innovative services with high security and by aligning with stringent compliance standards. Cigniti’s dedicated Performance Testing CoE focuses on providing solutions around performance testing & engineering for our global clients. Collaborate with our experts to devise a comprehensive testing strategy.

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