How to Test Banking Domain Applications: A Complete BFSI Testing Guide

A Complete Guide to Testing Banking Application: BFSI (Banking, Financial Services, and Insurance) Testing Process and Tips

Banking applications are one of the most complex applications in today’s software development and testing industry.

What makes Banking applications so complex? What approach should be followed to test the complex workflows involved in banking applications?

In this article, we will be highlighting different stages and techniques involved in testing Banking applications.

How to Test Banking Applications

How To Test Banking Applications?

Various Functions performed by Banking Applications are:

Functions-of-Banks

Let's first understand the characteristics of a Banking Application:

  • Multi-tier functionality to support thousands of concurrent user sessions
  • Large-scale Integration: Typically, a banking application integrates with numerous other applications such as Bill Pay utility and Trading Accounts
  • Complex Business workflows
  • Real-Time and Batch processing
  • The high rate of Transactions per seconds
  • Secure Transactions
  • Robust Reporting section to keep track of day to day transactions
  • Strong Auditing to troubleshoot customer issues
  • Massive storage system
  • Disaster / Recovery Management.

The above listed ten points are the most important characteristics of a Banking application.

Banking applications have multiple tiers involved in performing an operation.

For Example, a Banking application may have:

  • Web Server to interact with end-users via Browser
  • Middle Tier to validate the input and output for the webserver
  • DataBase to store data and procedures
  • Transaction Processor which could be a large capacity Mainframe or any other Legacy system to carry out Trillions of transactions per second.

If we talk about testing banking applications, it requires an End to End Testing methodology involving multiple Software Testing techniques to ensure:

  • Total coverage of all banking workflows and Business Requirements
  • The functional aspect of the application
  • The security aspect of the application
  • Data Integrity
  • Concurrency
  • User Experience

What makes Banking applications so complex?

  • Banking software mainly deals with confidential financial data so the performance of software should be error-free and secure.
  • Developers prefer a complicated design to develop these applications to ensure the application runs in a desired secure manner.
  • Banking is a constantly changing world. Banking, today, is made available to the customer using different channels like brick & mortar branches, ATMs, online banking and customer care.
  • With the advent of technology, many wallets have flooded the markets which connect to the banking systems for financial transactions.
  • Banking is also expected to be up and running 24 X 7 with high performance. Software upgrades, instant fixes, etc. cannot be allowed to impact this availability.
  • The banking world is also highly impacted by the constant changes brought in by the government in the form of banking regulations. Any changes in the tax structure impact the banking system as well.
  • The banking system also needs to up-to-date as far as new technologies are concerned. Data analytics like Big Data Processing and getting instincts out of big data using Data Science is growing traction in the banking world.

Above mentioned points make the banking system complex for developers to create a software application around it.

Importance Of Testing Banking Application

  • Testing the Banking application assures that all the activities are not only executed well but also remain protected and secured.
  • Banking software is complicated with thousands of dependencies, the testing process requires more time, resources, and continuous monitoring.
  • As finances are involved here guidelines have to be followed strictly. Both testers and developers should have good domain knowledge.
  • Most importantly, it has to be ensured that the laws and regulations are enforced correctly in financial transactions. This can only be ensured with testing.
  • It’s also important to ensure that the application and the infrastructure on which the application has been deployed is able to handle the load, especially during peak business hours, without causing any disruption. This can be ensured by performing performance testing.
  • In today's digital world, the one thing that concerns everyone is that of security. The banking applications and the financial transactions that are performed within it needs to be secure from any attempt to break-in. This can be ensured by performing security testing. Security testing helps enforce industry standards to secure financial transactions.
  • It’s also important to ensure that different modules of a banking application and integrated properly and achieve the objective of the client. System Integration Testing helps achieve this task.

Banking App Testing Workflow

Typical stages involved in testing Banking Applications are shown in the below workflow. We will be discussing each stage individually.

This is a Waterfall model of testing an application.

Testing Banking Applications

#1) Requirement Gathering

Requirement Gathering phase involves the documentation of requirements either as Functional Specifications or as Use Cases. Requirements are gathered as per customer needs and documented by Banking Experts or Business Analyst.

Requirement Gathering

Experts are involved in writing requirements on more than one subject as banking itself has multiple sub-domains and one full-fledged banking application will be the integration of all these domains.

For Example, A banking application may have separate modules for Transfers, Credit Cards, Reports, Loan Accounts, Bill Payments, Trading Etc.

#2) Requirement Review

The deliverable of Requirement Gathering is reviewed by all the stakeholders such as QA Engineers, Development leads and Peer Business Analysts.

Requirement Review

They cross-check that neither existing business workflow nor new workflows are violated. All the requirements are verified and validated. Follow up actions and requirement document revisions are done based on the same.

#3) Business Scenario Preparations

In this stage, QA Engineers derive Business Scenarios from the requirement documents (Functions Specs or Use Cases); Business Scenarios are derived in such a way that all Business Requirements are covered. Business Scenarios are high-level scenarios without any detailed steps.

Further, these Business Scenarios are reviewed by Business Analysts to ensure all of the Business Requirements are met. It is easier for BAs to review high-level scenarios rather than reviewing low-level detailed Test Cases.

For example, a customer opening a Fixed deposit on the digital banking interface can be a business scenario. Similarly, we can have different business scenarios related to net banking account creation, online deposits, online transfers, etc.

#4) Functional Testing

In this stage, functional testing is performed and the usual software testing activities are performed such as:

Test Case Preparation: In this stage Test Cases are derived from Business Scenarios, one Business Scenario leads to several positive test cases and negative test cases. Generally, tools used during this stage are Microsoft Excel, Test Director or Quality Center.

Test Case Review: Reviews by peer QA Engineers

Test Case Execution: Test Case Execution could be either manual or automatic involving tools like QC, QTP, etc.

The functional testing of a banking application is quite different from ordinary software testing. Since these applications operate with customer’s money and sensitive financial data, they are required to be tested thoroughly. No important business scenario should be left to be covered.

Also, the QA resource who is testing the application should have the basic knowledge of the banking domain.

#5) Database Testing

Banking Application involves complex transaction which is performed both at UI level and Database level, Therefore, Database testing is as important as functional testing. The database is complicated & an entirely separate layer in the application and thus its testing is carried out by database specialists. It uses techniques like:

  • Data loading
  • Database Migration
  • Testing DB Schema and Datatypes
  • Rules Testing
  • Testing Stored Procedures and Functions
  • Testing Triggers
  • Data Integrity

The major purpose of database testing is to ensure that:

  • The Application is able to store and retrieve data from the database without any loss of data.
  • Completed transactions should be committed and aborted transactions are reverted back to avoid any mismatch in data stored.
  • Only authorized applications and users are allowed to access the database and the underlying tables.

There are primarily three ways of Database Testing:

  • Structural Testing
  • Functional Testing
  • Non-Functional Testing

Structural Testing

It involves testing the database objects like databases, schema, tables, views, triggers, access controls, etc. Ensuring that data types in tables are in sync with the corresponding variables in the application. Validating data and referential integrity in the tables.

For Example, An amount field in the application should have a data type of decimal/float in the table.

– In order to comply with standards, users should be given access controls through views.

Functional Testing

It involves testing the databases that satisfy user requirements. There are two ways to achieve: Black box testing and White box testing.

For Example, When we do an online money transfer, the sender account should be debited and the receiver account should be credited with the exact same amount. If the transaction fails then whole transactions should be reverted and the sender account should not be debited or credited back.

Non-Functional Testing

It involves load & stress testing and performance optimization. Load testing helps in identifying the most number of transactions that can be performed concurrently without impacting database performance.

For Example,  Based on the input from load and stress testing banking applications can decide to add more resources to their application during peak business hours and reduce the resources during off business hours. This helps the bank to make optimum use of resources and save money.

#6) Security Testing

Security Testing is usually the last stage in the testing cycle. A prerequisite to commencing security testing is the completion of functional and non-functional testing. Security testing is one of the major stages in the entire Application testing cycle as this stage ensures that application complies with Federal and Industry standards.

Due to the nature of the data they carry, banking apps are very sensitive and are a prime target for hackers & fraudulent activities. Security testing makes sure that the application does not have any such web vulnerability that can expose sensitive data to an intruder or an attacker. It also assures that the application complies with standards like OWASP.

In this stage, the major task is the whole application scan which is carried out using tools like IBM AppScan or HP WebInspect (these are the most popular tools).

Once the scan is completed, the Scan Report is published. Over this report, False Positives are filtered out and the rest of the vulnerabilities are reported to the Development team so that they start fixing the issues depending on the severity of each issue.

Penetration testing is also done at this step to reveal the propagation of errors. Rigorous security testing should be done across platforms, networks, and OS.

Some Other Manual tools for Security Testing used are Paros Proxy, Http Watch, Burp Suite, and Fortify.

The main purpose of security testing is to pinpoint any vulnerabilities the software application, may have.

The security testing tests the application against:

  • Any external attack or attempt to hack the application with malicious intent.
  • Any loophole in the software application could be exploited causing data or monetary loss.
  • Any vulnerability in the network, servers, and workstations that hosts the application.

Following are the various types of security testing:

Vulnerability Testing: An automated program is developed and executed to check for various vulnerabilities.

Security Scanning: This variant revolves around investigating network and system vulnerabilities, provide solutions to reduce the associated risk.

Penetration Testing: This variant of security testing imitates a hacking attempt to capture vulnerabilities and loopholes, which otherwise could have gained access to the database or the application data.

Security Auditing: It involves auditing of the application and the associated networks for any security lapses.

Risk Assessment: This variant does an analysis to assess the level of risk, in an event when a vulnerability or loophole is exploited for malicious intent. Such risk could be categorized in to low, medium and high. Based on the level of risk, proper measures are advised by the testing team to reduce or avert the risk.

Ethical Hacking: This is performed by an organization on its systems to identify loopholes that could be exploited in its application or network. The intent of this kind of hacking is not to steal or cause damage to the application or network.

Posture Assessment: This is an umbrella assessment comprises of security scanning, risk assessments, and ethical hacking.

SQL Injection: SQL Injection could be used to gain access to the server database. The testing is done to ensure that the code is working correctly, which execute queries on the database based on following inputs from user:

  • Brackets
  • Apostrophes
  • Commas
  • Quotation Marks

Other Stages In Testing BFSI App

Apart from the above main stages, there might be different stages involved such as Integration Testing, Usability testing, User acceptance testing, and Performance Testing.

Let us talk in brief about these stages as well:

Integration testing

As you know that in a banking application, there might be several different modules like transfers, bill payments, deposits, etc. And thus, there are a lot of components developed. In integration testing, all the components and integrated together and validated.

Usability Testing

Usability Testing

A banking application serves a wide variety of customers. Some of these customers might lack the skills and awareness required to perform the banking tasks over the app.

Thus, the banking application should be tested for simple and efficient design to make it usable across different groups of customers. The simpler & easy to use interface is, the higher number of customers will be benefited from the banking application.

It’s about examining the level of ease, business users or bank customers have in using the application. This testing is not performed by the developer or tester but is performed by the business users.

For Example,  Nowadays everyone uses mobile apps. The banking app should be user-friendly and easy to understand and use by the end-user.

Types Of Usability Testing

Comparative Usability Testing: This is comparison-based testing, where ease of usability of one website or application with another. The target for such testing is to provide the best user experience.

Explorative Usability Testing: The aim of this testing is to identify what features should the new application or software should possess in order to meet the bank’s customer requirements.

Following are advantages and disadvantages of Usability Testing

Advantages:

  • The end-users of the application are usually involved with the testing, hence first-hand feedback is obtained.
  • Rather than spending time on analysis and discussion about a feature that a product should have or not, it is better to get the inputs from the end-user directly.
  • We can catch any potential issues beforehand.

Disadvantages:

  • As multiple end-users are involved in testing, their opinions if not precise can affect the requirement.
  • The feed from end-users may get influenced.

Performance Testing

Certain periods of time like payday, end of the financial year, festive seasons might bring in change or spike in the usual traffic on the app. Hence, thorough performance testing should be done so that customers don’t get affected by performance failures.

A significant example from the past where bank customers got personally affected due to performance failures is NatWest and RBS cyber Monday IT outage in which the customers had their debit and credit card got declined transactions across shops in the country.

User Acceptance Testing

This is done by involving the end-users to ensure that the application complies with the real-world scenarios and will be accepted by users if it goes live.

In today’s scenario majority of Banking Projects are using: Agile/Scrum, RUP, and Continuous Integration methodologies, and Tools packages like Microsoft’s VSTS and Rational Tools.

As we mentioned about RUP above, RUP stands for Rational Unified Process, which is an iterative software development methodology introduced by IBM which comprises of four phases in which development and testing activities are carried out.

Four phases are
i) Inception
ii) Collaboration
iii) Construction and
iv) Transition

RUP widely involves IBM Rational tools.

Sample Test Cases For Banking Application

Test cases for New Branch

  • Create a new branch with valid and invalid test data.
  • Create a new branch without data.
  • Create a new branch with existing branch data.
  • Verify the reset and cancel options.
  • Update branch details with valid and invalid test data.
  • Update branch details with existing branch test data.
  • Verify if the new branch can be saved.
  • Verify the cancel option is working.
  • Verify the branch deletion with and without dependencies.
  • Verify if the branch search option is working.

Test Cases for New Role

  • Create a new role with valid and invalid test data.
  • Create a new role without data.
  • Verify a new role can be created with existing test data.
  • Verify the role description and role types.
  • Verify the cancel and reset option is working.
  • Verify the role deletion process with and without dependency.
  • Verify the links in the role details page.
  • Verify the admin login without test data.
  • Verify all home links for the admin role.
  • Verify the admin can change the password with valid and invalid test data.
  • Verify the admin log out successfully.

Test cases for Customer and Banker

  • Verify if all visitor and customer links are working properly.
  • Verify the customer login with valid and invalid test data.
  • Verify the customer login without any data.
  • Verify the banker login without any data.
  • Verify the banker login with valid or invalid test data.
  • Verify the customer or banker can log out successfully.

Test cases for New users

  • Verify if the new user can be created with valid and invalid test data.
  • Create a new user with existing branch test data
  • Verify if the cancel and reset option is working properly.
  • Update user details with valid and invalid test data.
  • Verify the deletion of the new user.
  • check if the new user can be verified.
  • Verify mandatory input parameters.
  • Verify optional input parameters.
  • Verify if a user can be created without optional parameters.

Test cases for the creation of a New Account

  • Create a new account with valid and invalid user data.
  • Verify if user details can be updated.
  • Verify if a new user can be saved.
  • Create a new account with the existing user's data.
  • Verify the user can deposit the amount in the newly created account (and update the balance).
  • Verify the user can withdraw an amount from the new account (after deposit and update the balance).
  • In the case of salary, account verify the company name and other details are provided by the user.
  • Verify if the primary account number is provided in case of a secondary account.
  • Verify user details provided in cases of the current account.
  • Verify the provided proofs for joint account in case of a joint account.
  • Verify whether able to maintain zero balance in salary account.
  • Verify whether able to maintain zero balance or minimum balance for the non-salary account.
  • Verify the new user can log out successfully.

Test Cases For Net Banking Application

  • Check if the user is able to open the bank site.
  • Check if all the links on the site are working.
  • Verify if the user is able to create a new account.
  • Check if the user is able to login with valid and invalid username and password.
  • Verify if either of the username or password is blank while login, the user should not be allowed to login and an alert message is shown.
  • Check if the user is allowed to change the password.
  • If an invalid user or password is entered proper error message is shown.
  • Users with an invalid password should not be allowed to log in.
  • Verify that after repeated attempts to log in with an incorrect password, the user should be shown an error message and blocked.
  • Check if the user is able to perform some basic transactions.
  • Verify that the user is able to add a beneficiary with valid and invalid details.
  • Verify if the user can delete the beneficiary.
  • Verify that the user is able to make transactions to the newly added beneficiary.
  • After transaction verify if the accounts of both user and beneficiary are updated.
  • Check if the user is able to enter the amount in decimal number.
  • Verify if the user is not able to enter negative numbers in the amount field.
  • Verify if the user is allowed to do transactions with or without minimum balance.
  • Verify if the user can do a new RD.
  • Verify that proper message is shown in case of transaction done with insufficient balance.
  • Check if the user is asked for confirmation before any transaction is done.
  • Verify if acknowledgment receipt is provided on each successful transaction.
  • Verify if the user is able to transfer money to multiple accounts.
  • verify if the user can cancel the transaction.
  • Verify that account details reflect financial transactions done also.
  • Verify that the time-out feature is implemented.
  • verify that in case of session time out a user should log in again.
  • verify that proper session time out is done in case any inactivity.
  • verify that while doing transaction user is taken to secure mode.
  • Verify if the user can log out successfully.
  • Verify search and reset options.

Conclusion

In this article, we discussed how complex a Banking application could be and what are the typical phases involved in testing the application. Apart from that we also discussed current trends followed by IT industries including software development methodologies and tools.

Feel free to share your experience or queries on this topic!

Recommended Reading

129 thoughts on “How to Test Banking Domain Applications: A Complete BFSI Testing Guide”

  1. Hi ,
    Currently am residing in US.I don’t have any experience in IT field.I went through some desi consultancy and they put fake experience in my resume and marketed my resume that i had 6 yrs experience working in financial domain.I have undergone a 3 months software testing course in US.But i don’t have real time experience.Is it hard for me to work in financial domain without prior experience?pls help me friends…

  2. @gayathri,
    Hi!!
    You will face the following issues.
    1) You will be considered as a 6 year experienced and the level of questions asked in the interview will be too high..Three month of course will give you just an overview of basic testing concepts..The actual testing process is way too different.
    2) In case you crack the interview and get a job you will not be given any kind of training.The expectations will be too high…and it will be difficult to meet those expectations.
    What i suggest is don’t show 6 years of experience. Make it to max 2 or 1.8.It will be pretty easy for you to face the interview…You might get less package in the beginning but surely this will give you an opportunity to gain knowledge..

    Thanks!!!

  3. hi team,

    if assume banking application we are transfers the amount
    the process is
    1.login with user details
    2. funds transfer next
    3.already added account select
    4. amount
    5.text box
    6.check the accept the terms and condition
    7.enter the password
    8.submit
    this is the flow of application in this case what is the end to end testing and also backend what will happen pls tell me

  4. please anyone share banking domain related docs. which will be useful to manually test banking applications. i.e. how to test funder trfr module end to end

  5. Hi ,

    Need to know how Banking and financial services applications captures Country Code data and currency code data via API integration

  6. SI No Internet Banking
    1 Verify the bank website URL.
    2 Verify if the bank website URL has HTTPS on the address bar and in the URL.
    3 Verify if the bank website login page does not appear forged.
    4 Verify if the bank login page has username and password.
    5 Verify the username and password are being accepted or not.
    6 Verify that user with invalid password is not allowed to login.
    7 Verify that if either of the username or password is blank, user is not allowed to login. User should be given an alert also.
    8 Verify that after repeated attempts to login with incorrect password( as per the limits), user should be blocked.
    9 Verify if the SMS authentication is triggered after login.
    10 Verify that user is allowed to change password
    11 Verify if the user is redirected to the dashboard after passing all authentication processes.
    12 Verify if the user has access to the online money transfer feature.
    13 Check if the user can transfer funds option is available during specific time period (9 am to 5pm).
    14 Check if the fund transfer option shows notice for off-business hours transaction.
    15 Verify if the user can add the beneficiary.
    16 Verify if the beneficiary details can be verified.
    17 Verify that user is able to add decimal number into amount ( limited by 2 numbers)
    18 Verify that user is not able to add negative number into amount field.
    19 Verify that user is allowed to transfer money only if there is proper account balance.
    20 Verify that there is a confirmation check for financial transactions
    21 Verify that user is given an acknowledgment receipt upon successful financial transaction.
    22 Verify that customer is able to send money to multiple people
    23 Verify if the fund transfer option allows NEFT or RTGS option for nationalized money transfers.
    24 Verify if the fund transfer page asks for beneficiary name, IFSC code, bank name and fund amount and purpose of transfer.
    25 Verify if the fund transfer page asks for PAN number if the amount of funds gets over 50k.
    26 Check if the fund transfer page has an 2-step authentication before you finalize transfer.
    27 Check if the inter bank fund transfer happens instantly or not.
    28 Check if the amount of time it takes for the funds transferred between the in-business hours.
    29 Check if the amount of time it takes for the funds transferred between the off-business hours.
    30 Check if the amount transferred notification is sent to sender and receiver.
    31 Check if the amount gets transferred to the exact person mentioned in the beneficiary.
    32 Verify that time-out feature is implemented

  7. Hi,
    I have worked in Insurance Domain throughout where I have dealt with modules viz New Business, Underwriting, Admin, Commissions, etc. and this is standard in all the admin systems (read applications).
    I would like to know if there is any such standard or best practice that Banking Domain follows.

    Thanks!

  8. Can anyone pease tell me how can i explain auto insurance project in the interview. I showed on my resume that i worked on geico Auto insurance in the usa But i Need some Help How can i explain the geico INSURANCE project. How Can i explain what modules i tested . Please if anyone can help to answer it.

  9. Can anyone please tell me how can i explain State Street project in the interview. I showed on my resume that i worked on State Street Bank in the usa But i Need some Help How can i explain the project. How Can i explain what modules i tested . Please if anyone can help to answer it.

  10. Banks and FinTech firms today have geared up to implement effective digital strategies to enhance the overall banking experience. However, the financial services industry juggles multiple priorities within its technology function. What they need is Automation and:

    1. Speed of change
    2. Complexity of environment
    3. Frequency of change/ deployment
    4. Digital transformation

    In 2019 Why QA Automation Matters: With most financial organizations moving towards continuous delivery and agile based development models, the frequency of testing increases.

Leave a Comment