Agile — a testing framework introduced in 2001 — is now being used across various banks in order to cater to their IT project needs. The basic principles of the agile methodology are as follows:

• Rapid and effective response to change
• Customer collaboration on a frequent and regular basis
• Fewer processes and tools, but more interactions
• Less documentation and enhanced use of working software

Most banking software applications require testing for the following critical objectives:

(I)                 Ensuring that the banking software complies with the guidelines and regulations set by the regulatory authorities of its operating region

(II)               Making sure that systems are user-friendly and cater to the new needs of today’s banking customers.

(III)             Changing existing product offerings and introducing new products in market across self-assisted channels like Internet banking/Mobile banking.

In regulatory compliance, the testing phase is considered to be one of the most important stages in the software’s development. Banks’ IT teams need to make sure that all changes made to the systems not only comply with regulatory guidelines, but are also implemented within the time frame provided by the bank, in accordance with the regulatory deadlines.

Traditionally, banks have always implemented changes using the ‘waterfall’ model, which certainly caters to the bank’s needs, but can sometimes be ineffective to in-cooperate the change in requirements during the project execution phase and forecasting timelines.

The solution lies in adopting the agile model for implementing changes — especially in regulatory compliance projects. Testing in an agile framework caters to all the critical needs of a regulatory-compliance project:

1. Effective handling of change in requirements:

Regulatory-compliance projects require banks to align their internal systems as per the guidelines issued by the regulatory authorities. These requirements are collated by the business team at the very start of the project, so that the testing team can work accordingly right from the start. Such projects are generally long-term and there are always chances of a sudden change in requirements if regulatory authorities make changes to the guidelines.

Under such circumstances, it becomes very difficult for the testing team to understand the new requirements (in context of the existing requirements) and correspondingly make changes to the test scenarios.

The agile framework addresses this problem by ensuring that test scenarios are regularly discussed with the business and development teams. Any change in requirements can immediately be brought into the project and the testing team can either plan a new sprint for the same, or even try to accommodate it in the current sprint.  This ensure that the scenarios and test conditions are aligned to changed requirements and project/product goes live with all requirements including changed requirements that came up during project execution .

1. Effective handling of timelines

When such projects are implemented in a waterfall model, the business team needs to baseline all the requirements; the development team has to work on making changes; and in the end, the testing team needs to test all the changes — all in a very short go-live time. Generally, testing teams are left with very little time and face the pressure of signing off on the project. There are always chances of spotting defects in the end due to the last-minute updates. Agile Methodology helps testing team to forecast the timelines in such cases as well.  Agile testing team can foresee the timelines by looking at the product backlog. Further, daily standup and retrospective meetings can help testing team to adhere to timelines.

There are similar issues in change requirements for improving the user interface for clients, or in developing new product offerings across multiple, self-assisted channels like internet banking, mobile banking, ATMs, and POS.

The projects are generally tracked with very tight timelines so as to achieve a competitive advantage over other market players. In this context, the waterfall model is always constrained by the lengthy process of first gathering all the requirements, then making changes in the product, and finally taking it to market. Often, it so happens that by the time such a product goes live, other market players have already enabled their products with the same capabilities.

The timely implementation of such projects can be ensured through the agile methodology. Project teams can get the backlog and plan for incremental changes in the product, after which, the critical and maximum revenue-generating modules can be implemented right at the beginning of the sprint. This allows the bank to implement product changes in even shorter time frames, by adhering to smaller sprints to successfully implement the changes and make the product ready for market.

In a nutshell, project implementations in an agile framework can ensure that banks implement regulatory projects and develop innovative product offerings in an effective and timely manner.

IT service providers should consider agile as one of the preferred testing methodology while offering testing services to banking clients and enable its employees in Adopting agile methodology.