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BFSI Testing: A Comprehensive Guide

BFSI Testing: A Complete Guide

Banking, financial service, and insurance (BFSI) applications are complex due to their heavily regulated nature. Beyond the commonly known test cases, QA teams must also consider industry-specific test scenarios to do BFSI testing well. This means that testers must equip themselves with two skill sets: testing knowledge and BFSI domain knowledge. Furthermore, concerns regarding data security, privacy, and the rapid pace of digital transformation demand testers to constantly keep up with new technologies.

 

This article explores the practices of BFSI testing in-depth, covering several basic concepts in BFSI as a starting point that you can further explore, walking you through the BFSI testing process, and finally suggesting several good testing tools.

What is BFSI Testing?

BFSI testing is software testing activities conducted specifically for applications and systems in the banking, financial services, and insurance sector. Its goal is to detect software bugs, improve product quality, and eventually boost customer satisfaction.

The Complexity of BFSI Applications

  • BFSI belongs to the YMYL (Your Money Your Life) niche. These are fields where the information or services provided directly impact people's financial or personal well-being, such as finance, healthcare, law, property investment, education, etc. Creating and maintaining applications in the YMYL space comes with added responsibility. 
  • BFSI applications must support a wide range of financial products and services, each with a unique set of requirements and workflows. The individual components also interact with each other, forming a complex web of dependencies.
  • The BFSI industry is heavily regulated by data security, privacy, anti-money laundering (AML), Know Your Customer (KYC) procedures, and financial reporting. These laws vary from region to region in their scope.
  • The data in these applications is sensitive and confidential. Cyber threats, fraud, and risk of unauthorized access is always present, so there must always be a robust testing process for these areas. Proper data warehousing and management of customer profiles or financial history is another critical area to pay attention to.
  • These applications often need to integrate with external systems (payment gateways, credit bureaus, or government databases). Seamless integration among them is crucial, calling for BFSI integration testing.
  • BFSI apps are also expected to be available 24/7, uninterrupted. They must process a massive number of transactions, so robust performance testing is truly necessary.
  • Although the BFSI field generally prefers safety, traditionality, and practicality, it has recently embraced more cutting-edge features like blockchain, AI, or biometric authentication, adding further complexity to these apps. 

Basic Concepts in the BFSI Domain

Before testing these applications, testers must equip themselves with adequate knowledge and domain expertise. 

Domain

Concepts/Areas to Learn

Banking

1. Types of bank accounts

  • Savings account
  • Current account
  • Fixed deposits
  • Transaction limits of each type
  • Interest rates

2. Payment systems

  • NEFT
  • RTGS
  • IMPS
  • UPI

3. Loan products

  • Personal loans
  • Home loans
  • Business loans
  • Eligibility criteria

4. Interest and calculations

5. Banking regulations

  • KYC
  • AML
  • GLBA
  • JOBS Act
  • FCRA
  • TILA
  • Basel norms

6. Mobile and internet banking

7. ATM and card transactions

8. Banking core systems

Financial services

1. Investment products

  • Stocks
  • Bonds
  • Mutual funds
  • Retirement plans
  • Risk and returns

2. Wealth management

  • Wealth management services
  • Financial planning
  • Risk tolerance

3. Financial advisory services

4. Tax planning

5. Asset management

6. Trading platforms

7. Financial regulations and compliance

Insurance

1. Insurance policy types

2. Underwriting process

3. Claim processing

4. Actuarial science

5. Reinsurance

Learning Resources for BFSI Domain Testing

Here are several good websites with valuable reading materials in these fields:

  • Investopedia: the world’s leading source of financial content on the web, ranging from market news to retirement strategies, investing education to insights from advisors.
  • The Financial Times: more of a news site, the FT provides updated information on businesses and financial institutions around the world.
  • The Motley Fool: a financial website providing investing insights and financial advice to millions of people. 

To gain more knowledge on testing, you can always go to the Katalon Blog to read up on our latest articles or join our Katalon Academy where we provide free courses on software testing and automation testing.

Structures of BFSI Applications

A banking application is founded upon a core banking system that manages customer accounts, transactions, and financial data. On the frontend, there is usually an online banking portal where users can access their account and view important information. 


Financial service applications are quite diverse in terms of their structure, catering to specific aspects of personal finance and investment. Insurance is a type of financial services, and these applications usually include a policy management system, claims processing system, underwriting, insurance quoting, and agency management system.


Regardless of their category, these are several must-haves in a BFSI application to ensure high security:

  • Authentication and authorization flows (2FA is usually required)
  • Account management
  • Real-time alerts through a variety of channels
  • Mobile-friendly features
  • Privacy settings
  • Push notifications through a variety of channels
  • Customer support
  • Compliance and regulatory information

Process of BFSI Testing

BFSI testing also follows the Software Testing Life Cycle (STLC), a standard process to ensure all software testing objectives are met, including: 

  1. Requirement analysis
  2. Test planning
  3. Test case development
  4. Environment setup
  5. Test execution
  6. Test cycle closure

1. Requirement Analysis

In these discussions, it is important to involve both developers and testers, as they can bring valuable insights from both perspectives. BFSI subject matter experts should also join to help the technical team develop the necessary workflows in the application. Due to the inherent difference in the way business people and technical people communicate, you need to establish a shared language to reconcile the differences. This is where BDD Testing comes into play. Leveraged correctly, BDD testing will promote collaboration and understanding across stakeholders, facilitating a smooth requirement analysis stage.

 

2. Test Planning

 

A test plan is an official document that gives a detailed and organized description of the testing activities and strategies used to evaluate the quality of the BFSI system being tested. This document provides specific information about the approach, method, scope, goals, resources, timelines, and risks related to the project.

  • Test objectives: Define attributes like functionality, usability, security, performance, and compatibility.
  • Output and deliverables: Document the test scenarios, test cases, and test data to be produced and monitored.
  • Test scope: Determine which areas and functionalities of the application will be tested (in-scope) and which ones won't be (out-of-scope).
  • Resources: Estimate the costs for test engineers, manual/automated testing tools, environments, and test data. Read MoreTop 15 Best Automation Testing Tools
  • Timeline: Establish expected milestones for test-specific activities along with development and deployment.
  • Test approach: Assess the testing techniques (white box/black box testing), test levels (unitintegration, and end-to-end testing), and test types (regressionvisual testing) to be used.

3. Test Case Development

Depending on whether you want to execute the tests manually or automatically, there are different approaches to test case development.

  • For manual testing, testers execute the test case manually, and therefore a test case to them are specific test steps, expected results, detailed system conditions, written in plain language. All of this information should be carefully documented in a test management system. Testers also need to prepare test data simulating the various scenarios that can happen in the system.
  • For automation testing, testers execute the test cases automatically, either as a test script or with a testing tool. Test scripts are written using a test automation framework then executed on the desired environment (browsers, OS, devices, etc.) Test automation tools can simplify that process by low-code features such as Built-in Keywords (code snippets that can be grouped to construct a test case) or Record-and-Playback (record activities on a screen and turn that sequence into a script). See how to simplify test authoring with a test automation tool.

For better management, you should assign fields or tags to test cases for easier management. In Katalon TestOps, simply navigate to Test Management > Test Cases, then choose to edit the test case you want. Click Add New to add Custom Fields to your test cases. 

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For example, here we have categorized the test case as High by Priority. You can create new custom fields with any criteria you want in the Configuration > Custom Fields section. There are many other types of testing for you to choose from, including:

  • Scope
  • Test type
  • Severity
  • Environment
  • Status 
  • Owner
  • Regression status
  • Test cycle

On a similar note, a recommended practice is to group similar test cases together into test suites for better management later down the road. See how you can improve test planning with Katalon.

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4. Environment Setup

This step can be done at the same time as test case development. The test environment consists of the software and hardware configurations used to test the application. QA teams will plan how to use resources for developing the test environment. This ensures that resources are allocated efficiently. Here is a checklist of things to consider when setting up the test environment:

  • Determine the necessary hardware specifications (processor, RAM, storage, and network capabilities) to support the software application or testing environment.
  • Identify all the required software components, libraries, frameworks, and tools needed
  • Select the appropriate operating system.
  • Implement a version control system, like Git, to manage code repositories and track changes.
  • Set up essential security measures. Isolate the dependencies if needed so that the external factors will not tamper with the test results.
  • Establish a reliable data backup and recovery plan to prevent data loss in case of system failures.
  • Configure network settings.
  • Set up continuous integration and continuous deployment (CI/CD) pipelines. You can leverage leading CI/CD tools to enhance this activity.

5. Test Execution

Test cases can be executed either manually or automatically. Generally, manual testing is more suitable for exploratory testing or usability testing, while automation testing is better suited for regression testing, data-driven testing, or any test cases that are repetitive. 


For example, if you want to verify if all navigation elements (buttons, links, menus) function correctly, or if the font size and style have any effect on readability or not, it is better to go with manual testing. However, if you want to test if the login features and 2FA still work as expected after each code change, it is better to go with automation testing, since the process of testing such features are almost un-changing, so manually testing them would be counterproductive.


Read More: Manual Testing vs. Automation Testing


Executing tests across browsers and environments is a highly recommended practice, since the user base of BFSI applications is usually diverse. Each user may use a different combination of browser – device – operating system, and not testing on those environments means missing out on potential bugs. 


In Katalon Studio, simply open your test case, click the dropdown of the Run button, and you’ll be presented with a wide variety of environments to execute your test case. Choose your desired environment, then click Run, and your test should be executed immediately.

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If you choose the TestCloud option, you’ll be able to execute tests across versions of multiple OS and browsers on the cloud. 

 

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Start Testing Finance Softwares With Katalon

 

 

6. Test Cycle Closure

This is the last stage of BFSI testing. Testers will come together to analyze their findings from the tests, assess how well they worked, and document important lessons for future use. It is important to consistently evaluate your QA team's software testing process to have full control over all testing activities throughout the entire STLC.

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Types of Testing to Consider

When planning for a BFSI test project, certain types of testing should be placed in higher priority, including:

  • Integration testing: components are combined and tested together as a group to identify issues that may arise when they interact with each other. These components should have passed unit testing. In BFSI testing, there are so many systems working with each other, both external and internal, and integration testing ensures that the communication between is smooth.
  • Functional testing: in this stage testers focus solely on whether the application works as expected. When testing finance-related applications, this means verifying the fundamental features (login, authentication, account, history, etc.) as well as the industry-specific features.
  • Security testing: ensures that the application can withstand potential attacks and protect sensitive data.
  • Regression testing: conducted after a code update to ensure that the update introduced no new bugs.
  • Accessibility testing: the process of evaluating that a software application, website, or digital content is usable to people with special needs or unique challenges due to physical, sensory, cognitive, or developmental impairments. 
  • Visual testing: verifying the visual aspects of an application's user interface (UI).

Sample Test Cases for BFSI Applications

  • Login functionality test cases:
    • Verify that the "Remember Me" option retains the user's login credentials for the next session.
    • Test the "Forgot Password" functionality, ensuring that users can reset their passwords securely.
    • Validate that the application logs out automatically after a specified period of inactivity.
    • Check for session management, ensuring that logging out clears the user's session and prevents unauthorized access.
  • Account balance test cases:
    • Test for real-time updates of the account balance after each transaction.
    • Verify that account balance is displayed accurately in multiple currencies, if applicable.
    • Check if the account balance is updated correctly after interest accruals or deductions.
    • Validate that account balance is hidden or masked when displayed in sensitive areas (e.g., public kiosks).
  • Fund transfer test cases:
    • Test fund transfer to an account with incorrect or invalid account details, ensuring it fails with appropriate error messages.
    • Verify that fund transfer to the same account from which the transfer originates is restricted.
    • Validate that users receive transaction notifications via email or SMS after successful fund transfers.
    • Test for any transaction charges or fees associated with fund transfers and verify their accuracy.
  • Bill payment test cases:
    • Test bill payment with invalid or incomplete biller details to ensure it fails with proper error handling.
    • Validate the application's behavior when attempting to pay a bill with an insufficient account balance.
    • Check if the bill payment history accurately reflects the status of each payment (e.g., pending, successful, failed).
    • Test recurring bill payments to verify that they are processed automatically on the specified dates.
  • Transaction history test cases:
    • Verify that the transaction history includes all types of transactions (e.g., deposits, withdrawals, transfers, fees).
    • Check for the accurate display of transaction timestamps, ensuring they are in the correct time zone.
    • Validate that transactions are sorted in chronological order, with the latest transactions appearing first.
    • Test the search functionality to ensure users can filter transaction history based on specific criteria (e.g., date range, transaction type).
  • Interest calculation test cases:
    • Test interest calculation for different account types (e.g., savings, fixed deposits) with varying interest rates.
    • Verify that interest is accrued and compounded accurately at the defined intervals (e.g., monthly, quarterly).
    • Check for special scenarios, such as leap years or leap days, and ensure interest calculations remain accurate.
    • Validate that interest calculations are rounded off correctly to the appropriate decimal places.
  • Credit card statement test cases:
    • Test the credit card statement generation at different intervals (e.g., monthly, bi-monthly) to ensure consistency.
    • Verify that all credit card transactions, including purchases, payments, and interest charges, are listed accurately.
    • Validate that credit card statement calculations adhere to the defined billing cycle and grace period.
    • Test for the accurate display of total outstanding balance and minimum payment due on the credit card statement.