SunGard Survey Reveals Concerns over Testing of Financial Services Infrastructure
As the technology infrastructure relied upon by financial services firms to carry out their day-to-day operations becomes increasingly complex, a survey undertaken by SunGard Consulting Services has revealed concerns that the testing of these systems is insufficient to protect against failure.
The group polled 354 chief operating officers (COOs), chief information officers (CIOs), project managers, IT managers and quality/test managers in late 2012 and summer 2013. Survey participants were from insurance, retail banking, commercial banking and capital markets organisations in the US, the UK, Ireland and the Middle East. The organisations ranged in size from under US$20m to more than US$15bn in annual revenue.
The group commented that while testing is crucial to maintaining performance, satisfying customers and meeting compliance demands, the cost is a growing concern for financial institutions (FIs):
System testing often causes disruption to a firm’s day to day operations:
Today’s hypercompetitive industry and growing regulatory scrutiny are the main drivers for financial services firms to improve testing capabilities:
Of the regulations driving increased focus on system testing, Basel III is the most prominent:
Institutions are relying heavily on their own staff to perform testing:
“Impending regulatory deadlines, such as SEPA in the European Union [EU], present a number of challenges to firms to be in compliance,” said Michael O’Connor, project manager for information systems and development, ACCBank.
“Having a smoothly operating technology infrastructure is crucial to satisfy both regulators and clients.”
Stephen O’Reilly, quality assurance practice lead, SunGard Consulting Services, said,: “Testing has become a crucial part of any FI’s operations. Regulatory pressures and client demands are driving them to do more things faster and with fewer resources.
“At the same time, software failures can cost FIs dearly in terms of loss of business and reputation. How testing is conducted and by whom is therefore paramount in helping ensure that as much of the risk associated with potential failure is identified early in the testing process and then mitigated where possible. Outsourcing testing processes to a third party and engaging test professionals can help reduce cost and increase performance, helping ensure that operations run smoothly and smartly.”
The full survey report and a webinar discussing these topics in more detail can be accessed here.