Faulty technology is hamstringing the Fintech industry costing investors millions: why the industry needs to invest in their online platforms

By Antony Edwards, COO, Eggplant

The finance industry is one rife with technology fuelled innovation and as such, the Fintech business is booming. Over the last 5 years startups with consumer convenience in mind have sprung up to challenge traditional high street bank offerings. Now, banks themselves have become digital products, with challenger banks such as Monzo and Revolut operating without any brick-and-mortar branches at all. Credit or debit cards no longer have to physically exist either thanks to innovations such Apple Pay or Google Pay. Today more than ever it is do or die when it comes to digital transformation in the financial industry as market saturation means anything less than a flawless customer experience will drive users towards the competition.

This isn’t an easy task. The financial industry is a complex, highly regulated environment and the customer expectation for a seamless experience across all devices and operating systems isn’t simple to execute. Banks are required to ensure any digital platform is always fully up to date with the latest terms and conditions – any small change necessitates apps and websites immediately updated immediately. This becomes even more complicated for traditional businesses that are implementing a long term digital transformation, as they need to map manual processes to legacy platforms and newly implemented software. It is for this reason that, despite huge investment in technology, poor customer experience is costing financial institutions $10 billion in revenue each year.

Less than perfect is not good enough

In the financial industry bugs or flaws in the technology can have large ripple effects. Take for example, the extremely competitive high stakes trading environment where markets rely on the analysis of thousands of data points – an algorithmic defect or technology failure could be catastrophic. When trading volumes surged following the announcement of the first successful large-scale clinical trial of a Covid-19 vaccine, investors rushed to key trading sites, such as Hargreaves Lansdown, AJ Bell and Fidelity, causing the sites to crash. This left many investors furious as they missed out on some serious money. It’s a critical failure like this that can have a lasting, negative impact on customer experience, the corporate brand and the bottom line. If a mobile app doesn’t perform as expected, frustrated customers won’t hesitate to shift their money and loyalty to a competitor.

Speed and performance is also another critical factor to consider. If the software’s not keeping up with the performance peaks, incorrect and potential costly decisions can be made.

Fintech is only as good as its testing strategy

Due to its make or break role for a business, testing software is critical. However, despite the financial industry embracing technology, software testing is still seen as a tick box exercise or an afterthought, but for financial service businesses to increase customer retention in our digital age this will need to change.  However, it’s essential that it does not impact the pace of delivery. In this age of automated trading, it follows that organisations need a test automation strategy that provides unparalleled testing precision and certainty while simultaneously keeping pace with DevOps. Testing technology enables businesses to act proactively rather than reactively – by utilising automated testing, firms can identify bugs or issues with the software before they become a problem. Or through load testing firms can simulate virtual users to understand the full impact of an increase in users. This helps companies identify and resolve any issues quickly, preventing crashes and keeps customers happy.

Testing also plays a huge role in ensuring applications comply with international standards and regulations, and in protecting against hackers who target digital banking portals. Many people who bank via mobile, especially those who are used to traditional branch operations, still aren’t convinced that something like direct deposit is secure, and often log in on desktops to perform transactions. Financial institutions have a responsibility to protect their customers and flawed technology is an open door to malicious operators.

In 2020, the world has pivoted to digital more than ever before. This has increased reliance on technology so we can  continue to carry out our everyday lives, including sorting our finances – whether that’s banking, investing or insurance. 2017 saw an important transition when digital companies overtook oil businesses as the highest value organisations, making data the world’s most valuable commodity. It is an unavoidable truth that software has now become as important to life as the basic utilities. Without it, we no longer are able to function. It is therefore necessary for the financial services industry to begin to take software testing more seriously – and not just for one off moments, but invest in long term value creation through technology adoption.