Software solutions are increasingly becoming useful in the financial sector as customer expectations continue to rise.
As of 2018, online platforms and mobile applications facilitate more than half of all financial transactions. As these numbers continue to rise, there is a need for effective software solutions in those transactions. There are also certain factors that push back the development and testing of these solutions.
How Financial Institutions Benefit from Developed and Tested Software Solutions
The development and testing of software solutions allow a number of institutions in the financial sector to improve their customer service. They also allow for the reduction of lead times. These institutions include commercial banks, stock brokerage firms, credit unions, insurance companies, asset management firms, finance companies and building societies. These institutions are always under pressure to comply with evolving regulatory requirements and avoid the risks of post-production defects.
As much as most financial institutions are benefiting from diverse software solutions, there are problems associated with the development and testing of these solutions. These challenges mostly affect the hired software engineers, testers, and the financial companies. They include identifying and amending defects, third-party integration issues, agile testing, infrastructure issues and legacy systems. Explained below are some of these challenges in detail.
Meeting Revenue Recognition Requirements
In the development and testing of software programs, the engineers and companies they're working for need to meet certain revenue recognition requirements. It is at times difficult for the financial companies to observe this rule due to limited project timelines or budgetary deficits. They also need to factor these requirements in the entire development and testing project that they're undertaking.
The requirements cut across customer contracts and accounting processes of a financial institution. To meet them, the project heads (CTOs or software engineers) need to involve an accounting/CPA expert in the entire project. Failure to meet the requirements may attract heavy fines from the government accounting authorities.
Identifying and Amending Defects
The entire process of developing, testing and developing a software program heavily relies on observation. Developers and testers may at times encounter defects during different stages of the process. It may become challenging to address these defects at the right time. At times, the developers and testers may miss to identify them and proceed with testing and deploying the program. In this case, they end up with a program full of errors.
Before its approval, a financial software product or service needs to go through several functional development and testing stages. Through these stages, different tools and professionals can take part in the work. If the development and testing tools aren't that effective, the final product may have defects. The same thing can happen if the professionals involved assume the errors found in their early stages.
The software development and testing processes are tedious and time-consuming for financial institutions at times. These institutions may find it hard to recruit the right software engineers for the job due to many recruitment challenges, including an influx of half-baked software engineers and high service fees asked by the potential engineers.
Most financial companies also find it difficult to decide between having in-house software developers and testers or outsourcing them. It is important for them to look at the size of the software they want to develop. They also need to review its possible impacts on their business activities.
Third-party Integration Issues
Gone are the days when software engineers developed standalone products. As third-party integration is becoming a concern in software development, the engineers are struggling to keep up with this change. They are trying hard to expand their knowledge of other software solutions that may work well with the ones they're developing. Without this knowledge, it is impossible for them to identify the third-party applications that they can integrate with their existing applications.
For instance, when a software developer is working on a financial management system (FMS), he or she may need to use third-party payment applications. These third-party applications will allow the users of the financial management system to conveniently make or manage payments. It is mandatory for the developer to have knowledge of how these third-party applications work for them to integrate successfully with the FMS program.
Agile Development and Testing
Software developers are finding a hard time adjusting to the agile development and testing advancement. This advancement allows them to continuously make changes to the existing code by rewriting or adding it. As they rewrite or add new code, fragmentation issues may arise. The developers find it difficult to frequently run tests on every new added or rewritten code. It is time for them to automate their software testing activities for them to easily identify errors in their code.
Infrastructure Issues and Legacy Systems
There are financial institutions that are reluctant when it comes to replacing their old computer systems, If you have the same problems, you can sell your IT equipment to get the financial resources for the new PC. As they delay to replace the systems, new financial software solutions may fail to run on these systems. Software engineers hired to develop and deploy software solutions to these institutions have a hard time doing their work. It is actually difficult for them to install the newly developed and tested programs on computers that run on outdated operating systems. Infrastructural issues such as low performing servers or memory hardware may also prove difficult to them as they carry out their work.
The future of software development and testing in the financial sector seems bright. This can only happen when financial companies make an effort of hiring or outsourcing experienced software engineers and testers. The companies should also upgrade their computer systems to support effective running of modern software solutions developed for them.