Software Testing Support Open Banking

How does Software Testing Support Open Banking?

Last updated on April 7th, 2024 at 01:14 pm

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Software quality plays a vital role when it comes to the development of a highly-efficient software application. If a software app is complicated with thousands of dependencies, then the testing process requires more time, and resources. Open banking is a revolutionary change in the banking and financial services industry, specifically in the UK and Europe. It shares a financial provider’s data with third-party companies. For instance, banks have to share its customer’s data with the customer approved third-party apps in a secure network. This trend was introduced by the Berlin Group in Europe since 2004. They have been working on payments interoperability standards. Another EU mandate, Payment Services Directive (PSD2) requires banks to share customer transaction data with all licensed third-parties. All of this is done through the application programming interfaces (APIs). A banking app testing company ensures meeting these standards when testing open banking apps. 

How Does Open Banking Work?

With more banks following this approach, the need for software testing has increased. It shifts the power from big banks to the consumers and encourages new opportunities in the banking industry. Open banking provides banks with the following opportunities:

Control of Owned Data:

In the current digital era, privacy and control are important to consumers and open banking provides total control over their data. Consumers decide who can access their data and granting access to data is just a click or button away. 

Improved Financial Products:

The growing fintech movement created better opportunities for banks. Open banking allows new fintech startups, while customers enjoy improved products. New banking apps create unique offers and enhance brand loyalty. 

Better Financial Management:

Customers can manage their finances better and make better financial decisions with the help of data-driven recommendations. 

Cost Reduction:

Open banking also allows direct interaction with the customers. It cuts down the cost of intermediary sources. 

Fraud Prevention:

Open banking makes data sharing easier in a secure and encrypted manner. The information is provided via token to the third-party requester, which means the third-party does not sort any of the information. 

The Role of Software Testing Companies

Since open banking is the talk of the town, more and more financial institutes are considering to adapt this approach. It creates more opportunities for consumers to connect with millenials, and opportunities to cross-sell across various platforms. Open banking also provides financial service providers with new business models, as they can connect with the banking customers. Application testing services companies work in the best interest to ensure security while testing open banking software apps. The key to a successful open banking strategy is to simply work on the security aspect. When customers feel comfortable with sharing their information, it allows the banking and financial services industry to grow. Hence, security testing is essential to achieve the main goals. With a rigorous software testing service, open banking can be promoted. Third-party companies have nothing to do with sorting this data, and so data security allows customers’ complete control over what information is being shared with these third-parties.