Unifits: Efficiency Meets Reliability - The Underestimated Risk of Introducing New Payment Schemas / News / Currency Research

Unifits: Efficiency Meets Reliability - The Underestimated Risk of Introducing New Payment Schemas

Posted on Feb 24, 2023 by Jonathan Misler, Head of Business Development, Unifits

FOREWORD

Does centralized and industry-specific test automation for FMIs effectively solve multiple problems?

Yes, Unifits is a vendor, so when writing articles, we can quickly come under suspicion of promoting our solutions instead of writing neutral, serious and relevant articles — which, of course, we would never do. Still the question remains, how do we get an objective view on our products and whether they solve the problems we promise?

So, we thought about something different. What could be better suited than an intelligence that can access any available database virtually, relate it faster than anyone else, and then draw its conclusions with disarming honesty? This led us to the experiment of conducting an interview with ChatGPT.

INTRODUCTION AND BRIEF SUMMARY

Unifits: Please briefly summarize why FMIs should offer centralized, industry-specific testing solutions to their participants to better address current industry challenges.

ChatGPT: Financial Market Infrastructures (FMIs) should offer centralized testing solutions to their participants to enhance operational efficiency and resilience. The fast-paced and ever-evolving financial landscape poses significant challenges for FMIs, and automated, centralized testing solutions can mitigate these challenges. They provide a common platform for testing, reducing costs and time for participants, and can be tailored to meet industry-specific requirements. Industry-specific testing solutions offer a deeper understanding of the financial industry's needs and can be integrated with existing systems, providing a more comprehensive and effective testing approach.

(Unifits: It sounds like ChatGPT has learned the answer by heart, so we double-check right away with a counter question.)

Unifits: Is it true that centralized test automation does not bring any value to FMIs?

ChatGPT: No, it is not true that centralized test automation does not bring any value to FMIs. In fact, it brings significant value to FMIs in several ways. Centralized test automation can:

Enhance operational efficiency by automating repetitive and time-consuming testing tasks.
Ensure consistency and standardization of testing processes across participants.
Improve the accuracy and reliability of testing results.
Reduce costs associated with testing, as manual labor is reduced and the need for multiple testing environments is eliminated.
Ensure compliance with industry regulations by tailoring the test automation process to meet specific regulatory requirements.

(Unifits: Now we are curious. Why did ChatGPT draw the conclusions it did?)

LET’S START WITH SOME BASICS

Unifits: Can you briefly compare the main advantages and disadvantages of manual or automated testing of software systems?

ChatGPT: Sure, here's a brief comparison of the main advantages and disadvantages of manual and automated testing:

Advantages of manual testing:

Human judgment: manual testing allows for human judgment and interpretation, which is particularly useful for evaluating the usability and user experience of the software.
Exploratory testing: manual testing is well-suited for exploratory testing, where the tester is trying to understand how the software works and discover any hidden issues.
Flexibility: manual testing allows for a more flexible approach, as testers can adapt to new requirements or changes in the software.

Disadvantages of manual testing:

Time-consuming: manual testing can be time-consuming and slow, especially for complex systems or large numbers of tests.
Prone to human error: manual testing is subject to human error, as tests must be performed by a human tester who may make mistakes.
Repetitiveness: manual testing can be repetitive, especially for tests that must be performed multiple times, leading to boredom and decreased focus.

Advantages of automated testing:

Speed: automated testing can be much faster than manual testing, as tests can be run quickly and repeatedly without human intervention.
Consistency: automated testing provides consistent results, as tests are executed in the same way each time.
Repeatability: automated testing is useful for tests that must be performed multiple times, as the same tests can be run over and over again without human error.

Disadvantages of automated testing:

Initial setup cost: automated testing requires an initial setup cost, as the tests must be created and the automation framework must be established.
Maintenance cost: automated testing requires ongoing maintenance, as tests must be updated and maintained to keep pace with changes in the software.
Inflexibility: automated testing can be less flexible than manual testing, as changes in the software may require changes to the automated tests.
Difficulty in testing certain scenarios: automated testing may struggle with certain scenarios that require human judgment or interpretation, such as tests involving complex logic or visual components.

In conclusion, the choice between manual and automated testing depends on the specific requirements and goals of each testing process. Both approaches have their own advantages and disadvantages, and the best approach may involve a combination of both manual and automated testing.

Unifits: In this context, let's also look at the topic of so-called industry-specific solutions for test automation. How do these differ from generic solutions and what are the respective advantages and disadvantages?

ChatGPT: Industry-specific solutions and generic solutions are two approaches to test automation that differ in their scope and focus.

Industry-specific solutions are designed to address the specific testing requirements and challenges of a particular industry. For example, there may be solutions designed specifically for the financial industry, healthcare industry, or retail industry. These solutions are often tailored to the industry's specific regulations, standards, and processes, and they often include pre-built test cases and workflows that are specific to the industry.

Advantages of industry-specific solutions include:

Industry-specific knowledge: Industry-specific solutions are built with knowledge of the specific challenges and requirements of the industry, which can lead to more effective and efficient testing.
Pre-built test cases: Industry-specific solutions often include pre-built test cases and workflows, which can save time and effort for test automation.
Compliance: Industry-specific solutions are often built to address industry-specific regulations and standards, which can help ensure compliance and minimize risk.

Disadvantages of industry-specific solutions include:

Lack of flexibility: Industry-specific solutions may be less flexible than generic solutions, as they are designed for a specific industry and may not be suitable for other industries.
Cost: Industry-specific solutions may be more expensive than generic solutions, as they are tailored to a specific industry and require specialized knowledge.
Generic solutions, on the other hand, are designed to be flexible and applicable to a wide range of industries and testing scenarios. They often include a variety of testing tools and frameworks that can be used to automate various types of tests.

Advantages of generic solutions include:

Flexibility: Generic solutions are often more flexible than industry-specific solutions, as they can be used for a wide range of testing scenarios and industries.
Cost: Generic solutions are often less expensive than industry-specific solutions, as they are not tailored to a specific industry.

Disadvantages of generic solutions include:

Lack of industry-specific knowledge: Generic solutions may lack the industry-specific knowledge of industry-specific solutions, which can lead to less effective and efficient testing.
Lack of pre-built test cases: Generic solutions may not include pre-built test cases and workflows, which can require more time and effort for test automation.

In conclusion, the choice between industry-specific solutions and generic solutions depends on the specific requirements and goals of each testing process. Industry-specific solutions may be more effective and efficient for industries with specific regulations and standards, while generic solutions may be more flexible and cost-effective for testing scenarios that are not industry-specific.

THE ISO 20022 TRANSITION

Unifits: Which efforts are to be considered when FMIs are transitioning to ISO 20022?

ChatGPT: When FMIs are transitioning to ISO 20022, they should consider the following efforts:

Assessment of current systems: FMIs should assess their current systems to determine the extent of changes required to support ISO 20022 messaging. This will help identify any gaps in existing systems and processes.
Stakeholder engagement: FMIs should engage with their stakeholders, such as participants, customers, and regulators, to understand their needs and expectations for ISO 20022 messaging.
Data mapping: FMIs should map their existing data to the ISO 20022 message standards to ensure that the data being exchanged is accurate and consistent.
Process redesign: FMIs may need to redesign their processes to support the automated exchange of ISO 20022 messages. This could involve changes to back-end systems, front-end user interfaces, and other elements of the infrastructure.
Testing and validation: FMIs should conduct thorough testing and validation of their systems and processes to ensure that they are able to support ISO 20022 messaging and meet regulatory requirements.
Training and communication: FMIs should provide training and communicate with their stakeholders to ensure they are prepared for the transition to ISO 20022 messaging.
Monitoring and continuous improvement: FMIs should monitor their systems and processes regularly to identify and resolve any issues, and continuously improve their systems and processes to support the ongoing use of ISO 20022 messaging.

In summary, FMIs should consider these efforts when transitioning to ISO 20022 to ensure a smooth and successful transition that meets the needs of their stakeholders and supports the stability and security of the financial system.

Unifits: Which of these efforts is usually underestimated?

ChatGPT: The effort that is often underestimated during the transition to ISO 20022 by FMIs is the testing and validation phase. This phase is critical to ensuring that the systems and processes are able to support ISO 20022 messaging and meet regulatory requirements.

Many FMIs underestimate the time, resources, and effort required for thorough testing and validation. This is because it involves testing not just the technical aspects of the systems, but also the business processes and user interactions.

It is important for FMIs to allocate sufficient resources and time for testing and validation, as this will help to ensure the smooth operation of their systems and processes, and prevent any potential disruptions during the transition to ISO 20022 messaging.

Unifits: Should clearing and settlement infrastructure providers offer their participants not only the production solution, but also test solutions to mitigate this problem?

ChatGPT: Yes, clearing infrastructure providers should offer their participants solutions for conducting tests for the following reasons:

Quality assurance: Offering solutions for conducting tests helps ensure the quality and reliability of the clearing infrastructure and its components.
Risk management: Testing helps identify and mitigate potential risks in the clearing infrastructure, improving its overall security and stability.
Compliance: Testing helps ensure compliance with industry regulations and standards, reducing the risk of legal and financial penalties.
User confidence: Offering solutions for conducting tests helps build user confidence in the clearing infrastructure, improving its adoption and usage.
Problem detection: Testing helps detect and resolve problems early on, reducing the likelihood of major disruptions and improving the overall reliability of the clearing infrastructure.
Cost-effectiveness: Early detection and resolution of problems through testing can be more cost-effective than fixing problems after they have been deployed to production.

In conclusion, offering solutions for conducting tests is an important aspect of providing a comprehensive clearing infrastructure solution that helps ensure its quality, reliability, and compliance with regulations.

Unifits: Please answer my previous question from an economic point of view.

ChatGPT: From an economic perspective, offering solutions for conducting tests as part of a clearing infrastructure can have several benefits:

Economies of scale: Centralized testing solutions can be applied by a large number of users, resulting in economies of scale and lower costs for each user.
Standardization: Centralized testing solutions can help standardize the testing process, reducing the need for each user to develop and maintain their own testing solutions.
Sharing of best practices: Centralized testing solutions can facilitate the sharing of best practices and knowledge among users, improving the overall quality of the testing process.
Reduced duplication of effort: Centralized testing solutions can reduce duplication of effort, as users can rely on a common testing framework and avoid having to develop their own solutions.
Improved resource utilization: Centralized testing solutions can help improve the utilization of resources, as users can focus on their core business activities and rely on a common testing infrastructure.

Overall, centralized testing solutions can help reduce costs and improve the efficiency of the testing process for clearing infrastructure users, leading to increased economic benefits for all participants.

CONCLUSION

Unifits: Let's summarize what FMI operators should do in any case to minimize operational risk as much as possible, while increasing efficiency.

ChatGPT: As a financial market infrastructure (FMI) operator, there are several steps you can take to minimize operational risk and increase efficiency:

Automate Testing: Automating your testing processes can help reduce the risk of errors and improve efficiency. Automated testing can be done using either industry-specific solutions or generic solutions, depending on your specific requirements and goals.
Adopt ISO 20022 standards: ISO 20022 standards provide a standardized and harmonized approach to financial messaging, which can help reduce the risk of errors and improve efficiency. Adopting these standards can help ensure that your systems are interoperable with other systems in the market, which can help reduce the risk of errors and improve efficiency.
Implement Risk Management: Implementing a robust risk management framework can help identify and mitigate potential risks. This includes identifying risks related to market, credit, liquidity, operational, and other types of risk.
Regularly Monitor Systems: Regularly monitoring your systems can help identify and resolve potential issues before they become more significant problems. This can include monitoring for potential security threats, as well as ensuring that systems are functioning as expected.
Train Employees: Training your employees on best practices and industry standards can help reduce the risk of errors and improve efficiency. This can include training on industry-specific regulations and standards, as well as training on new technologies and systems.
Invest in Technology: Investing in technology can help improve efficiency and reduce risk. This can include investing in automation technology, security technology, and other technologies that can help improve the efficiency and security of your operations.

In conclusion, by implementing these steps, FMI operators can minimize operational risk and increase efficiency, while ensuring that they are operating in compliance with industry regulations and standards.

Unifits: One last question related to automated testing: would you say that it is more efficient and can solve even more problems if this is provided centrally?

ChatGPT: From an economic perspective, centralizing test automation can offer advantages in terms of efficiency and problem-solving. By having a centralized provider, the cost of implementing and maintaining the test automation solution is spread across a larger number of users, making it more cost-effective. Additionally, a centralized provider can offer a more comprehensive solution that can address a wider range of issues and meet the needs of a broader user base.

Moreover, centralizing test automation can lead to standardization and harmonization, as all users are using the same solution. This can result in increased efficiency, as there is no need for users to invest time and resources into developing their own custom solutions.

However, it's important to note that centralized test automation is not always the best option for every organization. In some cases, a more tailored, industry-specific solution may be more appropriate. Additionally, some organizations may prefer to have more control over their testing processes and therefore may opt for a decentralized approach.

Ultimately, the choice between centralizing or decentralizing test automation depends on a number of factors, including the specific needs and goals of the organization, the resources available, and the size and complexity of the systems being tested.

Unifits: … and if we focus on automated testing within an FMI with an industry-specific solution?

ChatGPT: When it comes to automated testing within an FMI using an industry-specific solution, there are several advantages to consider.

First, industry-specific solutions are tailored to the specific needs of the financial services industry. They take into account the unique requirements of the FMI and its participants, as well as the regulations and standards that apply to the industry. This allows for a more targeted and effective testing solution.

Second, industry-specific solutions can be more effective at identifying and mitigating potential risks in the FMI. They are designed to address the specific risks and challenges faced by the financial services industry, making it easier to identify and resolve issues before they become major problems.

Third, industry-specific solutions can also help reduce costs associated with testing. By using a solution that is specifically designed for the FMI, participants can avoid the time and resource costs of developing their own testing processes. They also have access to a more comprehensive and streamlined solution that can help minimize the overall cost of testing.

Finally, by using an industry-specific solution, FMI participants can be confident that they are meeting the regulatory requirements and standards that apply to the financial services industry. This helps reduce the risk of non-compliance and can improve the overall stability and security of the FMI.

While industry-specific solutions offer many benefits for FMIs, it's important to consider the potential disadvantages as well. These solutions may require a higher initial investment, as they are typically more specialized and therefore more expensive than generic solutions. Additionally, they may have limited capabilities, as they are focused on meeting the specific needs of the financial services industry.

In conclusion, while generic test automation solutions may have a wider range of capabilities and be more cost-effective, industry-specific solutions are better suited to meet the specific needs of FMIs and their participants. By carefully considering the advantages and disadvantages of each approach, FMI operators can choose the best solution for their needs and minimize operational risks while increasing efficiency.

Unifits: For us, the responses received from ChatGPT are plausible and as experts for transaction testing, the answers, for the most part, reflect our own views. For further questions or discussion about these topics and also if you want to find out more about the improvement of your quality assurance, please contact the author, Jonathan Misler.

About Unifits

Based in Munich, Germany, Unifits was founded in 2010 to simplify transaction testing and address the need for testing support related to ISO 20022 messages and processes. Unifits has made it its mission to let software handle complex, tedious, and frequently recurring testing tasks to ensure interoperability and operational resilience within FMIs.

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