Bank to Clearing Payments – Self-Serve and Certification Testing
The Challenge for Market Infrastructure Operators
There are major projects ongoing in many markets around the world to introduce new payments market infrastructures, run by leading clearing houses. Two common themes in these projects are the introduction of ISO 20022 messaging and support for real time payments. When clearing houses roll out new infrastructure in a market, they need to support participating FIs (Financial Institutions) such as banks through the migration to the new infrastructure.
See the infographic: Payment System Modernization
The migration largely focuses on the area of testing. Clearing houses will usually support the FIs through three distinct phases in testing: early stage testing with self-serve tools, certification testing, and production testing. The Challenge for the clearing houses is to put in place an efficient program to support the FIs in the most effective way possible, and avoid costly, resource intensive, “white glove” support for each FI.
Supporting FIs with self-serve test tools
FIs want easy-to-use, self-serve test tools. They need to test that their systems create payments files that adhere to the messaging standards for their market, and they need to test that their systems can correctly process files received from the Infrastructure. For example, for ISO 20022-based real time payments, FIs need test tools that validate the files that they send to the Infrastructure (PACS.008, PACS.028 etc), they need tools that simulate the response files from the Infrastructure (PACS.002 etc) , and they need tools that create examples of files received from the Infrastructure (PACS.008, CAMT.056 etc).
The XMLdation Validator, Simulator and Test Data Creator are a suite of tools designed to help FIs in these types of scenarios. They are available via an ultra-simple Web UI, and make self-serve testing simple and easy.
Clearing houses can provide this web-based suite of tools to all FIs, as part of their programme to support FI migration.
Supporting FIs with APIs for automation
FIs increasingly rely on automation to introduce efficiencies into their testing processes. FIs try to eliminate time-consuming manual effort for routine testing tasks, and allow their testers to focus on higher value testing. In the case of real time payments, where payments can be initiated at any time and response times are measured in terms of seconds, manual creation of payments files, and ‘after the fact’ evaluation of test results just won’t work for real time payments. For real time, test automation is crucial.
XMLdation provide access to the Validator, Simulator and Test Data Creator tools via simple, RESTful APIs. For FIs that already use APIs in their testing processes, getting started with the documented XMLdation APIs is a very simple task. This allows FIs to automate routine testing tasks.
Clearing Houses can open up API access to the suite of test tools, for FIs that choose a test automation approach.
Clearing houses need to manage their technical staff, and ensure that they provide the right supports to the FI at the right time. It is costly for both the FI and the clearing house if their technical teams engage directly before both sides are ready. This is why a Certification Testing phase is introduced. It provides a way for the clearing house and FI to objectively measure the readiness level of the FI.
The Certification Test Solution from XMLdation allows an FI to complete a preconfigured set of tests, and demonstrate their readiness level to their own business team and to the clearing house. Once the FI has demonstrated that they have successfully completed the tests, they can engage with the clearing house to conduct production testing.
Clearing houses can use the Certification Test Solution to manage the Certification Testing stage with their FIs.
Production testing is usually conducted once self-serve and certification is complete. It is scheduled to take place within predefined test windows, and usually involves direct engagement between technical teams at the clearing house and the FI. It may involve multiple FIs.
Clearing houses, and the FIs that work with the clearing houses, will have their own preferences in terms of technology stack to be used for production testing. The XMLdation suite of test tools are delivered as microservices and easily deployed to a variety of infrastructures for the production testing phase. Tools include the Validator, Simulator and Test Data Creators used in earlier test phases, as well as our Mapping and Simulator tools.
Value for FIs – 90% faster
Scheduling access to clearing house test windows is typically a major pain point for FIs. For the clearing house, engaging with the FI before the FI implementation is mature is very costly. But for the FI, the early they can start their testing the better. With self-serve test tools, FIs can perform early stage testing according to their own timetable. Savings in elapsed time can be up to 90%.
By completing certification testing, FIs can move to the resource-intensive production testing phase with confidence, knowing that they have resolved many of the smaller issues that cause unnecessary delays.
Value for payments clearing houses
Clearing houses can manage migration of their FIs efficiently, automate routine tasks in the testing phase, and allow their valuable internal technical resources to focus on the most complex implementation and testing tasks with the FIs.