Top Reasons Why API Testing In Open Banking Is Must

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Nichole White

Nichole White is a Technical Content Lead who loves writing on emerging technologies, such as Software Development, QA testing, Mobile App Development, and more along with industry expertise in Banking, Insurance, and Finance. Besides writing, she’s a traveler and is passionate about movies, reading, and food.

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API Testing In Open Banking

Open Banking is one of the revolutionary technologies in the world that empower banks to reinvent their business models. Banks can leverage open banking to partner with fintech and other third-party service providers to provide their customers with an extended experience. This rapidly evolving ecosystem is highly driven by open banking APIs which change the way to integrate with third-party providers.
In this blog, we will explore more about Open Banking and Open Banking APIs impact on banks and their customers. 

What is Open Banking, and how does it work?

Open Banking refers to the bank’s capacity to obtain the client’s consent before disclosing financial information to outside parties. The customer’s financial data, including transaction history, bank interactions, businesses used, and spending patterns, will be accessible to third parties. Due to Open Banking, FinTechs can use APIs to link their services to financial data. Open Banking signaled a shift from a closed data model allowing data to be shared among many stakeholders in the banking ecosystem with the help of the consumer.
By enabling customers to connect to other regulated suppliers, banks can provide their customers more control over their financial data. Software for managing money from a third party, like Intuit, can show all transaction information and balances in one location. Additionally, it will open the door for numerous fintech advances.
So, it is crucial to comprehend the business drivers underlying the introduction of Open Banking.

Business drivers working behind the advent of the Open Banking

Following are the essential business drivers behind the advent of Open Banking:
  • Co-innovation with third parties to expand the service offerings
  • Creation of smooth and quick customer journeys
  • looking forward to implementing new business models and revenue streams
  • Accelerated brand awareness and growth in the market
  • Enhance the market speed, without facing any risk
  • Overcoming the Fintech challenges
Even though we have seen the commercial drivers for the development of Open Banking. It is crucial to comprehend the fundamental guidelines and execution of Open Banking.

Benefits of leveraging Open Banking API for Bank or Financial Insitute

Banks can increase client involvement with the aid of open banking. Additionally, the open banking API provides real-time information that aids customers and organizations in making decisions regarding their financial holdings. Check out the top advantages of the Open Banking API:
  1. Customer Engagement: With the evolving financial ecosystem and customer demands, it enables customers to interact with their financial data in a secure, flexible, and future-proof manner.
  2. Payments: Increases digital revenue by enabling customers to use their cellphones to pay using digital and mobile wallets for nearly any reason.
  3. Banking-as-a-Service (BaaS): By ensuring speed, agility, and innovation, BaaS promotes an effective Open Banking API strategy through API-led connection.
  4. Remittance & Currency Exchange: Utilizes the Open Banking API to support international money transfers and remittances in a straightforward, quick, and affordable manner.
  5. Customized Product Offerings: Enables financial institutions to provide more transparent, individualized products and services, which is highly advantageous to customers.

Why is API testing in Open Banking important?

Banks must ensure that integrations are finished and tested as extensively as feasible when it comes to open API testing. During API testing, banks will primarily need to evaluate the data response and behavior of API queries. They will demand that APIs be created and tested that are in line with crucial business logic and processes.
When employing APIs, banks are required to take input data in the form of structured requests and deliver responses. Most API testing, including functional testing, dynamic data creation, complete regression testing, test scenarios that cover the entire ecosystem, performance, ad hoc scenarios, and reliable security testing, may be automated by banks.
Here are some statistics showing the dire demand for API testing services in the BFSI business, particularly the banking sector. 

  • The global API testing market is anticipated to grow from USD 447.4 million in 2017 to USD 1,099.1 million by 2022, at a Compound Annual Growth Rate (CAGR) of 19.69% during the forecast period, according to Markets and Markets.
  • By the end of 2022, the API testing market is anticipated to grow at the quickest rate in the BFSI vertical.
  • The market for API testing is being driven by the open API approach, which exposes a variety of financial APIs to other organizations. As a result, both its importance and the necessity to spend money on automated API testing are expanding.
According to these stats, banks need to actively implement open APIs if they want to stay on the cutting edge of FinTech innovation. To do this, financial entities must have a strong back-end infrastructure that functions in concert with open APIs, collaboration, and partnerships. In other words, you must have an automated testing and quality assurance approach!

Open Banking – Future of Banking

Based on our own experiences, we have found that testing strategies, such as the Web Services Validator tool for automated test data generation for SOAP and RESTful Services, have numerous advantages.
AgileSoft Systems, Inc. utilities and best practices help shrink the test execution cycle. With the aid of pre-written test scenarios and checklists, service virtualization is utilized to replicate request patterns, data parsers for JSON & XML queries, and Open API Accelerators. We have end-to-end test scenarios and checklists for the main open banking API capabilities, as well as test accelerators and other reusable test cases.

Need support? To understand more about the significance of API testing in Open Banking, Contact AgileSoft Systems‘ banking and API testing experts.

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