ATM testing strategies must evolve for banks to avoid downtime

ATMs have become increasingly complex as technology has evolved, yet banks woefully underestimate the testing required to properly maintain this channel and maximise network availability. As the Flickr group ATM crashes clearly shows, ATM downtime occurs relatively frequently and this can impact upon brand reputation and revenue.

The testing of the ATM itself is just the tip of the iceberg as there are numerous moving parts that sit behind it. As banks migrate from proprietary systems to a multi-vendor Windows-based environment, they must cope with the frequent updates and fixes to the Windows platform as well as updates to the numerous other applications resident on, and connected to, the ATM. Furthermore, banks are faced with new software releases and functionality upgrades at the ATM, which often involve short timeframes. This increased level of change requires frequent and extensive testing, which is no longer possible with outdated testing strategies, particularly those that rely on manual processes. The result is poorly tested products and system updates, which can lead to ATM downtime, lost revenues and a damaged brand reputation.

While banks have implemented various forms of ATM testing procedures for some time, all too often they tested the different elements of the ATM service in isolation, without employing a holistic approach. This old approach, based on a static application software and operating system environment, mainly focused on message testing between the ATM and the host. However, this strategy is no longer fit for purpose and some banks have lost control through applying these principles to an environment which now looks very different.

An ATM alone will require several hundred tests just to confirm operation of its basic functionality. However, banks must consider all of the messaging streams using all different combinations of card types and authorisation systems, as well as interaction between all the applications and the operating system resident on a modern ATM. When considering all of the scenarios multiplied by the different card types and authorisation routes, best practice dictates that a test strategy should encompass between 5,000 and 8,000 test cases.

Banks must now regain control through extensive and unified testing of the various elements as part of a unified, end-to-end and automated testing strategy. This will take account of the changes implied by a more modern technology environment and enable the bank to test more frequently, extensively and cost-effectively, ensuring greater reliability at the ATM for consumers.

Reducing downtime remains top ATM priority for banks

We got some interesting results from the survey we conducted at ATMIA European ATMs show. Combating network downtime continues to be top of the list of ATM priorities over the next 12 - 18 months. This issue also topped the list at last year’s show in April 2008, highlighting the ongoing challenge banks face to maintain their ATMs.

Unsurprisingly, cost pressures on self-service banking projects are inevitably increasing and the majority of respondents (61%) said that tighter control of budgets was the biggest change in priorities since the onset of the financial crisis.

This focus on addressing the fundamentals of the ATM is reflected in a comparison of the results year-on-year, which shows a marked shift in where banks are placing their efforts. Rolling out new services at the ATM was the second most cited priority last year but appeared bottom of the list this year. Instead, integrating the ATM channel with other banking channels moved to second place.

Finally, and perhaps somewhat surprisingly given the current environment, over half (53%) of banks do not currently outsource their testing function. This highlights the potential that the market still holds for specialist test outsourcers, particularly the large India-based providers.

These results show an increased emphasis on costs, the move away from introducing new services, and the shift to integrating the ATM with their multi-channel strategy. All these points suggest that resources are being focused more intently on the core basics – namely, maintaining quality of service through the ATM and ensuring it is effectively integrated with the rest of their operations.

Martin Macmillan

Should banks trust same vendors to “mark their own homework”?

True vendor independence and open standards functionality is becoming increasingly important in the US as well as elsewhere, with increased regulation and economic instability impacting banks across the board. So what does true open architecture ATM technology mean in today’s banking environment?

Open standards-based ATM software solutions offer financial institutions the ability to effectively unlock the potential of the ATM and self-service channel. Using open standards-based technology, financial institutions can select alternative suppliers for their ATM and self-service software, as long as their technology conforms to XFS specifications, and also be able to interact more easily with other third-party applications on the ATM. This approach allows banks to reduce costs through effective commoditisation of the hardware, decreased software costs, and increased customer service levels through providing a consistent user interface across multiple types of ATM hardware.

By removing the proprietary lock on the ATM network, hardware vendors are forced to compete with independent software vendors, and banks can truly have the ability to select the solutions that are right for their institution.

However, this lock on the ATM network is still being maintained as vendors bundle their software, services and hardware together into one seemingly comprehensive package. This not only allows for a very opaque pricing structure but also makes it harder for banks to have the checks and balances necessary for an unbiased picture of how the ATM network is operating. Using the bundling system, the same ATM hardware provider tests and monitors its performance and reliability. The question remains, should banks trust those same vendors to “mark their own homework”?

Steven Lund