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Mitigating the risks of software failure within the Finance sector – Rod Cobain, Client Director, ROQ

This article was authored by Rod Cobain, Client Director at ROQ. ROQ are a premier software testing consultancy and a partner of FinTech North.


There are a great many questions surrounding the UK financial markets, with one being that the institutional banks are supposed to be losing customers, but are they? One view is that the customer base is still solid, and customers are just using new services from the FinTechs – more of a service loss than a customer loss. Another issue is that the Challenger banks are being seen as disrupters, but are they disrupters or just meeting a long-awaited demand for added value services?

It has been suggested that the real area of focus should be the financial services core systems and the additional platforms that are being bolted onto these environments. Regulated markets in general are seeing tighter controls being applied. These are aimed at insuring governance, data security and protection for the customer base – but the outstanding question is “are the safeguards also ensuring the quality of the environment as well as the solution?” Should we be expecting “world class” software systems from those sectors that control the financial health of our day to day lives. What defines world class? In my opinion it’s a combination of many factors and these can range from the planning / design process to ensuring there is enough budget to complete the project to deliver the quality of the working software. I canvased several key influencers within the financial market and requested an example of what they defined as “world Class”. To my surprise the answer had nothing to do with finance but related to a brand and that brand was Apple©; when I asked for the reason behind their answer, it was, “it just works”.

What was rammed home with enthusiasm was the fact that it’s not just a user that suffers when a system fails, but the business and its reputation – as we have just seen with the recent Facebook & WhatsApp outages. Just as Apple has a focus on style and performance, they recognise the need for quality and reliability. So, why has this view not been taken as an example and used to drive quality and assurance through financial enterprise systems? Concerns have been voiced from all areas including Parliament.

teve Baker, the Tory MP leading the committee’s inquiry, said: “The number of IT failures that have occurred in the financial services sector, including TSB, Visa and Barclays, and the harm caused to consumers is unacceptable. In fact, it was suggested “Pay for senior staff should be linked to how much attention they give to preventing IT failures and that regulators should step in if necessary”

So given this context, and even the comments from Westminster, this document is going to look at the key question:

“How can we mitigate the risk of software failure within the finance sector?”

To ensure true governance as well as a customer centric approach, the software environment must be stable and deliver the best experience possible. When we talk about “the customer” we do not just refer to the person in the street but also the internal users, who are also affected when a system has an outage.

Software failure effects all sectors as stated in numerous reports, but finance seems to get spotlighted more than most. So why has the industry not learned from their mistakes? There is no silver bullet. Any business can mitigate the risk of failure with better planning, quality engineering, good coding, along with a software quality framework that extends across the business estate. The cost of failure can be seen in many guises; loss of business credibility, customers migrating to competitors and in the worst case with regulated organisations, hefty fines, along with the adverse publicity.


Not so long ago, the process of Quality Assurance was an afterthought and when it did appear, it was the developers that did the testing. The term associated with this practice was “marking your own homework”. To a large extent this could have been responsible for the quality of the output. Now we are experiencing a major change. Enlightened CIOs are now seeing Quality Assurance as a key investment when it comes to higher quality software delivery, reduced cost of defect fixes and quicker route to market. The question that comes to my mind is, what do you think instigated the change of direction. More importantly, why has the baton of change not been passed on to more organisations?

In several reports published by eminent organisations such as KPMG and PWC, we can see a real need for a change in software quality adoption.

According to the Standish Group “only 16% of software projects were successful, 53% challenged (that is cost overruns, budget overruns or content deficiencies) and 31% cancelled. Furthermore, they say the average software project runs 222% late, 189% over budget and delivers only 61% of the specified functionality. Evidence suggests little has changed since then, budgets run out as development cost spiral, defects take longer to discover and fix and market entry is delayed.  At the end of April 2018, 1.9 million customers from a major bank experienced severe problems following the attempted migration of their accounts to the Proteo4UK system of Banco Sabadell. This caused Sabadell’s share price to fall by more than 4%, a loss in value of £330 million. In addition, the bank was expected to lose many customers and its income line suffered around £50 million in costs from waived overdraft fees and increased current account interest rates. Further, the UK’s Financial Conduct Authority (FCA) announced that they’d be launching an inquiry into the failure.

Is there a Problem or just an adoption issue?

During the design/architecting phase of any solution, a defined approach to quality needs to be adopted and should have the same priority as all other delivery elements. Failing to adopt this approach significantly increases the risk of poor quality, unhappy customers and huge fines. From what I have observed, this level of rigour and consideration is seldom deployed across organisations. The smaller, nimble FinTechs, tend to lead the way – primarily as they are technology companies that operate in the finance sector; not financial institutions trying to leverage technology.

So what can you do?

A quality culture starts with leadership. A CIO that understands the longer-term and big picture has the power to drive quality processes. I work for a business that is passionate about quality and ensuring organisations get this right; and more importantly, get it right first time. We have seen the delight on clients faces, when we help them overcome many hurdles – some political, some technical and many businesses critical. Our mindset drives a quality culture, just as Apple© have the reputation for getting it right – “it just works”. We as a business are focused on the same result and our culture pushes our teams to meet the expectations of our clients and beyond.  We continually drive the same mindset in everything we do.


Successful World Class organisations have proven the value of adopting a quality driven approach; the outcome has long term benefits that affect not just the quality of their software development and therefore the good name of the business, but also a direct saving to the bottom line. Experienced and enlightened CIO’s have come to see the phrase “Operational & Service Excellence ” as a description of the methodologies and technologies they should adopt for successful business outcomes. Global logos such as Coca Cola, Lego, and Hitachi, join Apple© as evidence of what getting it right first time does for the focus and perception of the business.

There are 5 key recommendations I would suggest for any business with quality issues surrounding software development:

  • Quality needs to be owned by everyone; custodians of quality within the organisation should be any stakeholder from budget holder, product owner, to user
  • Regardless of if its processes or software, a drop in quality will damage your business reputation and from that point it will be a long road to improvement, start resolving it now
  • You can learn from any outcome regardless of if it being a success or failure, if a success, then adopt more widely, if failure then align your business with one that will help you improve
  • Don’t compromise cost for quality, “if you think it’s expensive hiring a professional, try hiring an amateur”
  • Work with a trusted independent quality partner to get greater visibility of the exposure across your estate and processes; to create a roadmap to deliver longer term success

So as a way to enhance this opinion piece, I wanted to invite you to a panel webinar I am hosting on the 2nd  December 2021, where you can hear the opinion of industry leaders in the finance industry. They will share their insights in addressing these issues, and what challenges they have overcome within their organisations.

ROQ have also put in place a free testing clinic for any organisation that needs some free consultancy or help with their Quality Assurance issue, the link will take you right there –

Rod Cobain – Client Director, ROQ

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