In this piece, we shall explore various facets of evaluating the retail banking system and offer valuable advice for testers. Let’s get started!
Overview of Retail Banking:
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Also referred to as consumer banking, retail banking is aimed at offering banking services to individual patrons directly. These services encompass saving accounts, current accounts, transaction checks, credit cards, digital banking, loans, and more, all tailored to fulfill the needs of each customer.
The main role of retail banking is to accept deposits from patrons and extend credit in the shape of loans to others. It entails offering a range of asset and liability products to patrons, which have seen remarkable growth in recent times.
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What You Will Discover:
- Functions in Retail Banking
- Services in Front End Banking
- Back end Banking
- Services in Channel Banking
- Test Scenarios for Retail Banking
- Positive Test Scenarios for Banking Applications
- Negative Test Scenarios
- Performance Testing Scenarios
- Security Testing Scenarios
- Tips for Testing Retail Banking Applications
- Conclusion
Functions in Retail banking:
- Front End Banking
- Back End Banking
- Channel Banking
Services in Front End Banking:
#1) Account creation:
A crucial aspect of retail banking is account creation. To avail any services, patrons must open an account. The process is outlined in the following steps:
#2) Teller Transactions:
A “teller” generally refers to a cashier. Teller transactions can be divided into two categories:
- Cash Transactions: Such a transaction includes:
- Cash deposit/withdrawal – Patrons can request cash deposits or withdrawals from their accounts.
- Currency note exchange – Customers can change foreign currency to local or vice versa
- Non-cash Transactions: This transaction type involves:
- Standing orders – Patrons can instruct the bank to make regular payments to another patron for a specified or indefinite period.
- Transfers – Account holders can transfer funds from one account to another.
#3) Liability products:
- Savings account: Regularly salaried individuals or those with consistent fixed income typically open savings bank accounts. Commercial banks, co-operative banks, and postal departments accept deposits via savings bank accounts. Key features of a savings account include:
- A minimum balance must be maintained.
- Interest is earned on the account balance.
- Transfers and withdrawals are subject to specified restrictions.
- Current account: Current accounts allow deposits and withdrawals at any time without advance notice. They are ideal for making payments to creditors using checks. Current accounts can be opened in co-operative and commercial banks. Key features of a current account are:
- Overdraft facilities are available.
- No restrictions on transfers and withdrawals.
#4) Remittances: Customers can transfer money from one account to another using the following options:
- Electronic form:
- Electronic fund transfer allows customers to transfer money online between accounts using NEFT/RTGS.
- Telegraphic Transfer enables customers to transfer money online from one nation to another. Transfer charges may apply to the sender’s account, while receiving banks usually do not charge fees.
- Non-Electronic form:
- Demand draft / check: These are negotiable instruments used for transferring money in paper form with a clearing mechanism.
#5) Cards: Customers have a variety of card types available:
- Debit cards: Debit cards come with ATM and POS features. When customers utilize these options, funds are directly debited from their bank accounts.
- Smart cards: These cards store electronic cash and include an integrated circuit.
- Credit cards: Credit cards provide the flexibility to “pay later” in case of emergencies or immediate financial needs. Minimum payment can be made after the statement is generated.
- Charge cards: These cards require full payment upon statement generation, with no deferral option.
- Reading a card:
#6) Asset Products: Asset products refer to the debts provided by banks to customers. In this scenario, the bank serves as the lender and the client as the borrower. Loans can be classified as follows:
- Secured loans: In secured loans, borrowers provide collateral as security during borrowing. Mortgage loans and vehicle loans are common examples.
- Unsecured loans: Unsecured loans do not demand collateral as security, making them suitable for educational or personal loans, among others.
Back end Banking:
Back end banking majorly handles check processing, including check truncation, clearing, and settlement.
Here’s an example of a check:
(Note: Click on any image to enlarge it)
#1) Check Truncation:
Check truncation involves settling clearing transactions based on images and electronic data without the physical movement of the instruments.
#2) Clearing & Settlement:
- Inward clearing: Considering all checks drawn on our bank and deposited with other banks, inward clearing checks instruments against respective account balances and statuses (stopped, used, etc.) before approving or rejecting them in the system.
- Outward clearing: Outward clearing includes checks deposited and drawn on another bank. After sorting, they are presented for clearing. The process includes sending a batch of checks packaged to the clearing house or federal reserve office, accompanied by a cash letter containing check details.
#3) Check clearing process:
The check clearing process is as follows:
Services in Channel Banking:
#1) Mobile Banking
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