How to Put a Retail Banking System to the Test 2022

The title is self-explanatory. Today’s article will be a general “How-to” on testing a retail banking system. Come with me.

An Overview of Retail Banking:

It refers to banking that conducts direct transactions with consumers/customers as opposed to corporations/companies or other banks.

Consumer banking is another name for retail banking. To meet the needs of individual customers, it offers a variety of banking services such as savings accounts, current accounts, check transactions, credit cards, online banking, and loans.

retail banking application testing

Retail banking’s main activity is to accept deposits from one customer and lend credit to other customers in the form of loans. It all comes down to making various asset and liability products available to customers. This has expanded significantly in recent years.

also, see: Top 15 Best Virtual Credit Card/Debit Cards FREE in the USA (Jun 2022)

Retail Banking Functions: Front End Banking

  • Functions in Retail banking:
  • Front End Banking
  • Back End Banking
  • Channel Banking

Services in Front End Banking:

#1)  Account opening:

Back End Banking Channel Banking Services in Front End Banking:

Account opening is critical in banking. To proceed with any retail banking services, an account must be opened.

The procedure for opening an account is as follows.

Account creation

#2) Transactions with Tellers:

Teller is an abbreviation for “Cashier.” The two types of teller transactions are listed below.

  • Cash Transactions: This sort of transaction does the following:
  • Cash deposit/withdrawal – The account holder requests that the teller deposit or remove money from his or her account.
  • Currency note exchange – Exchanging foreign currency for local currency or local currency for foreign currency as requested by the customer.
  • Non-cash Transactions: This sort of transaction does the following:
  • Standing instructions – A consumer instructs the bank to pay a fixed/indefinite amount to another customer at a specific regular interval frequency for a fixed/indefinite time period.
  • Transfers are amounts transferred from one account to another.

#3) Product liability:

  • Savings account: A savings bank account is typically created by salaried individuals or those with a regular fixed income. Deposits are accepted by commercial banks, cooperative banks, and postal departments through the establishment of a savings bank account. The following are the main characteristics of a savings account:
  • A minimum balance should be kept.
  • Interest is calculated based on the balance.
  • Transfers and withdrawals are subject to restrictions.
  • Accounts current: The sum in a current account can be deposited and withdrawn at any time without notification. It is also suitable for making cheque payments to debtors. Current accounts are available in cooperative and commercial banks. The following are the main characteristics of a current account:
  • There is an overdraft facility available.
  • Transfers and withdrawals are not restricted.

# 4): Remittances

Transferring funds from one account to another using the methods listed below

  • Electronic form: An electronic fund transfer is simply the transfer of money from one account to another over an internet banking system using NEFT/RTGS.
  • Telegraphic transfer is done abroad, which involves moving money online from one country’s account to another country’s account. In general, transfer fees will be assessed to the sender’s account by the sending bank. There will be no transfer fees for receiving banks. However, in
  • extremely rare situations, recipient banks may impose a fee.
  • Non-electronic version:
  • Demand drafts and checks are among the oldest negotiable instruments in the banking system for transferring money in paper form with a clearing mechanism.

#5) Cards: The various sorts of cards are listed below.

  • Debit cards: A debit card has characteristics such as an automated teller machine (ATM) and a point of sale (POS). When a customer selects one of the aforementioned alternatives, the cash is deducted immediately from his or her bank account.
  • Smart cards: These are electronic cash cards that have an integrated circuit.
  • Credit cards: They allow you to “pay later” if you have an emergency or need something but don’t have the money at the moment. Once the statement has been generated, a minimum payment can be made.
  • Charge cards are similar to credit cards, except that card payments cannot be postponed. This is a card that needs full payment at the time of statement generation.
  • Here’s how to read a card.
    how to interpret a playing card

#6) Asset Products:

An asset product is simply a debt issued by a bank to a customer. In this case, the bank is the lender, and the consumer is the borrower.

Loans are divided into the following categories:

  • Secured loans: In this sort of loan, the borrower provides collateral to the lender as security when borrowing money, which is then utilized by the lender to reclaim the loan amount from the borrower. As an example: Household property records are used as collateral in mortgage loans. Vehicle documents are used as collateral in vehicle loans, for example.
  • Loans without collateral: There will be no collateral used as a security by the borrower to the lender in this sort of loan. For example, an educational loan or a personal loan in which the borrower is unable to provide any collateral as security to the lender.

Banking on the back end:

It mostly deals with checks, specifically check truncation, clearing, and settlement.

The images below depict how a check appears and provide detailed information about a check.

(Note: Any image can be expanded by clicking on it.)

Banking on the back end

#1) Check Truncation is the settlement of clearing transactions based on pictures and electronic data without the instruments moving physically.

#2) Settlement & Clearing:

Inward clearing is the process through which checks drawn on our bank and deposited with other banks are received and applied to the drawer’s accounts. All instruments are matched against the respective account balances as well as status (stopped, utilized, etc.) and then passed or denied by the system throughout the inward clearing process.
Outward clearing refers to checks deposited and drawn on another bank that have been sorted and presented to clearing. A cash letter is accompanied by a list giving the amount of each check, the total amount of checks, and the number of checks submitted to the clearing house or federal reserve office as part of the outward clearing process.

#3) Examine the cleansing procedure:

The following diagram depicts the check clearing process:

Procedure for clearing checks

#1) Mobile Banking Services in Channel Banking

Alerts and transactions are included in mobile banking.
When a customer registers his or her cellphone number during account opening, he or she will be able to get alerts such as credit/debit alerts, account balance alerts, and bill payment alerts.
The consumer can also do operations such as fund transfer, bill payment, account balance inquiry, and so on.

#2) Online banking

Internet banking is simply online banking in which the user logs into the banking website.
This comprises cash transfers, bill payments, chequebook requests, inquiries, mutual funds, insurance, and so on.

#3) ATM Transactions

Automated Teller Machine banking entails a consumer inserting a debit/credit card into an ATM machine and withdrawing cash.
This also contains transactions such as inquiries, cash deposits into the account, and so on.

#4) The point of sale (POS)

Points of sale are used in stores where customers pay with a debit/credit card rather than cash.
An invoice will be generated indicating that the consumer has paid for the products purchased.

Services in Channel Banking:

The following are some retail banking application screenshots:

#1) An example of a snapshot for opening a savings bank account in local currency.

create a local currency savings bank account

#2) A sample screenshot for opening a foreign currency savings bank account.

create a foreign currency savings bank account

#3) An example of a screenshot used to open a current account.

open a checking account

#4) Example screenshot of transferring money from one account to another.

transfer funds from one account to another

#5 Example of a teller transaction – cash deposit local

teller transaction – local cash deposit

#6) Example of a teller transaction – local cash withdrawal

teller transaction – local cash withdrawal

#7 An example of a snapshot for adding a payee and transferring funds using channel banking.

Adding a payee and transferring funds via channel banking

1 Adding a payee and transferring funds via channel banking

Positive banking application test scenarios:
1) Before creating an account, check to see if the client information is available in the application.

2) Check that all essential fields, such as customer ID, currency, product code, and so on, are filled out in order to open an account.

3) When opening a savings or current banking account, ensure that the relevant product code is entered.

For example, when opening a current account, choose a product code that corresponds to the current account, and when opening a savings account, use a product code that corresponds to the savings account.

4) When opening an account, ensure that the currency is correctly selected, i.e., either local or foreign currency.

For example, if you’re starting a local savings account, choose INR as the currency, and if you’re opening a foreign savings account, choose a foreign currency.

5) When moving funds from one account to another, ensure that all essential fields, such as debit amount, debit account number, credit amount, credit account number, and so on, are filled in.

6) For telegraphic transfers, ensure that the debit and credit currencies are different.

7) For teller transactions such as cash deposits and withdrawals, double-check that the credit or debit amount is entered correctly. Also, ensure that all of the denominations entered match the overall debit or credit amount.

8) Check that check details have been captured in the retail banking application by inputting the check number, amount, customer, and so on.

9) Verify inward clearing by supplying information such as the debit amount, the debit account, and the credit account.

10) Confirm outward clearing by supplying information such as credit amount, credit account, and debit account.

11) Ensure that all card details, such as card number, valid through, customer, and so on, are encrypted and kept in the system, as this is very sensitive data.

12) Determine whether a payee may be added via channel banking by supplying all required information such as account name, account number, and so on.

13) Check to see if the account transfer was completed successfully through channel banking by supplying all required information such as transaction type, amount, and from an account for an existing payee.

14) Check to see if communications are received when a transaction is completed via channel banking.

15) When creating a secured loan, double-check the collateral data.

16) Ensure that no collateral information is provided when creating an unsecured loan.

Negative test scenarios: 1) Verify the establishment of an account with incorrect client information.

2) Confirm account creation by not selecting a product code or any of the essential entries.

3) Double-check the creation of a savings banking account by entering the product code as a current account and vice versa.

4) Confirm the creation of a local currency account by entering the amount in foreign currency and vice versa.

5) Verify the telegraphic transfer by using the same debit and credit currency. It will be a regular account transfer rather than a telegraphic transfer.

6) Enter credit amount to verify teller transaction cash withdrawal and vice versa.

7) Provide the invalid denominations to the teller to verify the transaction.

For example, if the credit or debit amount is 150, make the denomination for 100 1 and the denomination for 50 2 The system should not allow the transaction to occur.

8) Check to see if a payee may be added via channel banking by supplying an account name that does not match the account number.

For example, if the account name is Sita and the account number is 12345, then for testing purposes, use Rama as the account name and 12345 as the account number. The system should not allow the addition of a new payee because the account name and number do not match.

9) Check if a payee may be added via channel banking by entering an invalid IFSC code.

10) Check if a payee may be added via channel banking by leaving out any mandatory fields.

11) Check to see if an account transfer through channel banking is completed without completing any of the essential fields.

12) Check to see if a message is received when an incorrect mobile number is entered.

13) When creating an unsecured loan, provide collateral information.

For example, when creating an educational loan, provide mortgage information as collateral. The system should not allow the creation of an educational loan with mortgage information.

14) Do not give collateral data while creating a secured loan.

For example, do not include collateral information when creating a mortgage or auto loan. The system should not enable you to continue.

What is Negative Testing and How Do You Write Negative Test Cases?

1) Verify that separate user’s login into the same retail banking application using different systems at the same time.

2) Confirm that the user can log into the retail banking application in a few seconds by giving a valid user id and password.

3) Test logging into the application when the server is unavailable.

1) Log in to the retail banking application using a legitimate user ID and password, and check that the password field is encrypted.

2) Test login into the retail banking application by entering an incorrect user ID or password.

3) Test logging into the program by leaving one of the fields blank (userID or password).

Tips for testing retail banking applications:

To begin testing this sort of application, it is necessary to be familiar with retail banking terms.
The tester should focus primarily on the test data that is generated or used during testing. For example, the tester should be able to offer accurate customer or account information when opening a saving, current, or loan account.
When testing check transactions such as inward or outward clearing, it is also critical for a tester to understand the functioning of check processing.
Conclusion: In today’s environment, retail banking apps are critical since everyone is connected in them, either directly or indirectly.


In today’s environment, retail banking apps are critical since everyone is connected in them, either directly or indirectly.

A tester can begin testing a retail banking application with the simple functionality and test scenarios supplied above.

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