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Trading system testing: a practitioner checklist

By Vaibhav Shukla, Senior Vice President, Global Services, Itiviti
December 3, 2018
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End-to-end testing of trading environments is essential for financial services firms today – yet it can seem daunting to implement these complex systems, especially if it involves an overarching overhaul of existing point or legacy solutions. Taking a step-by-step approach can break this down into a more manageable process, while the resulting benefits have the potential to streamline operations, improve efficiency and add value.

Identifying a clear framework and creating an initial set of building blocks allow firms to add functionality and scale up over time, while still working towards a comprehensive end-to-end solution. This approach has the potential to provide material competitive advantage, for example by:

  • Understanding systems: By getting to grips with the firm’s entire trading system infrastructure, firms will have a deeper understanding of what their existing capabilities are, and where potential gaps may be, when compared with their corporate goals. Having such an understanding will enable the firm to be more strategic in its approach to its trading business.
  • Testing them adequately: Having a robust testing program will not only enable everyone to sleep better at night – it will provide a basic level of system hygiene that can then be built upon. Decisions about adding to the technology system infrastructure can be taken in a more informed way, with a greater level of comfort.
  • Using infrastructure performance as differentiator: Being able to show buy-side clients clear evidence of the strength of the internal trading systems can help win business.

Having the right approach to trading system testing means having a solution in place that will provide the basis for implementing best practices, which include:

  • Having an enterprise accessible view of deployment, management, results and reports.
  • Viewing real-time dashboards of testing progress.
  • Consolidating and viewing the entire enterprise testing deployment.
  • Storing and analyzing historical test results.
  • Ensuring the approach is based on principles of Model-Based Testing, Test-driven development, and continuous integration testing. Using an enterprise platform for dev-ops, and not just a desktop product for testers.

Although a robust testing mechanism takes work, firms without one face very real regulatory, operational and reputational risks if their trading system breaks down – while they may also find it harder to adapt to future regulatory demands and operational challenges. Rather than viewing it as an inconvenience, therefore, a better perspective is one of opportunity. In an increasingly competitive environment for financial services firms, the quality of operations is emerging as a differentiator – and a large component of that involves testing.

VeriFIX Enterprise by Itiviti helps to automate the costly and error-prone process of manually testing your trading system, and reduce dependencies on counterparty test environments. The industry standard for comprehensive FIX testing, it offers a sophisticated approach to validating the complete trading infrastructure, delivered to meet today’s complex enterprise view on testing.

Given the rapid pace of evolution in the financial services landscape, firms need to quickly adapt to a new paradigm when it comes to trading system testing, and take a more strategic approach. Testing needs to be part of strategy upfront – and solutions such as VeriFIX Enterprise can help prioritize and execute this pivotal requirement.

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