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WHITE PAPERUser Acceptance Testing (UAT) Challenges in Cards Migration ProjectsLarge scale migrations and conversions across portfolios and applications are on the rise in the banking and financial services sector. Given the complexities involved in the management of such migration, User Acceptance Testing (UAT) poses daunting challenges.

With the UAT experience across large card migration projects (including the largest cards migration in Europe to date) and the aggregate card portfolio of these projects being of the order of 25 million, this paper aims to list the typical challenges encountered.

Card portfolio migrations/ conversions are necessitated by: -

• Mergers and acquisitions of banks• Consolidation and centralization of card processing activities of

multi-country banks• Upgrades of the existing platform or product version• Replacement of legacy cards applications with current technology

Contrasting Trends

Trends in the Middle East and APAC region

Product and Processing services are not mutually exclusive. With intense competition to gain a larger market share there is migratory movement in both directions; from In-house processing to Outsourcing and vice versa

Trends in USA and Europe

Major general purpose card issuers in the US including Citigroup, Bank of America, American Express, Discover, US Bank and HSBC are wedded to in-house processing. Now, other major bankcard issuers, with the notable exception of ‘Capital One’, who relied on outsourcing, are thinking of moving back to in-house processing, directly or in phases.

In contrast, in Euro-land, where most card processing has been performed in-house or by bank-owned cooperatives, the trend is decidedly in the opposite direction; outsourcing to commercial third party card processors.

In-house processingVs

Outsourcing to third party processors

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Challenges in UAT:

Program specific challenges and risks need to be critically assessed and diligently addressed at the time of formulating the UAT Strategy.

The challenges encountered can be broadly categorized under three heads, each corresponding to the three phases of UAT

1. Scoping2. Test Planning3. Test Execution

• Key challenges in UAT Planning relate to batch requirements, multiple teams/ environments and parameter configurations

1. Challenges in Scoping

a. Changing requirements and solutions: The typical duration for a medium-to-large scale migration project is around 12 months. Considering the competitive environment and the rapid technological advances it would become necessary to address a plethora of changes even during the budgeted 12-month. Requirements and solutions cannot be cast in stone.

b. Insufficient documentation: Changes to legacy applications are seldom clearly documented. Even what documentation exists is not easily locatable and would have to be ferreted out of current business users. These constraints become critical when ‘like for like’ functionality is expected to be delivered on the ‘to be’ application.

c. Non-finalization of business process specs: The business processes adopted by user groups are

seldom finalized in time and hence present a serious challenge to completing the UAT in time

2. Challenges in Planning

a. Multiple Batch Run Requirements: Cards’ testing is a batch process that is dependent on functionalities such as delinquency collection queues, reminder letters and direct debits involving specific run requirements. Conversion of purchase transactions into installment transactions add to the requirements. UAT planning is thus challenged by numerous such batch process requirements in a limited iteration window of 4-5 weeks

b. Multiple Test Teams and Environments: Migration of card management applications entails changes in upstream and downstream processes and interfaces within the enterprise. Owing to specific requirements, the UAT would have to be carried out in specific test environments (Examples: data-warehouse, marketing promotions, internet banking, and IVR). While some of the functionalities would require date bumping (to advance the system dates), other interfaces could have restrictions in advancing the system dates. UAT planning is challenging where multiple test teams and environments are involved.

c. Baseline Parameter Values Unavailable: Most card management applications are parameter driven. However, the parameter configuration intended for the migrated portfolio is typically not finalized during the UAT planning phase.

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3. Challenges in Execution

It may not be feasible to mitigate all risks during the scoping and planning phases. Some of the critical challenges thus move into the execution phase. a. Shared Test Environment: UAT involves multiple test teams and perhaps multiple test environments for

end-to-end execution of certain functionalities and business processes. Coordination across a shared test environment is challenging.

b. Quality of Migrated (Scrambled) Data: Business processes are expected to work without any snags viz-a-viz new and migrated accounts. Towards this all migrated (scrambled) data would have to be diligently verified lest they cause bottlenecks during the UAT execution phase as the data-migration testing and functional UAT are done in parallel.

c. Availability of all Interfaces: As the data flows and business processes need to be tested end to end during UAT, availability of all interfaces during the iteration timelines become important.

d. Incorrect Setup of Parameter Configuration: The parameter configuration values may not be finalized and available during UAT planning phase. Incorrect setup of parameter configuration results in avoidable issues during the UAT execution phase.

e. Tracking of Issues and Regression Impact across Multiple Releases: Often the functionalities required for the migration are delivered in a staggered manner. Thus UAT execution spanning multiple releases or code drops poses challenges in tracking issues and related regression impact. Slippages in delivery of functionalities further reduce the time available for testing; known as the testing window.

f. Large Number of Open Defects: A large number of open defects would upset test execution progress. This could pose serious challenge during UAT that could disrupt the go-live dates.

During data migration

• Validation of all migrated customer accounts, demographic details, embosser details, authorization data, transaction data and merchant details as per conversion specifications

• Validation of all control records/parameters as per business requirements and conversion specifications• Validation of all conversion specific reports• Reconciliation of financial details, discrepancies and exceptions• Data loads/refresh in surround systems due to changes in numbering structure as part of migration• Assurance that all day-to-day business functions on migrated data meet expectations

Conclusion: While specific risks associated with a specific project are mitigated on a case-by-case basis, awareness of the typical challenges that could be expected could be extremely helpful in preparing a comprehensive test strategy.

Factors critical to the success of UAT

During functional Testing:

• Meeting business requirements defined by the client• Customization on the existing platform• Implementation of all current end-to-end operational procedures and business processes • Management of all handoffs and data-flow between the card application and interfaces as per specifications (online and batch)• Management of In-house systems• Management of surround systems and interfaces • Management of third parties• Production of collateral outputs such as letters, statements, card mailers, PIN mailers and, plastics as expected• Execution of day-to-day business functions covering both migrated and new card data without any regression impact on existing functionalities

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References: Card Portfolio Migration details of some of the leading Financial Institutions have been provided below

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Financial Institution Card/Portfolio Migration details Source

Lloyds TSB Conversion to First Data VisionPLUS http://www.finextra.com/news/announcement.aspx?pressreleaseid=12693

Tesco Bank Transfer of 2.4 million cards to TSYS TS2 platform

http://www.finextra.com/news/announcement.aspx?pressreleaseid=34865

DnB NOR Bank Migration of 2.2 million MasterCards followed by phased migration of AMEX and 0.7 million Visa cards to in house TSYS PRIME

http://us.generation-nt.com/tsys-successfully-completes-dnb-nor-kort-conversion-press-2269771.html

Co-operative Financial Services CFS)

Migration of 1.7 million debit cards and one million credit card portfolios on to First Data’s FirstVision

http://www.firstdata.com/en_us/about-first-data/media/press-releases/05_20_09_2

Vanquis Bank Migration of the 400,000 cards portfolio on to First Data’s FirstVision

http://www.firstdata.com/en_us/about-first-data/media/press-releases/05_20_09_3

JP Morgan Chase Deconversion of consumer card portfolio and in house processing on the technology platform licensed from TSYS

http://www.paymentsnews.com/2008/12/chase-to-take-w.html

GE Capital The company acquired a private label credit card portfolio and needed to complete the conversion of merchants and cardholder accounts to itsown system

http://www.floorbiz.com/BizNews/NPViewArticle.asp?ArticleID=6069

Advanzia Bank Conversion of portfolio from TSYS' Primeplatform to its TS2® processing platform(1.5 million MasterCard records)

http://www.finextra.com/news/announcement.aspx?pressreleaseid=38915