Financial services companies should test early and often

When going through the development process for a new product or service, financial services companies should test both early and often, UL Transaction Security’s senior sales executive Katherine McClure said.

Originally known for fire safety and home security, UL Transaction Security has expanded their footprint into digital safety and security for the entire payments ecosystem over the last decade, Ms. McClure said.

Katherine McClure

A key focus area for them is providing testing tools such as a web-based host test tool used by a card issuer, acquirer or brand that can be used to simulate a transaction, she said. Such tools are best employed early and often through the design phase.

“People often think testing comes at the end, but if you test as you go you save so much time and money,” Ms. McClure explained. “So we try to get earlier in that development cycle. We try and incorporate testing earlier in the design phase because if you catch problems in the implementation phase instead of the design phase they’re ten times harder to correct.”

It’s become an easier sell to convince companies of the merits of earlier testing, Ms. McClure said. Some products escape into the market instead of being released, meaning they haven’t undergone proper testing. Faults are revealed in the media and the company at fault sees damage to both their finances and reputation. Given the number of choices available to consumers, there is no reason for them to be loyal to a product with unnecessary friction and headaches.

Such friction is what draws entrepreneurs into the space, where they find both opportunity and toil, Ms. McClure said.

“Payments are hard, people don’t realize that until they get into it. One of the things I’ve always said about innovation in any industry is find something where it’s not a beautiful experience and if you can make it a beautiful experience there’s your advantage. People love to shop but hate to buy.”

When anticipating coming industry needs, Ms. McClure said the best starting point is to envision the entire process from the consumer’s perspective. Working with major industry players, UL identifies areas in need of innovation and coming opportunities that will benefit from their services.

A clear example is the Internet of Things (IoT) and the billions of connected devices coming our way.

“Each one of these becomes a commerce opportunity,” Ms. McClure explained.

IoT devices will hasten the invisibility of payments to the end user and highlight abandonment-inducing processes such as filling out the same form at every new online merchant a consumer wants to shop with. Soon your thermostat will pay your heating bill, and your car your next drive-through order.

But in order for that friction-free experience to happen, plenty of work has to be completed on the back end, including making sure you confirm the identity of the device user and can confirm they are authorized to transact with it, Ms. McClure said.

“Every time you make something more transparent to the consumer, it’s way more complex on the other side. You have to balance security, you have to balance authentication. That’s where UL comes into play. You have to test that.”

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