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Why Test Automation is Key to the Expansion of Mobile Money Services

Mobile money services are changing the way we manage our funds.

In 2020, MTN Ghana generated more revenue from mobile money transactions than any of the leading Nigerian banks did on their digital transactions for the same period (as reported by Mobile Money Africa). Let that sink in for a moment. To help put that into context, Ghana has an estimated population of 30 million, compared to Nigeria’s 210 million. Also, Ghana has a GDP of $65.6 billion, whilst Nigeria’s GDP is $397.3 billion.

In March 2021, The Fintech Times reported that almost two billion adults globally are unbanked. This translates to about 66% of adults in Africa who do not have access to traditional banking methods. The term unbanked, however, does not mean that one doesn’t have access to financial services. Over the past decade, several telecoms operators have revolutionised how consumers interact with their finances. This now pits mobile phone operators as direct competitors to many traditional financial institutions on the continent.

According to a July 2021 report on Harvard Blogs entitled, "Are mobile operators the next fintech start-ups?" several Mobile Network Operators (MNOs) in Africa, including Safaricom and Vodacom, have either recently launched super apps or are in the process of doing so. These apps will enable closer interaction between users and a plethora of mobile financial services that include:

  • a varied selection of e-commerce services
  • banking and insurance services
  • streamlining of utility payments
  • ticketing systems for public transportation, cinemas, and concerts
  • connectivity between apps and IoT devices

And digging even deeper, a recent report from Swedish telecommunications company Ericsson stipulated that the “Covid-19 pandemic has accelerated the use of mobile financial services. About half of all consumers in the region [Sub-Saharan Africa] currently use mobile financial services.”.

Mobile money services have exploded in a big way in Africa (and indeed globally) since their inception in the 2000s. According to the GSMA’s State of the Industry Report on Mobile Money 2021, the figures regarding global growth in the digital payment space were expected to reach $4.4 trillion (USD) in 2020 with a 17% compound annual growth rate (CAGR) until 2024.

Kiosk in Kenya selling mobile money services.

How should banks respond to mobile money?

The unbanked, especially in developing nations, finally have access to facilities that not even two decades ago, would have been unthinkable for them. M-PESA (arguably Africa’s largest ‘fintech’ company), blockchain technologies, and other online banks are disrupting the marketplace to address this disparity. By adapting to cloud-based systems and developing software and apps faster than the banks of yesteryear in a more agile way, these new OTT players are leaner, meaner, and quicker. There is an urgent need, therefore, for the legacy banking institutions to adapt to the digital ecosystem, adopt newer agile practices in software development and testing to keep up with the current trends, and put the right infrastructure and frameworks in place to scale up and meet the consumers’ demands.

Man on mobile phone on African street.

How we demonstrated the benefits that test automation delivers for mobile money platforms and providers.

At SLR Dynamics we have seen first-hand the challenge faced by both legacy and digital-native companies. We worked with one of Africa’s leading telecommunications companies to set in place from the start test automation solutions that would enable them to run thousands of test cases in a day. The outcome enables them to detect, fix, and eliminate bugs in the platform in days, rather than weeks if testing manually.

You can delve into the data of our case study here but a few points to note are:

  • Our comprehensive test automation strategy saves them £10 million each year.
  • The framework can run hundreds of test cases in an hour.
  • We developed a solution that is robust and adaptable, working across multiple markets without needing to change the underlying framework.
  • Our test automation strategy has enabled them to reduce time to market in five countries across the continent and helped them grow their subscriber base to 50 million users as of September 2021.

Test strategy needs to be an integral part of development strategy from day one. In the last couple of years, we have seen traditional financial institutions begin to learn about DevOps and DevSecOps with a view to implementing these practices as part of adopting agile methodologies. The problem we are seeing though is that not enough of the companies are successful in adopting agile development fast enough. This could be down to a number of reasons:

  • Not enough team members at these companies understand the importance of test automation as a central pillar of their agile development. In short, it’s not part of their culture and their ‘method’ has been ‘working’ for a while now. It takes time to bring all key stakeholders on board.
  • There is a worry that test automation might replace testers and their expertise in finding faults and errors. In reality, test automation as part of an overall testing approach can help identify problems earlier in the test and release cycle, and often the developers cannot fix as quickly as faults are spotted, leading to a backlog of errors that keep piling on each other.
  • Some companies tend to be reluctant to invest in the right tools and level of expert test automation developers to ensure that test automation is carried out effectively and efficiently.

A laptop with analytical software on screen.

What does this mean for the future of financial services?

There are an estimated 372 million active mobile money accounts worldwide. Approximately 200 million of those accounts are in Africa alone. Each day, mobile money services around the globe process over $1 billion (USD) on their platforms. With the expected growth over the next few years, legacy financial institutions will need to assess how they will retain their share of the pie and adopt a more flexible approach to their customers. Whether you are looking to re-emerge as a fintech company in the developed or developing part of the world, the approach needs to be the same. Greater levels of automation make you more competitive, more productive, able to respond faster to changes in the market and get those new products and services to market faster, with less risk, more reward.

The bottom line is that to conceptualise, develop and grow mobile financial services, test automation should be a part of your test strategy from day one. It enables faster delivery times, reduces errors, and saves you money.

Article research and sources:

Africa CAN » Are Mobile Operators the next Fintech Startups? (harvard.edu)

MTN Ghana’s MobileMoney revenue exceeds Nigeria’s biggest banks by far - Report - Mobile Money Africa

Mobile financial services in Africa: Winning the battle for the customer | McKinsey

How Mobile Money Accounts Can Transform Africa - The Borgen Project

Future of Banking: Mobile Money Services; Africa`s giant strides uncovered (thebftonline.com)

Ericsson report - Sub Saharan Africa mobile financial services

How to Bank The Unbanked: Global Findex Results | The Fintech Times

GSMA_State-of-the-Industry-Report-on-Mobile-Money-2021_Summary.pdf

Nimi Manyo-Plange/Jeanette Shepherd | November 1, 2021

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