With March 2019 drawing ever closer, we find ourselves past the point of no return for preparing for a ‘hard’ Brexit.

While there is no blueprint for how to execute Brexit-driven change, Capco has developed a broad yet comprehensive four-step approach for planning and executing Brexit technology change testing that has delivered success in overcoming unique challenges. Our end-to-end approach is outlined below along with the major tests we have observed for institutions at each stage.

PHASE 1: MOBILISATION & READINESS ASSESSMENT

Essential key inputs to a successful test strategy include: finalising requirements, E2E test strategy draft, LOB test approach drafts and DR/Migration Strategy. We at Capco recommend the establishment of a command and control centre, an associated governance model, and a ‘test readiness checklist’ at this stage.

Challenges:

• Failure to engage external vendors and CCPs (etc.) early enough to secure test windows
• Securing sufficient bandwidth to manage and monitor the scope of testing

PHASE 2: TEST PREPARATION & PLANNING

In this phase, the end-to-end strategy and approach as well as governance of the test environment and data, should be 'workshopped' amongst key groups to standardise and finalise.

At this point, we helped identify high-level requirements that must be mapped to test cases and testing entry and exit requirements defined. Test plans should be centralised and a monitoring tool for test execution and reporting activated. ‘Smoke tests’ are to be performed on principal feeds and a defect and release management framework developed.

Challenges:

• Identifying the correct resources to create, own and execute the runbooks to cover migration, new business cutover and execute rehearsal activities with representation from stakeholders’ cross streams
• Identifying specific systems, processes, and market functions that are in scope for Brexit testing to define a scope of work that is comprehensive, representative of reality but manageable
• Availability of test environments and the accuracy of these environments in relation to the production/live environment
• Planning for external-facing interlocks and appropriate testing, such as for financial markets infrastructure, which is dependent on a limited testing window being made available
• Delays to agent bank account readiness, due to delayed licensing approval
• Ensuring the upload of all test cases and scripts in a centralised testing environment, to support traceability and increase ease of reporting
• Securing sufficient bandwidth in CTB/RTB teams to identify and create test cases for all potential migration and cutover scenarios.

PHASE 3: TEXT EXECUTION

Key inputs include test cases, scripts, plans and entry/exit signoff criteria. A central programme test management team to sign off testing statuses and reporting should be established with overall oversight and governance responsibilities, including management of cross workstream dependencies.

Capco has previously supported firms in producing matrices that measure traceability, as well as testing MI, reporting and evidencing to support test execution and report on results

Challenges:

• Securing a pool of testers with client-specific business/functional knowledge to expedite execution (delays are often experienced here)
• Accurate reporting of F2B tests where partially validated trades fail at later stages of a given booking model.

PHASE 4: DRESS REHEARSALS & ROLLBACK

Key inputs include runbooks by LOB, migration schedule, list of in-scope trades and roll back scenario list. By this phase, Capco will have supported users are to be set up on target and training arranged as required. Detailed go live plans are to be coordinated with workstream leads and migration scope and activities agreed with different business lines.

Challenges:

• Identifying owners to manage dress rehearsal planning and execution to select and test go live-controls
• Ensuring there is sufficient time planned to perform all testing prior to the end of F2B phase.

Whether a transition period materialises or not, there are significant and unique challenges for financial institutions across the UK and EU27 that must be addressed ahead of the Brexit deadline. Capco has already developed strong experience addressing these in addition to broader regulatory, audit, and internal commitments, and our comprehensive end-to-end approach to technology change enables us to be excellent partners for financial institutions embarking on this unprecedented journey.

Find out more about how Capco's Brexit Toolkit can help you be ready ahead of March 2019.