How Quality Engineering Empowers Banks To Cut Costs While Driving Innovation

As banks and financial institutions face rising competition, regulatory demands, and evolving customer expectations, the focus on digital transformation has become paramount. Yet, achieving this transformation often demands significant investment—a challenge for organisations looking to reduce costs while modernising their systems.

This is where Quality Engineering (QE) plays a pivotal role, offering banks a pathway to reduce costs in the short term while preparing for long-term growth, innovation, and resilience. In this article, we’ll explore how QE can support the ‘save-to-transform’ approach, enabling banks to cut costs while optimising their digital capabilities.

The Cost of Legacy Infrastructure

Many traditional banks are still burdened by outdated IT infrastructures that are costly to maintain and limit agility. As UK Finance points out, this legacy technology restricts innovation, impedes seamless integration with modern solutions, and hampers overall efficiency. Updating these legacy systems is essential for banks aiming to keep pace with digital-first neobanks, which are attracting customers with faster, more flexible digital experiences. However, the upfront cost of modernisation can be prohibitive, especially in a tight economic climate where banks are keen to manage costs closely.

A recent Deloitte report revealed that 84% of UK banks are likely to pursue cost reduction initiatives within the next two years, yet many struggle to meet their cost savings targets. The challenge is twofold: how can banks drive down operational expenses without hindering their ability to transform and compete? Here, QE emerges as a strategic enabler, providing efficiency gains and process optimisation that drive down costs while laying a solid foundation for future growth.

 Reducing Operational Costs with Quality Engineering

QE helps banks cut costs by automating testing and quality assurance processes, reducing the need for resource-intensive, manual work. By integrating Quality Engineering from the beginning of the development cycle, banks can identify and address issues before they impact customers or require costly fixes. This proactive approach helps minimise the risk of operational failures, which McKinsey reports cost organisations more than $1 million per incident for over 60% of cases. Avoiding these failures not only protects the bank's bottom line but also enhances its reputation for reliability—an increasingly critical factor in a digital-first environment.

Furthermore, QE-driven automation and continuous testing allow banks to deliver changes faster and more accurately, reducing time-to-market for new services and features. With digital transformation as a top strategic priority for 77% of banks, according to Deloitte, the ability to accelerate change without compromising quality is an invaluable advantage. Automation in QE also significantly reduces regression testing costs, which is essential as banks introduce new functionalities and navigate frequent regulatory changes. 

Ensuring Compliance While Managing Costs

Banks operate in one of the most heavily regulated environments, with compliance costs accounting for a significant portion of operational budgets. With mandates like Anti-Money Laundering (AML), General Data Protection Regulation (GDPR), and the upcoming ISO 20022 and DORA regulations, ensuring compliance is both a costly and necessary endeavour. Traditionally, compliance processes are labour-intensive, relying on extensive manual reviews to ensure regulatory alignment. QE introduces automation to these processes, reducing the resource load and helping institutions maintain compliance without the high associated costs.

 For instance, automated testing frameworks within QE can streamline the testing of complex regulations, creating reusable scripts that allow for faster testing of new regulatory requirements. This is especially relevant as the Payment Systems Regulator (PSR) introduces new measures, such as APP fraud reimbursements, which will further increase compliance demands on banks. By integrating QE, banks can reduce the cost of compliance and ensure a robust, adaptable framework that supports future regulatory needs.

 Enhancing Resilience and Reducing Risk

Quality Engineering is not only about efficiency; it also strengthens resilience, a factor that’s vital for banks facing the risks of cyber threats, fraud, and outages. As the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) increasingly emphasise operational resilience, banks are being held accountable for maintaining uninterrupted services and secure customer interactions.

QE enables banks to identify system vulnerabilities early, providing the necessary testing and monitoring to ensure that digital services remain operational and secure. By embedding resilience into the systems through rigorous Quality Assurance, banks can significantly reduce the frequency of outages and the impact of cyberattacks, which come with heavy financial and reputational costs. In fact, global banks are currently losing 1 in 5 of their customers due to poor customer experience
(10x Banking), highlighting the direct impact customer service has on retention and revenues​. By prioritising resilience through QE, banks not only reduce risk but also protect their customer base and reputation.

Future-Proofing Through Automation and Scalability

The ‘save-to-transform’ strategy is not solely about cutting costs; it’s about using those savings to drive meaningful change that supports long-term growth. With an effective QE framework, banks can build a future-ready foundation that supports scalability, adaptability, and sustained digital transformation. Quality Engineering allows banks to create automated processes that not only meet current needs but also prepare them to accommodate future developments in technology and regulation.

With mobile banking on the rise—digital-only accounts in the UK, for instance, grew from 24% in 2023 to 36% in 2024 (UK Finance)—it’s clear that customers are increasingly expecting seamless, secure digital interactions. QE supports this growth by enabling continuous integration and continuous delivery (CI/CD) pipelines, ensuring that any future changes can be implemented smoothly without disrupting existing services.

 In addition to supporting mobile and digital growth, QE also reduces the need for additional hires or resources as new regulatory and market requirements emerge. By establishing a scalable, automated platform, banks can reduce reliance on temporary, resource-intensive projects and focus on strategic initiatives that drive competitive advantage and customer satisfaction.

A ‘Save-to-Transform’ Mindset for the Future

Quality Engineering is more than a mere cost cutting efficiency exercise—it’s a strategic investment in the future of banking. In a ‘save-to-transform’ model, the efficiency and resilience gains from QE can be reinvested in growth initiatives, enabling banks to adapt and thrive in a rapidly changing landscape. With neobanks like Monzo and Revolut gaining ground, traditional banks must make the most of every opportunity to innovate, and a robust QE approach provides the foundation for this innovation.

The path to transformation requires striking a balance between managing today’s costs and investing in tomorrow’s capabilities. Through QE, banks can address regulatory requirements, enhance operational resilience, and optimise costs—all while positioning themselves to embrace the next wave of digital advancement. By leveraging Quality Engineering, banks can successfully execute a ‘save-to-transform’ strategy that not only cuts operating costs but also builds a platform for sustainable growth and competitive advantage.

Can we help you?

At Roq, we have a proven track record of helping financial institutions streamline their Quality Engineering practices and deliver cost reductions through seamless digital transformation. We led the UK’s largest ISO 20022 programme and supported a major high street bank in delivering a core platform transformation—each project executed smoothly, on time, and without disruption to business as usual.

If your organisation is ready to embrace a more strategic, future-focused approach to Quality Engineering, contact us here to discuss how we can support your ‘save-to-transform’ journey, or reach out via ask@roq.co.uk.