When fintechs grow into banks, expectations change. The systems behind each user interaction must now support traceability, evidence, and a level of reliability that can stand up to internal and external audits.
As fintechs evolve and transition into banking, the stakes rise significantly. Ad-hoc testing processes that may have worked in the past no longer meet the rigorous demands of the banking sector.
Until recently, much of the focus was on obtaining a license. But crossing into banking demands much more. Trust needs to be built. Compliance must be part of every interaction. And quality can no longer be an afterthought; it must be key in every software-driven interaction.
In 2023–24, FINTRAC issued 12 Notices of Violation of non-compliance to businesses for a total of $26,115,999.50. And regulatory scrutiny continues to intensify.
For instance, in Canada, in May 2024, FINTRAC fined Binance C$6 million for failing to register and report large crypto transactions—a reminder that operating outside of traditional banking doesn’t mean escaping accountability (Reuters). Around the same time, TD Bank reached a US$3 billion settlement in the U.S. for anti-money laundering failures (Reuters).
These cases reflect a broader reality: compliance failures, whether in fintech or banking, lead to massive consequences. And behind every regulatory breach, there’s often a lack of visibility, traceability, or process integrity—gaps that robust testing and quality practices are meant to close.
For fintechs, this highlights the importance of regulatory readiness—not just as a legal requirement but as a strategic advantage. But aligning with these expectations isn’t only about policies and frameworks; it starts with how software is built, tested, and released.
Here, we outline the adjustments fintechs must make in their testing and engineering practices to navigate the regulatory complexity of banking and scale with confidence and resilience.
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Understanding the Compliance Landscape
Compliance shapes how software is designed, built, tested, released, and maintained. As fintechs grow and move closer to banking, aligning with frameworks from OSFI, FINTRAC, and federal regulations like PIPEDA and the Bank Act becomes part of the foundation.
Meeting those expectations takes more than checklists. It means rethinking how teams operate, connecting engineering maturity, risk awareness, and quality assurance from the ground up.
Key Compliance Areas to Address
- Data Protection: Under PIPEDA, particularly Schedule 1, Principles 4.3 (Consent) and 4.7 (Safeguards), financial institutions must manage how personal information is collected, stored, accessed, and deleted. QA teams play a key role in verifying consent flows, encryption strategies, and secure data retention and removal.
- Anti-Money Laundering (AML): As defined by FINTRAC under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), Sections 6 and 7, institutions must accurately capture, analyze, and retain transaction data. Testing must confirm the correct handling of high-volume financial transactions, flag suspicious activity, and maintain record completeness.
- Consumer Protection: The Bank Act, especially Part XII.2, emphasizes clarity in disclosures, fairness in service delivery, and accessibility of financial product information. Rigorous functional, usability, and accessibility testing enables interfaces to comply with both legal and UX standards.
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Enhancing the Testing Process
Transitioning from ad hoc testing to Formal Testing
Many fintech teams prioritize speed, working with agile, fast-moving development cycles. That flexibility often drives innovation—but it’s not enough when the stakes include regulatory audits and long-term trust. In banking, testing must deliver more than quick feedback. It needs to support predictability, accountability, and traceability across the software lifecycle.
What Maturity Requires
- Formal QA Governance: OSFI Guideline E-13, Section 4.2.3, highlights the need for structured testing programs aligned with institutional risk profiles. This includes traceability matrices, independent testing, and coverage metrics.
- End-to-End Quality Engineering: Guideline B-13, Principles 2 & 4, emphasizes building quality from the start. Automating validations, integrating security checks early, and testing failure scenarios and system behavior under stress are critical.
- Change Management & Release Controls: Under B-13, Principle 5, all changes must be tested, approved, and auditable. Testing processes should include rollback validation, version control, and pre-release sign-off.
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Evidence of Testing: A Regulatory Requirement
Testing isn’t complete without documentation. For regulators, it’s not only the outcomes that matter, but also the ability to demonstrate how each result was achieved—and under what controls.
Certain evidences are expected across critical testing activities:
- Test Plans & Test Cases:
Designed to reflect both operational realities and regulatory risks. - Execution Logs & Defect Reports:
Demonstrating coverage and response. - Audit Trails:
Confirming traceability of every change impacting production systems.
These expectations align with OSFI’s Risk-Based Supervisory Framework (RBSF) and Section 71(1) of the PCMLTFA, which set clear requirements for record-keeping, transparency, and accountability.
Building a Mature Software Engineering Process
From QA to a Culture of Quality
In regulated environments, quality can’t belong to a single team; compliance depends on cross-functional alignment. Developers, testers, product managers, and security teams all contribute to system integrity. That shared responsibility and the accompanying cultural shift are what enable bank-grade engineering to take root—and scale.
Embedding Testing in the SDLC
Testing has to be part of the process from the start (shift left testing). It needs to evolve with the system, not chase it.
Best practices include:
- Define a Testing Maturity roadmap to evolve with the corporate vision, market and technology trends.
- Agile methodologies combined with compliance checkpoints.
- Automated regression and security testing at every stage.
- Real-time observability and incident analysis tools.
- AI agents embedded in SDLC workflows to enhance efficiency, accuracy, and continuous improvement speed.
These align with OSFI Guideline B-13, Principles 6 and 7, which outline expectations for resilient operations and structured incident response.
Continuous Improvement
OSFI’s Supervisory Framework sets the expectation that institutions will continually refine their risk posture. This includes reviewing:
- Test effectiveness metrics.
- Time to resolve critical defects.
- Release rollback frequency.
- Post-incident testing procedures.
Compliance Framework Reference Table
Regulatory frameworks can feel abstract—until they touch code, workflows, and release cycles.
In the table below, we map key compliance areas to the specific regulations and guidelines that shape how testing—and broader quality practices—need to operate. It’s not exhaustive, but it offers a practical starting point for aligning our engineering practices with regulatory expectations.
| Compliance Area | Regulation / Guideline | Section / Principle | Testing and QA Implications |
| Data Protection | PIPEDA | Schedule 1 – Principles 4.3 & 4.7 | Consent flow testing, encryption verification, access control, and secure data deletion |
| Anti-Money Laundering | PCMLTFA (FINTRAC) | Sections 6 & 7 | Transaction testing, suspicious pattern detection, and audit log validation |
| Consumer Protection | Bank Act S.C. 1991, c. 46 | Part XII.2 | Testing of clarity, accessibility, and fairness in customer-facing digital services |
| Operational Risk Mgmt. | OSFI Guideline E-13 | Sections 4.2.3 and 4.2.4 | QA governance, risk-based test plans, and documentation for compliance |
| Technology/Cyber Risk | OSFI Guideline B-13 | Principles 2, 4, 5, 6, 7 | Shift-left testing, automation, secure deployments, traceable defect resolution |
| Regulatory Supervision | OSFI Risk-Based Supervisory Framework | System-wide | Evidence-driven QA, audit readiness, alignment of testing with institutional risk profile |
| Record Retention | FINTRAC Regulations | Section 71(1) | Validation of data logging, retention of test evidence, and transactional integrity for 5+ years |
Closing Thought: Maturity Enables Compliance
The shift from fintech to bank is not only regulatory—it is technical, procedural, and cultural. Achieving compliance requires mature software engineering, robust quality assurance, and a culture that sees quality as continuous.
By aligning with OSFI, FINTRAC, and PIPEDA, fintechs can scale into the banking sector with the confidence, accountability, and resilience required, while preserving the flexibility that drives innovation.
How Abstracta Can Help
We partner with financial institutions to drive reliable, compliant, and scalable software initiatives. With expertise in testing banking platforms – including banking Core- omnichannel services, regulatory frameworks, industry standards, and financial terminology, we support teams across business and technical roles—enabling clarity, speed, and alignment at every stage.
Our approach is hands-on and collaborative. From automation and audit readiness to risk-based QA strategies and the implementation of robust, bank-grade testing processes, we tailor our services to your systems and goals.
We adapt quickly to shifting market demands and anticipate your needs. By partnering with us, you’ll experience the confidence of having your most complex projects driven forward with innovative thinking.
Who We Are
With over 16 years of experience and a global presence, Abstracta is a leading technology solutions company with offices in the United States, Chile, Colombia, and Uruguay. We specialize in AI-driven solutions, and end-to-end software testing services.
Our expertise spans across industries. We believe that actively bonding ties propels us further and helps us enhance our clients’ software. That’s why we’ve built robust partnerships with industry leaders, Microsoft, Datadog, Tricentis, Perforce BlazeMeter, and Saucelabs to provide the latest in cutting-edge technology.
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