How To Test Your Software To Avoid Technical Glitches
Watch Wall Street &
Technology and Advanced Trading's on-demand video analysis of the SEC's
market technology roundtable:here.
The technical errors that have recently befallen Knight Capital, BATS and Nasdaq causing chaos to the markets are not the result of complexity or fragmented markets, but the result of basic technology 101 issues, SEC chairperson Mary Schapiro said today during the agency's market technology roundtable.
During the SEC discussion, Dr Nancy Leveson, professor of aeronautics and astronautics and engineering systems, MIT, argued that software errors will always happen. The financial industry, like the aviation industry, needs solutions beyond technology – which must include strong regulation. " Most industries have government agencies overseeing with an iron hand.
The aircraft industry knows people will stop flying if planes start falling out of the sky. You cannot build an unsinkable ship or unfailable software. If you engage in hubris and wishful thinking, you will have to suffer the consequences," Leveson said.
The technical errors that have recently befallen Knight Capital, BATS and Nasdaq causing chaos to the markets are not the result of complexity or fragmented markets, but the result of basic technology 101 issues, SEC chairperson Mary Schapiro said today during the agency's market technology roundtable.
During the SEC discussion, Dr Nancy Leveson, professor of aeronautics and astronautics and engineering systems, MIT, argued that software errors will always happen. The financial industry, like the aviation industry, needs solutions beyond technology – which must include strong regulation. " Most industries have government agencies overseeing with an iron hand.
The aircraft industry knows people will stop flying if planes start falling out of the sky. You cannot build an unsinkable ship or unfailable software. If you engage in hubris and wishful thinking, you will have to suffer the consequences," Leveson said.
Still, GETCO CTO
Jonathan Ross argued that in order to avoid technical glitches, firms
must follow several testing best practices: These include having
independently designed systems, he said.
"To the extent
possible, systems should be independent from other systems to limit the
potential for an error or failure to cascade to other systems," he said,
adding that any changes to systems must be small, incremental and
frequent to reduce the magnitude of any errors and make it easier to
mitigate the impact of such errors if they do occur.
Ross also suggested
using layered, redundant risk measures, with multiple, overlapping
levels of preventive or protective risk controls that each look at a
system independently.
GETCO has a formal
process for testing its software, Ross noted. This includes a testing
lab, testing protocols that developers follow, and change management
processes, he wrote in a statement for the SEC.
"Development and
testing should reinforce each other; continuous building and testing
gives developers a strong feedback loop," he said. In the development
cycle, common approaches to software testing firms should follow include
unit testing – or tests of discrete, generally small, specific and
functional, components of the system.
Best practices should
also include regression testing, or tests built specifically to address a
bug previously identified and to prevent the reintroduction of that bug
and integration testing, or system tests designed to test the
interaction of applications with each other or outside parties.
No comments:
Post a Comment