Introduction

A single outage in a banking app can cost millions. 

In early 2025, Barclays experienced a major mobile banking outage, with estimated compensation costs ranging from £5 million to £7.5 million. This shows how disruptions can lead to significant financial and trust consequences.

As more customers shift to mobile-first banking, expectations for speed, uptime, and security continue to rise. Every tap, login, and transaction must work as expected across devices, operating systems, and network conditions.

To meet these demands while staying compliant with strict data privacy regulations, banks are moving toward a more controlled setup: on-premises device labs.

These secure, in-house setups are quickly becoming the preferred approach for testing apps in environments banks can fully manage and trust.

In this article, we will discuss why on-premises labs, including air-gapped testing environments, are gaining traction and how they help banks deliver reliable, high-performance apps under real-world conditions.

Also Read - How to Achieve Quality Assurance Excellence with Air-gapped Testing Labs

What Are On-Prem Device Labs?

On-prem device labs are dedicated, in-house setups where banks test their mobile and web applications on real devices under controlled conditions. These labs typically include a range of smartphones, tablets, and other endpoints, all connected to the bank’s internal network.

Unlike cloud-based or outsourced testing environments, everything stays within the organization’s infrastructure—devices, data, test logs, and network activity. This means banks retain complete control over how test data is handled and how devices are configured and accessed.

A typical on-prem lab includes:

• Physical racks or enclosures housing real devices
• Secure, internal connectivity
• Device management and automation tools
• Access restrictions for compliance and audit readiness

The core appeal behind this setup is simple: full visibility, zero third-party exposure, and the ability to replicate real-world usage in a secure and consistent environment. 

Why Banks Are Adopting On-Prem Device Labs

Banks are adopting on-prem device labs to meet rising demands for security, speed, and control. Here’s why more banks are investing in this approach:

Strengthened Security and Data Privacy

For banks, data security is a non-negotiable requirement. On-prem device labs keep sensitive customer data inside the bank’s infrastructure. Unlike cloud testing, where data moves across external networks, this setup keeps everything behind the firewall. It reduces exposure, simplifies compliance with regulations like GDPR and PCI-DSS, and provides banks with full visibility into how data is handled, ensuring nothing gets overlooked.  

Faster Testing and App Updates

With on-premises device labs, teams can test new features, fix bugs, and push updates more quickly. There's no waiting on cloud queues, time zones, or third-party teams. Everything runs in-house, which cuts delays and helps keep the app stable and secure.

Tailored Testing for Real Customers

Banks don’t just test for the latest phones—they test for what their customers use. On-prem labs make that possible. If a large segment uses older Android models or a specific network, teams can include those setups in the lab and test directly. That level of control is challenging to replicate with cloud testing, where device availability may not accurately reflect real-world usage.

Cost Efficiency Over Time

While setting up and maintaining an on-prem device lab involves an upfront investment in hardware, software, and dedicated IT resources, the long-term cost savings can be significant. Outsourced testing services often charge per device or test cycle, leading to ongoing costs that can quickly add up. Owning and managing their labs allows banks to streamline testing and reduce their reliance on third-party services. Over time, this can result in substantial savings and increased control over testing costs.

Key Considerations for Setting Up On-Prem Device Labs

Banks need to consider several factors to ensure that the lab aligns with their needs and supports ongoing app testing and development.

Initial Investment in Hardware and Infrastructure

The first step in setting up an on-prem device lab is the initial investment in hardware and infrastructure. This includes purchasing the devices, setting up physical racks or enclosures, and ensuring secure, high-performance network connectivity. 

Integration with Existing DevOps Pipelines

To streamline testing, on-prem device labs must integrate smoothly with existing DevOps pipelines. This allows developers to run tests continuously, triggering automated tests and incorporating results into the build process. This integration can improve workflow efficiency and reduce bottlenecks in the development cycle.

Device Compatibility and Variety

When setting up an on-prem device lab, banks must include a wide range of devices and operating systems commonly used by their customers. This includes various screen sizes, OS versions, and performance capabilities for comprehensive testing. Regularly updating the lab with new devices based on market trends allows banks to test apps under real-world conditions and maintain consistent performance for all users.

Scalability for Future Needs

As mobile technology evolves, banks must plan for the future by making their on-prem device labs adaptable to new devices and operating systems. This includes setting up modular configurations to easily add new devices and expanding server infrastructure to accommodate more testing instances as demand rises. This approach enables the lab to grow in tandem with technological advancements and continue to meet evolving testing needs.

HeadSpin’s On-Prem Device Lab Solutions for Banks

Banks and financial institutions require full control over data and testing environments to meet strict security and compliance standards. HeadSpin addresses this need with its on-prem device lab powered by the PBox appliance, enabling secure testing on real devices while keeping all data within the bank’s internal network.

HeadSpin’s on-prem PBox appliance empowers banks to meet these standards. This solution provides a secure, internal device lab for testing on real smartphones, tablets, and payment terminals in a temperature-controlled, RF-enabled environment. By keeping all data within the bank’s network, the PBox enables real-world testing without compromising security.

Also Learn - Everything About HeadSpin PBox

HeadSpin’s On-Premise Deployment Options for BFSI: Cloud-Connected vs. Air-Gapped

When it comes to deploying HeadSpin within highly regulated environments like Banking, Financial Services, and Insurance (BFSI), security, data privacy, and compliance are paramount. HeadSpin offers two on-premise deployment options tailored to meet distinct security and operational needs:

1. Cloud-Connected (VPC) Deployment

• What it is: The unified controller—managing the HeadSpin UI and test data—is hosted in a Virtual Private Cloud (VPC) environment using HeadSpin’s cloud infrastructure.
  
• Use Case: Ideal for financial institutions needing secure, scalable access to HeadSpin features while maintaining connectivity to cloud resources.
  
• When to choose: When teams require remote access and integration with CI/CD pipelines.
  

2. Air-Gapped Deployment

• What it is: The HeadSpin controller is deployed entirely on a physical server within customer premises, with no internet connectivity.
  
• Use Case: Suited for banks and insurers with the highest levels of security and compliance requirements—where data must never leave the organization.
  
• When to choose: When operating in highly sensitive environments (e.g., fraud detection systems, core banking apps).

HeadSpin prioritizes data privacy by using only synthetic test data, eliminating the risk of storing personal or sensitive information. This approach helps banks maintain compliance while leveraging cutting-edge testing to ensure app reliability.

Read - Why Compliance Testing is Important in Digital Transformation

Final Thoughts

As customer expectations grow and regulatory pressure increases, the margin for error keeps shrinking. For BFSI organizations, data security remains a critical priority. Leveraging air-gapped, immutable repositories ensures robust protection for sensitive financial data against potential threats.

HeadSpin offers on-prem deployment with an air-gapped setup—ideal for BFSI environments where data privacy and compliance are critical. It lets teams manage devices internally, replicate real-world conditions, and run tests securely without exposing systems to the internet.

Secure, in-house testing on the global device infrastructure with PBox. See it in Action.