1.1.1 The Product Definition Facility

Defining services as Products

A Product is a specific service, or scheme, that you offer your customers. A Loans product is a specific Loan scheme that is offered to customers. For example, a bank may offer shortterm corporate loans to software development companies. This scheme can be defined as a product in Oracle Lending.

When setting up the module, the bank can define the various loan schemes that it offers as products. For each product, it can also define Attributes, or in other words, the terms and conditions. When a user at the bank actually processes a loan, it can be associated with a product. The loan acquires the terms defined for the product that it involves. The bank, however, can allow a user to change the inherited attributes of a loan, while processing, to suit a special customer.

The advantage of defining a product

When defining a scheme as a product, the bank can specify the following details:

• Tenor, rollover, and interest preferences
• The type of interest that is applicable
• The minimum, maximum, and standard rates applicable
• Penalty interest and grace days (for loans)
• The standards schedules applicable
• The ledgers to which the accounting entries must be posted (at different events such as booking, amendment, rollover, and so on.)
• The advices and reminders that have to be provided to customers at different events

The product is defined only once. Therefore, you need not specify the basic details, every time a loan is entered into Oracle Lending. This feature drastically reduces processing time, thus allowing a bank to focus on and take advantage of, the opportunities in the market.