2.3.2 Define Products

You can use the Product Definition facility in Oracle Banking Treasury Management to streamline your operations based on the types or categories of business segments you operate in.

A Portfolio Product is a category or a type of portfolio. For instance, you can define your investment portfolio of zero-coupon bonds as a product in Oracle Banking Treasury Management. A portfolio product can, thus, serve to classify the portfolios that you maintain in your bank and to reflect either the security level or the investment philosophy of your operations.

A portfolio product can also represent a specific service that you offer. You can define a customer portfolio maintenance service, Clean, Safe, and Fast Buck’, for example, as a product. Similarly, you can define a category of securities (such as the t-bills issued by your government) as a product, and a category of security deals as a product.

When building a product, you assign it a set of attributes. (You can define these attributes by associating the appropriate classes to the product.) The securities, portfolios, and security deals that you maintain under a product, respectively, acquire the attributes defined for the corresponding product.

The Advantage of Defining a Portfolio Product

The advantage of defining products is illustrated by the following example. Assume this scenario: Mr. Silas Marner, your customer, would like you to maintain his portfolio, worth USD 100,000, under the customer portfolio maintenance scheme, Clean, Safe, and Fast Buck. The highlights of this scheme are:

• You would not deal in long-term Zero Coupon Bonds.
• You would not deal in securities issued by alcoholic beverage companies.
• You would not deal in securities issued by industries blacklisted by Greenpeace.

Let us consider the different operations that you would perform in setting up this portfolio. You would specify, amongst other details:

• The securities that you are not allowed to deal in (long term zero coupon bonds, securities issued by alcoholic beverage companies and companies blacklisted by Greenpeace).
• The securities that you are not allowed to deal with (long term zero-coupon bonds, securities issued by alcoholic beverage companies and companies blacklisted by Greenpeace).
• The GLs that would be impacted.
• The advices that need to be generated.
• The charges that you would levy.
• The taxes that would apply.
• If you would like to auto liquidate for Corporate Actions.
• The MIS Heads under which you would like to report the portfolio.

If you maintain a hundred such customer portfolios under the same scheme, you will repeat the above operations as many times.

By defining portfolios with similar attributes as a product, you can standardize these operations. For example, for a portfolio product, you can define:

• The GLs that would be impacted (by associating an appropriate ‘Events, Accounting Entries and Advices Class).
• The advices that need to be generated.
• The charges that you would levy (by associating a Charge Class).
• The taxes that would apply (by associating a Tax Class).
• The MIS Heads under which you would like to report the portfolios.

Portfolios maintained under the product will acquire these attributes defined for the product.

Defining a customer portfolio scheme as a product reduces the effort involved in maintaining a portfolio.

By classifying your securities, portfolios, and security deals into products, you not only save time, but you can also easily retrieve information relating to securities, portfolios, ordeals of a particular type.