3.20.9 Configuring a Relationship Pricing Example

This topic walks through a coarse-grained example of a relationship pricing (RP) use case.

It enumerates the setups needed and the execution. It is an indicative general use case and is added only to give an idea of how one typical RP use case can be configured. The setup mentioned in this section can only be used to configure RP in a testing environment. Any value in the example are not meant to be entered in a production environment directly. The use case enumerated is not a leading indicator of a use case that the bank should configure.

Pre-requisites:

• Knowledge of Pricing Decision Service (PDS).
• Read the Pricing Decision Service (PDS) user guide thoroughly - https://docs.oracle.com/en/industries/financial-services/microservices-common/14.8.1.0.0/cmcug/create-pricing-model1.html
• Application is deployed and the starting maintenances are done. These are enumerated at - Oracle Banking Multi-Entity Deployment Guide
• Basic setup is done. This involves setting up of bank, country code etc. If not, this is covered here as part of "Preparatory Configurations" in the sections below.

Functional use case:

A bank periodically reviews and reduces interest to deserving loans customers based on their relationship profile. This example enumerates how the relationship pricing (RP) module can be configured to provide these benefits. The attributes used in the calculations are delinquency-flag (lending attribute) & customer-segment (party attribute).

All Silver, Gold, Platinum customers will receive reduced interest rates on their loans, provided they are not delinquent at the time RP is calculated.

The pricing model defining the benefits is created with the following specifications:

• Selection Criteria: Rule - (if delinquency-flag == N)
• Customer segment is used in the price definition tiers:

  Table 3-146 Customer segment

  Customer segment	Interest rate benefit
  Silver	-0.25
  Platinum	-0.54
  Gold	-0.36
  Standard	0

As part of business operations, party data changes (in this example - customer-segment changes) are raised by the Party module in the form of update events. These events are subscribed to by RP consumers which update this data into the RP store.

The interest benefit calculation flow occurs in the End of Day batch processing.

A set of RP jobs execute the following:

• Transfer lending data to RP schema (includes delinquency-flag on accounts)
• Transform lending attributes into RP aggregates
• Execute interest rate benefits on accounts
• Transfer interest rate benefit data to lending schema

Configurations:

There are multiple configurations that are necessary to fulfill this use case.

• Preparatory Configurations – This is the base data necessary for some of the pricing configurations to be executed. These configurations are mostly needed for all banking use cases and therefore these must be already present.
  • Create Bank (BIC)
  • Create Country Code
  • Create Currency
  • Create Host Code
  • Create Branch
  • Create User - Create a dedicated user to execute this use case, with needed permissions.
  • Create Calendar
• Pricing Configurations - In this section the actual pricing model is created.
  • Create Fact
  • Create Rule
  • Create Scoring Feature
  • Create Pricing Model
• Relationship Pricing Configurations - These set of maintenance needed to pull the data from core systems and execute the RP job.
  • Create RP Aggregates
  • Subscribe to party topic to retrieve party update events
  • Create data transfer jobs
  • Create Transaction to Attributes mapping
  • Create trigger definitions
  • Create Batch Category to execute the batch

Pricing Configurations -

Screen:Create Product Processor

The use case is to determine relationship pricing on interest benefits for loans customers. Hence the "OBRL" product processor is created.

Table 3-147 Create Product Processor

Field	Value	Description
Product Processor Code	OBRL	Specify the unique product processor code.
Product Processor Description	Product Processor create for testing RP in batch	Specify the short description for product processor.
Effective Date	01-01-1900	Specify the effective date.
Expiry Date	31-12-2096	Specify the effective date.

More Details - Create Product Processor

Screen:Create / View Fact

Table 3-148 Create / View Fact

Field	Value	Description
Code	customerSegment	Specify the alphanumeric code without space for the fact.
Description	customerSegment	Specify the description of the fact.
Product Processor	OBRL	Click Search and select the product processor from the list.
Tag	null	Specify the tag for fact.
Type	TEXT	Select the type of the fact from the drop-down list. The available options are: Number Text Boolean Date Array ENUM

More Details - Create Fact

Table 3-149 Create Facts

name	description	namespace	facttype.id	facttype.name
DELINQUENCY_FLAG	DELINQUENCY_FLAG	OBR	202	TEXT

Table 3-150

name	description	namespace	facttype.id	facttype.name
customerSegment	customerSegment	OBRL	202	TEXT

Screen:Create / View Rule

Table 3-151 Create / View Rule

Field	Value	Description
Code	RPDelRule	Specify the alphanumeric code without space for the rule.
Description	RP Delinquency Rule	Specify the description of the rule.
Product Processor	OBRL	Click Search and select the product processor.
Tag	null	Select the tag from the drop-down list.
Select Existing Rule	null	Click Search and select the existing rule.
Add Section	null	Click Add Section to create the multiple rule condition.
Expression Builder	null	Select the expressions to build the rule.
Add Expression	null	Click Add Expression to create the expression for the rule.
+ Icon	null	Click + icon to add new expression.
Fact / Rules	DELINQUENCY_FLAG	Select the fact or rule from the drop-down list.
Operator	"=="	Select the comparison operator from the drop-down list.
Data Type	TEXT	Select the data type for the fact or rule. Once the user select the data type, one more field opens adjacent to the output, update the same based on the selected output option. The available options are: Text Number Boolean Date Fact The below option appears if the Data Type is selected as Boolean. True False
Output	BOOLEAN	Select the output from the drop-down list. Once the user select the data type, one more field opens adjacent to the output, update the same based on the selected output option. The available options are: Text Number Boolean Date Fact
Expression	DELINQUENCY_FLAG == N	Displays the expression and output updated in the expression builder.

More Details - Create Rule

Screen:Create / View Scoring Feature

Table 3-152 Create / View Scoring Feature

Field	Value	Description
Feature Code	CustomerSegment	Specify the unique feature code.
Feature Description	CustomerSegment	Specify a short description for the feature.
Product Processor	OBRL	Specify the product processor for which the feature is being created.
Rule	N	Select the rule, if it is required to define the feature. This option is used to decide whether the feature is rule based or fact based. The available options are: Yes No
Fact Code	CustomerSegment	Select the fact code to be mapped to the feature from the drop-down list. This field is enabled if the Rule is selected as No.
Fact Name	CustomerSegment	Specify the fact name of the feature. This field is enabled if the Rule is selected as No.
Rule Code	null	Select the rule code to be mapped to the feature from the drop-down list. This field is enabled if the Rule is selected as Yes.
Info	null	Click this icon to get the information about the rule.
Rule Name	null	Specify the rule name for the selected rule. This field is enabled if the Rule is selected as b.

More Details - Create Scoring Feature

Screen:Create / View Pricing Model

Table 3-153 Header Information

Field	Value	Description
Pricing Code	LNRP101	Specify the unique pricing code.
Pricing Description	LNRP101	Specify a short description for the pricing.
Effective Date	2020-09-30	Specify the effective date.
Expiry Date	2051-02-28	Specify the expiry date.
Product Processor	OBRL	Specify the product processor for which the pricing is being created.
Priority	1	Specify the priority of the pricing.

Table 3-154 Selection Criteria

Field		Description
Use Existing Rule	N	By default, this option is enabled. Indicates if the existing rule is linked.
Rule Code	null	Select the rule code from the drop-down list.
Info	null	Click this icon to get the information about the rule.
Rule Name	RPDelRule	Displays the rule name of the rule code.
Create New Rule	N	Select this option to create new rule.
Code	RPDelRule	Specify the rule code.
Description	RP Delinquency Rule	Specify the rule description.
+ icon	Click this icon to add new expression.
Fact / Rules	DELINQUENCY_FLAG	Select the fact or rule from the drop-down list. Once the user selects the fact/rules, one more field opens adjacent to the output, update the same based on the selected output option.
Operator	==	Select the comparison operator from the drop-down list. The available options are: < > + = % != - >= <= * / Contains In Matches NotMatches NotContains Notin
Data Type	TEXT	Select the data type for the fact or rule. Once the user select the data type, one more field opens adjacent to the output, update the same based on the selected output option. The available options are: Text Number Boolean Date Fact Rules The below option appears if the Data Type is selected as Boolean. True False
Output	Boolean	Select the output from the drop-down list. Once the user select the data type, one more field opens adjacent to the output, update the same based on the selected output option. The available options are: Text Number Boolean Date Fact Rules The below option appears if the Data Type is selected as Boolean. True False
Expression	DELINQUENCY_FLAG == N	Displays the expression updated in the expression builder.

Price Definition (Tiered)

Table 3-155 Selection Criteria

Field		Description
Minimum Rate	-10	Specify the minimum rate applicable for the defined pricing code.
Maximum Rate	10	Specify the maximum rate applicable for the defined pricing code.
Rate Type	Tiered	Select the rate type from the drop-down list as Tiered.
<Numeric Feature> From	null	Specify the minimum numeric value of feature to which the interest rate is applicable.
<Numeric Feature> To	null	Specify the maximum numeric value of feature to which the interest rate is applicable.
<Character Feature> Value	Silver
	Platinum	Specify the alphabetic value for which the interest rate is applicable.
	Gold
Rate %	-0.36
	-0.36	Specify the interest rate applicable for the defined tier. This field appears once you select the Rate Type option as Tiered and Link a Rule? option as No.
	-0.54
Rule	null	Select the rule for the defined tier from the drop-down list. This field appears once you select the Rate Type option as Tiered and Link a Rule? option as Yes.

More Details -Create Pricing Model

• Create Relationship Pricing Configurations
  This topic describes the information about the relationship pricing configurations.