Rules

The following two types of Rules are available in Run Rule Framework for Oracle Financial Services Loan Loss Forecasting and Provisioning (LLFP) Application:

• Classification Rules
• Computation Rules

Classification Rules

This type of Rules re-classify table records in the Data Model based on the criteria that include complex Group by Clauses and Sub Queries within the tables. In LLFP, various methods are used for calculations (for example, provision matrix method, cash flow method, and so on). To determine a set of bank accounts that use one of these methods, you can use the Run Rule Framework (RRF).

For example:

Consider a scenario to determine the required methods for Product Type and Customer Type and move data from Staging to FACT_ACCOUNT_DETAILS table using a T2T.

Here, two source and target hierarchies, one each for Product Type and Customer Type is used. Based on the values of this combination of Product Type and Customer Type, the target hierarchies are assigned. This target hierarchy represents the method such as the provision matrix method and cash flow method.

That is, based on the satisfied combinations from source hierarchies (Product Type and Customer Type), the method SKey in the FACT_ACCOUNT_DETAILS table is updated.

Computation Rules

These Rules compute new values/matrices based on Simple Measures and update an identified set of records within the data model.

For example:

In LLFP, Expected Credit Loss (ECL) is calculated by creating Rules using the following formula:

ECL = Outstanding Amount x Probability of Default (PD) X Loss Given Default (LGD)

To calculate this, a DT is created using RRF, where necessary expressions are defined. The instructions to multiply the values of all these three columns are encapsulated in the Rule.