Key concepts

The following key concepts must be understood in order to use the Banking Solution Sample.

Catalog

Catalogs are collaborative MDM containers that are used to store items. Collaborative MDM can have zero or more catalogs; however, an item can only belong to one catalog.

Category

Categories are used to classify items. In the same way as a catalog contains items; a hierarchy contains categories.

Effective, Expiration, End Dates

Parts of the system can exist in one of three statuses:

• Effective Date - What is the first date that it can be used in an offer and presented to a customer or prospect?
• Expiration Date - What is the last date that the item can be included in an offer that is presented to a customer or prospect?
• End Date - When must all contracts, agreements, or accounts that rely on this item be revised to exclude the item?

Feature

Features represent the basic building blocks of products and services that may be included in a specific offer. For example, a demand deposit account might include the ability to write checks (for example, typical retail checking account) or not (typical commercial banking clearing account).

Features tend to represent things that can be charged for, and therefore be connected to specific rules on how the charges are calculated. Following the example on the demand account for retail banking, there is a Feature for Clearing Checks which is typed to a set of fees that are needed to support the Check Clearing function. This would include the ability to charge for each check, to clear checks when there are sufficient balances available, and the ability to charge if it is allowed to clear checks that will cause the account to have a negative balance. Each of these would represent an individual feature.

Features can be associated with various conditions. For example,

• Fee Condition - a rule that uses a transaction count and cost per transaction to calculate a fee (for example, cost to clear a check).
• Rate Condition - a rule that uses an amount and a rate to calculate an amount (for example, credit card monthly interest charge or interest earned on a savings account).
• Limit Condition - a rule that says when something can be done. Continuing with some of the examples above, one limit condition would be the amount of overdraft allowed, or the number of with-drawls from a saving account per month.

Feature group

Feature groups are used to make it easier to build sellable items and offers by bringing in more than one feature at a time. One of the uses of feature group is to build up set features that deliver a specific capability. For example, in order to be able to clear checks, the bank needs to be able to:

• Set fees based off of the numbers of checks presented for clearing
• Decide when to accept the check based off of a number of factors, including how many checks have already been accepted over a given period of time and the balance of the account IF the check is accepted
• Charge for when a check is accepted that would cause an account balance to be less than required by the bank

For example, the feature group Wire Transfer Fees can include the following related fees:

• Incoming Domestic Wire Transfer Fee
• Incoming Foreign Wire Transfer Fee
• Outgoing Domestic Wire Transfer Fee
• Outgoing Foreign Wire Transfer Fee

Hierarchy

A hierarchy, sometimes referred to as category tree (particularly within collaborative MDM scripting), is a structured "tree" of categories.

Item

An item is a representation of a product or other object. Items can exist in a catalog only, where they can be categorized in one or more categories, or unassigned. Items must be unique within a catalog and can exist in one catalog only. However, items can be referenced from another item or a category in one or more catalogs.

Offer

An offer is something that can be purchased by a prospect and represented by a single contract. Offers are created by:

• selecting one or more sellable items
• determining which sellable items are required or optional
• deciding which of the optional features of the sellable items will be required, optional, not available
• setting the pricing, eligibility and marketing rules

Prospect

A prospect is someone who is presented with an offer. This person may or may not have a relationship with the bank.

Sellable Item

A sellable item represents the smallest thing that the bank can sell by itself. This can represent a service (for example, the ability to go to a branch of the bank and exchange one currency for another) or a product (for example, checking account or credit card). Sellable items have required features and may also have optional features that can be included or excluded depending on the offer. Sellable items have neither pricing nor specific eligibility defined, but may have compliance requires set.

Version

Because contract changes may not effect all existing contracts, just future ones, the fact that something requires a major version changes requires that a new item be created. Existing offers will always continue to refer to the item with the old major version number. Conversely, minor version number changes are used more in the context of auditing and history. Changes made that require only minor version number changes take effect on all offers that reference the item. Every change to an item in any catalog is versioned in order to meet two business requirements:

• What was presented to a customer at some point in time
• Change the contractual terms of an offer

In order to meet this requirements, any change results in the version number in increments. Version numbers can be broken into Major and Minor parts. For example, 1.2 where 1 is the major version number and 2 the minor version number. Changes that apply to Use Case 2 cause the major version number to be increased. All other changes result in the minor version number increment.