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Pricing Models allow the administrator to define the conditions that determine the final rate of a loan or account product. Pricing Models provide the ability to determine interest rates using a base rate and business rules, as well as establishing rate, discount, and premium thresholds.

The Pricing Models page in System Management (System Management > Origination > Pricing Models) displays a list of all pricing models configured in the Lifecycle Management Suite, and enables system administrators to create and manage the pricing models used at their institution.

The Pricing Model topic includes the following attributes and instructions to assist administrators with creating, copying, and editing pricing models:

• Pricing Model Attributes
  • General
  • Business Rules
• Pricing Model Actions
  • Creating Pricing Models
  • Copying Pricing Models
  • Editing Pricing Models
• Rule Configurations

Pricing Model Attributes

Pricing models consist of General and Business Rule attributes.

General

The general attributes include the basic descriptive information, as well as the base rate and thresholds assigned to the model.

The General tab is comprised of the following sections:

• General
• Base Rate
• Thresholds

General

The General section include the basic information pertaining to the pricing model. This section includes the following fields:

Field	Description
Name	Enter the name of the pricing model. When assigning a pricing model to a loan application type or account product, the Pricing Model drop-down list includes all active models configured within the Pricing Models page. If configuring pricing models for both loans and account products, it is recommended that institutions title their pricing models in a way that identifies whether the model applies to a loan or an account product. This ensures that a model including a rule with the correct pricing template is assigned to an account product, in order to apply the discount or premium to the account product interest rate during rule execution.
Description	Enter a brief description of the pricing model.
Active	Select the check box to enable the pricing model. Inactive pricing models are not available to assign to a loan application type or account product.

Base Rates

The Base Rates section includes configurations that allow administrators to determine the starting point for each pricing model. These configurations include the following fields:

Field	Description
Default Base Rate Table	Select the default base rate table to be used to establish the starting point for pricing. This field includes a list of all active base rate tables configured for the institution. The options that populate within this field are defined in System Management > Origination > Base Rate Tables. For more information, please see the Base Rate Tables topic for Account Origination or Loan Origination in this guide.
Initial Premium/Discount	Select the Initial Premium/Discount.                                   None - no initial adjustments are made to the base rate prior to running the appropriate pricing rules. Discount - a percentage is deducted from the base rate prior to running through pricing rules. Set amount of discount. Premium - a percentage is added to the base rate prior to running through the pricing rules. Set amount of premium.

Within the bottom of this section, system administrators are able to assign multiple base rate tables to the pricing model using the following two-box control:

Field	Description
Available	Displays a list of all active base rate tables configured in System Management > Origination > Base Rate Tables. To assign base rate tables to the pricing model, drag and drop the desired value(s) from the Available grid to the Assigned grid, or move the rules using the arrow keys. The value set as the Default Base Rate Table must be assigned to the pricing model within this section. If the Default Base Rate Table is not assigned, an error is received when trying to save the pricing model to inform that the Default Base Rate Table must match an Assigned Base Rate Table.
Assigned	Displays a list of the base rate tables assigned to the pricing model. These base rate tables are available to set for the Loan Base Rate Index field and Account Base Rate Index field in a rule, and populate as options to assign to the Loan Base Rate Index field and Account Base Rate Index field in an application that includes the pricing model.  For more information on the Loan Base Rate Index field and Account Base Rate Index field, please see the Base Rate Index Fields section of the Base Rate Tables topic in this guide.

Thresholds

The Thresholds section includes configurations that allow administrators to determine the interest rate thresholds for a pricing model. This section includes the following fields:

Field	Description
Minimum Rate	Enter a Minimum Rate that sets the floor for the Pricing Model. The pricing of applications using this pricing model cannot fall below the minimum rate.
Maximum Rate	Enter a Maximum Rate that sets the ceiling for the Pricing Model. The pricing of applications using this pricing model cannot raise above the maximum rate.
Maximum Premium	Enter a Maximum Premium which sets the largest surcharge able to be added to the rate (if applicable). All premiums assigned via rules are totaled and compared to this field. If the total of the premiums is less than this field, the total is applied to the pricing. If the total of the premiums is greater than this field, the maximum premium is applied to the pricing.
Maximum Discount	Enter a Maximum Discount that sets the largest discounts able to be deducted from the rate (if applicable). All discounts assigned via rules are totaled and compared to this field. If the total of the discounts is less than this field, the total is applied to the pricing. If the total of the discounts is greater than this field, the maximum discount is applied to the pricing.

Business Rules

The Business Rules tab enables administrators to select the appropriate rules, which determine how a loan application or account product is priced.

The Business Rules tab includes a multi-grid, which controls the assignment of pricing rules:

Table	Description
Available	Contains a list of all active Pricing rules authored in System Management > Origination > Rules Management that are available to be assigned to the Pricing Model. To assign pricing rules, move the appropriate rules from the Available box to the Assigned box. The Available box lists all Pricing rules that have been authored in Rules Management; therefore, if Pricing rules are authored for both loan and account products, it is highly recommended that the institution titles their rules in a way that identifies whether the rule applies to a loan or an account product. This ensures that the rules including the correct pricing templates are assigned, in order to apply the discount or premium to the account product interest rate during rule execution.
Assigned	Contains a list of all rules that have been assigned to the pricing model. The rules assigned to the pricing model execute when the Calculate process is run for the applicable loan application type or account product. If the Interest Rate Override field is set to true for an account product, the interest rate for the product is set manually in the Account Product screen, and is not set by the pricing model during the Calculate process. The interest rate for an account product is only determined by the pricing model when the Interest Rate Override field is set to false for the account product.

Pricing Model Actions

The Pricing Models page provides system administrators with the ability to perform the following actions:

• Create Pricing Models
• Copy Pricing Models
• Edit Pricing Models

Creating Pricing Models

To create a new pricing model:

• Click .
• In the General tab, enter the name of the pricing model, and select the Active check box. Navigate to the Base Rate Tables section to assign base rate tables to the pricing model, and then define the interest rate thresholds within the Thresholds section.
• When all General attributes are defined, select the Business Rules tab, and assign Pricing rules to the Pricing model.
• Upon completion of all attributes, click  to create the Pricing model. The newly created model populates within the grid in the Pricing Models page, and is available to assign to a loan application type and/or account product.

  A Pricing Model must be assigned to each loan application type within the General tab in System Management > Origination > Loan > Loan Application Types.  If desired, system administrators can also assign a Pricing Model to each account product within the General tab in System Management > Origination > Account > Account Products. For more information, please see the Loan Application Types and/or Account Products topic in this guide.

Copying Pricing Models

To copy a pricing model:

• Select the desired base pricing model in the grid, and click .
• Make the desired updates to the new pricing model.
• Once all updates are complete, click . The newly created model populates within the grid in the Pricing Models page, and is available to assign to a loan application type and/or account product.

Editing a Pricing Model

To edit a pricing model:

• Double-click the desired pricing model within the grid, or highlight the model and click .
• Make the desired updates to the pricing model.
• Once all updates are complete, click .

Rule Configuration

The rules assigned to each pricing model are authored under the Pricing category in System Management > Origination > Rules Management. Reference the table below for an overview of the Entity and template to use to author a Pricing rule, as well as the rule logic that populates once the action template is selected within the Definition tab:

Entity	Template	Rule Logic
Application	Add a Discount
Application	Add a Premium
Application.AccountProducts	Add an Account Product Discount
Application.AccountProducts	Add an Account Product Premium

The example below provides an overview of a decision rule authored to add a premium to a loan based on the term:

Examples of a Condition and Action for this rule are as follows:

• Condition

   

• Action

   

The following example displays a decision table rule authored to add an account product premium to the interest rate based on the application type, type of account product, and number of account products on the application:

Examples of a Condition and Action for this rule are as follows:

• Conditions

   

• Actions

   

 

 

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