Introducing The Business Rule Engine

Published on: April 24, 2023

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By Five Degrees

A feature allowing for endless flexibility.

During a period when interest rates are rising exponentially it's crucial for SME lenders to stay ahead of the curve. Adapting to the ever-evolving landscape of finance requires more than just keeping up with customer demands and business requirements - it demands efficiency. Those that have invested in an efficient core banking system can easily adjust their platform to the changing demands.

Consider the scenario where a lender can easily customize their system by simply clicking a few buttons. With this capability, they can swiftly tap into new markets and generate additional sources of revenue by creating new business rules, incorporating new fee structures, and implementing event-driven rules. 

This is precisely what customers of °neo by Five Degrees do. With the recent incorporation of our business rule engine, our clients can now easily introduce new features in just a few minutes or days. 

Fridrik Reynisson, Chief Architect °neo by Five Degrees: “We are excited to announce that we have integrated a unique business rule engine into our core-banking platform °neo, allowing for easy rule customization. By including a business rule engine, a launching time of several weeks becomes days. This allows lenders to quickly tap into new, profitable markets plus adhere to fast-changing consumer demands.”  

Diving into the feature.

The business rule engine is visualized as an empty box filled with the necessary variables to create your rule. Our cloud-native platform °neo provides the box, and you have the flexibility to load it with your desired rules.  

For example, when a borrower passes away, the lender can establish specific rules related to this event. The rules are entered into the engine and executed through workflows. These could include ceasing communication with the deceased borrower and halting the calculation of interest on the loan.  

What are the benefits?

The business rule engine is a low code feature. Traditionally, making changes to any system requires change requests, refinement sessions, development, deployment and takes up to several weeks or months. With the business rule engine our customers are not dependent on software suppliers and can implement changes themselves with a few clicks.  

By creating test cases, the business rule engine can monitor the consistency of your rules and ensure that any errors are immediately detected. This way, any mistakes will be visible immediately, which maintains the integrity of your rules.  

Users can inherit rulesets and use templates and libraries. Every day can bring a new rule, but keeping track of when each set of rules is enforced is crucial. Fortunately, the system automatically tracks every revision of the ruleset, reusing the rules is efficient and nothing is ever lost. 

All the previously mentioned benefits ultimately give lenders an endless amount of flexibility 

SME lenders use the BRE to facilitate broker's loans.

The example below showcases how SME lenders can effectively utilize our Business Rule Engine to streamline their operations.  

SME lenders in the UK frequently collaborate with brokers to distribute loans. Therefore, the broker market thrives with a whopping 45 billion GBP in value. These lenders survive of the fees a loan generates, making it important to efficiently manage loans through workflows with brokers. 

However, adjusting those fees is more challenging than it seems. Working with multiple brokers is essential, but it can be challenging for IT systems to accommodate varying fee structures required by each broker. Depending on the lender's business model, the number of brokers can be substantial.  

So, customizing a core banking platform to facilitate a different field for each broker is time-consuming and expensive.  

The business rule engine provides lenders with a straightforward process to address this issue. The feature establishes new fee structures without requiring developers' involvement to customize each field. When a customer applies for a loan through a broker channel, our system records the broker(s) as being associated with the loan. A potential business rule could specify that a fee, which may be a fixed amount or a percentage, is charged by the broker for each payment made on the loan. The specific fee amount may vary depending on the individual broker. 

The Business Rules Engine (BRE) is configured to respond to loan payment events registered within °neo. Upon receiving notification of a payment, the BRE checks the loan and associated broker, and applies business rules specific to that broker. This includes determining if a fee is applicable, calculating the fee based on custom rules, applying it to the loan payment, and potentially even disbursing it to the broker.  

Here is a visualized example of the involved workflow: 

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See the Business Rule Engine live at FinovateEurope 2023 in London. 

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