What is a Business Rule Engine in banking, and how can it benefit an Organisation?

Consider a scenario where you have an insurance company and hire a broker to meet your corporate clients. His daily task is to visit companies of various sizes and sectors and present them with proposals for diverse types of claims, ensuring they meet regulatory requirements. What if an opportunity comes wherein the broker has almost closed the deal except that he must visit the office for consulting manuals and writing complex proposals? This ‘time gap’ could very well result in a loss of opportunity, highlighting the need for agility in decision-making processes.
Wouldn't you want to depend on a well-defined and automated business rule system that could quickly assess the key parameters of the proposal and come up with a preliminary decision before it proceeds to final acceptance? This is what business rules engines generally do: they streamline decision-making processes and enhance operational efficiency. They aid in providing agile, reliable, and assertive decision-making and effectively boost your business.

What are Business Rules in banking, Business Rules Engine & Business Rules Engine Management System?

Business rules are statements that will guide the proper functioning of your business. They basically define what, where, when, why, and how something must be done within an organisation. A business rules engine is an application that manages decision processes using pre-defined logic to determine outcomes.
Implementing a business rules engine enables automated and precise decision-making, especially for businesses that use complex logic to identify the output, ultimately improving efficiency. This logic needs to be dynamic, based on specific scenarios and parameters.

A Business Rules Management System is an application used to specify, execute, control and maintain the variety and complexity of decision logic used by operational systems within an organisation or enterprise.
Strategy One, by CRIF, is a complete business rules management platform and decision engine that enables your organisation to identify the right targets, increase customer loyalty, boost sales and margins, manage risk, and implement business and regulatory policies and procedures.

Examples of Business Rules for Enhanced Decision Making  in banking sector

Thousands of business decisions are made every day. We are unaware of how frequently rules dictate when decisions should be made. However, to achieve the desired result at the transaction level, each business system must employ the appropriate decision logic for each task. For example:

• Financial institutions must confirm that a loan complies with all requirements and guidelines for insurance, paperwork, and regulations to reduce risk and ensure compliance with constantly changing regulations, corporate policies, and customer expectations.
• Customers are frequently offered discounts using business rules. For example, a company may have a policy that provides a discount on purchases to customers who spend $5,000 in a calendar year.
• Health insurance providers must determine whether a prospective new client satisfies eligibility requirements.
• When originating a mortgage, banks are required to gather a lot of data, including details about the property being purchased, the borrower's credit history, and ensuring compliance with regulatory requirements. For manual loan processes to be automated, business logic is crucial. For instance, a bank may set a minimum credit score requirement to offer a certain interest rate.

How Does a Business Rules Engine in banking Benefit an Organization’s Efficiency?

Since a business rules engine is software that executes one or more rules in a predetermined order to achieve the desired outcome, business rules engines are used to automate decision-making processes, such as determining whether to approve a loan application or identifying the most appropriate response to a customer query.

Here's how a business rules engine works:

• The business rules engine receives input data, which can come from various sources, such as a database, user input, or sensor data.
• It processes the input data according to a set of pre-defined rules. These rules are typically stored in a ruleset, a collection of rules that the rules engine uses to make decisions.
• The business rules engine executes the rules in the ruleset in a predetermined order. The order of execution can be based on the priority of the rules, the dependencies between the rules, or other factors.
• Based on the input data and the rules that have been executed, the business rules engine produces an output. This output can be a decision, a recommendation, a course of action, or a result.

Business rules engines are used in various applications, including business process automation, customer service, fraud detection, and data analysis. They are often used in conjunction with other software systems, such as databases, machine learning algorithms, and visualisation tools, to enable more complex and sophisticated decision-making processes.

How Does a Business Rules Engine Software for Automation Work? 

The Business Rules Engine is important software that can deliver value to your company, development team, and customers. It can help you in the following areas.

1. Keeping up with the market speed: 

   As businesses grow with time, they naturally acquire more customers, increasing their business's complexity. A business rules engine management system simplifies the task at hand. It speeds up decision-making, giving you a big buffer to do other important things crucial for your business.

2. Compliance with policy and regulation: 

   A BRMS system enables you to capture policy and regulation through business rules that are then applied to all business transactions.

3. Provides a better customer experience: 

   A BRMS helps you to provide faster and more responsive service to your customers.  It can help your agents in diagnostics, upsell or cross-sell. Whether selling complex products online or automating a help desk function, it can deliver a better customer experience.

If you are looking for a business rules engine, contact CRIF for an entirely automated, autonomous, and confident decision-making solution for your enterprise.