The banking and financial markets are full of regulatory requirements. Numerous business rules and decisions are made within the financial industry to process claims, validate transactions, compute benefits, determine rates, and deal with exceptions. It would be easy to manage these rules if they were fixed.
However, businesses have intricate processes that continually evolve. As a result, business rules keep changing, placing strains on the system, process, and employees of the industry.
Businesses can maximize value and minimize software complexity by using a business rules engine that includes business-specific logic and separates it from the rest of the application code. The business rules engine enables enterprises to better accommodate rapid changes in business policies and rules while lowering software implementation and support costs.
What is a business rules engine?
Business rules are lists of logical statements that define the behavior and operation of a business. A business rules engine is a specific application that enables business users to define, analyze, store, audit, and maintain business rules as executable rule services.
A BRMS helps you to change business logic 10-25x faster than traditional development.
Rule engine design separates the storage and management of business rules from the rest of the application component. The rules are stored and maintained in a business rule repository, which is isolated from the rest of the code.
Benefits of a business rules engine
A rule engine exposes business logic in a graphical design that allows subject matter experts and business analysts to create, edit or understand the business rules, decisions, and policies associated with a business process without programming.
The graphical illustration ensures a shared understanding and reduces the time to introduce new versions of business rules.
Improves efficiency and productivity
Manual decision-making takes hours and each decision requires human intervention to assess a problem against a set of policies. By implementing a business rules system, businesses will need to spend less time on policy-based decision-making and more time on complex and value tasks that require creativity and a high level of human intervention.
A business rules engine enables businesses to achieve efficiency and productivity gains.
As many as 70% of the activities involve decisions and thousands of recurring decisions need to be made by banking organizations each day. For example, whether the age of an applicant is eligible for a personal loan, an applicant has employment in a stable company, or whether an applicant is a credit card or loan defaulter.
Financial institutions making thousands of decisions each day with complex business rules can benefit from business rules engines.
With a business rules engine, financial services companies can:
- Speed up customer acquisition
- Reduce time to market new products and services
- Reduce loan processing time
- Execute corporate policies
- Offer instant quotation
- Ensure compliance with government regulations
Ensures compliance with policy and regulation
Business logic includes both business policy and business rules and both of them change frequently. A business rules engine enables users to automate policy and rules and enforce those rules during every transaction. Businesses can use the rules engine for internal policies regarding pricing, discounting, logistics, and more.
Moreover, BRMS can be used to comply with the government and industry regulations, such as tax code, licensing and permits, and capital requirements in banking.
Automated business regulations not only enable businesses to ensure the policy and rules are complied with but also ascertain transparent documentation of the decision-making process.
Improves customer experience
Today customers expect instant, smooth, and simple customer service interactions. When businesses take too long to make a decision, customer services are affected. Before the business process automation, banks and insurance companies took two to three weeks to process a new application for insurance and loans.
With the implementation of the business rules system, today banks and insurance companies can process the application in a couple of days or even hours. It makes customers happy, improves sales, and plays a key role in building brand loyalty from the start.
Generally, businesses provide a hotline staffed with financial advisors and lawyers to advise them on the required forms. Enterprises can capture the expert’s guidance into business rules, which can be automated with business rules engines and delivered through an interactive website. This enables businesses to provide exceptional customer services 24 hours per day.
Rules engine for collection management
Collection activities deliver value when they are efficiently managed and well-planned across a customer team. Like sales and marketing, collections often need multiple touchpoints and strategic follow-up with clients with outstanding accounts.
A rules engine can help deal with such pain point for organizations by proving the system for a follow-up and escalation plan on a case-by-case basis to organize tasks and improve collection outcomes.
Creates new revenue opportunities
Business growth is often limited by availability of skilled human resources. In today’s digital world, decision automation creates new revenue opportunities with 24×7 advisory and decision-making functions.
Financial and insurance companies that depend heavily on brokers and branches to guide customers can offer products virtually through the customer’s browsers instead.
Bank ROI Examples:
- By implementing Business Rule engine banks can cut 40% of their internal loan processing costs incurred
- Launch new products in the market in one week rather than launching it in 7-8 weeks (as practiced traditionally)
- Reduce system maintenance cost by more than 400%
- Reduce pricing strategy change management in a couple of days rather than taking weeks or months.
- Achieve a portfolio growth of 55% with better credit decisions
Why you should adopt a business rule engine for your business, right away!
A UK-wide study conducted by Pod Group, a software and connectivity service provider, has found that 73% of the UK businesses expect COVID- 19 pandemics will lead to a new stage of workplace and industry automation.
As per its latest research on the state of business automation, a new report from Bain & Company, leading management consultancy, has forecast that the number of companies scaling up automation technologies will double in the coming two years.
Your Intelligent Decision Automation Enablers
We at ACT21 Software are the premium solution implementation partner with Actico GmbH and is an implementation expert with Drools, RedHat, and Fico, and to offer business automation tools. We help financial enterprises take their agility and efficiency to a new level.
ACTICO Rules supports business users throughout business rules management by providing a powerful rules engine for executing business rules in an array of IT architectures.
ACTICO Rules enables businesses to separate their business logic from applications and change them whenever needed. Business rules and decision tables are presented in graphical design without coding.
Adopting Decision Automation solution by ACT21 Software enables organizations to reduce time by 95% to manage regulations, internal and external policies.
Conclusion
Enterprises can enjoy a wide array of valuable benefits with effective management and automation of business rules. Business rules engines can translate into reduced costs, increased revenue, improved compliance, and better customer services.