AA Lending Property Classes

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Introduction
This part of the course covers

▪ Lending Property Classes

- All the Property Classes that are in the Lending Product Line

▪ Lending Activity Classes

- Each Property Class has Activities associated with it which together
comprise the Lending functionality

▪ Along with the core components already covered, this comprises all
the configuration that is relevant to Lending

Slide 2
AA Lending Property Classes - Review

Slide 3
 Customer Account Limit Officers

Term Activity
Amount Mapping

Payment
Interest
Rules

Charge LENDING Accounting

Payment Activity
Schedule Restriction

Balance
Overdue
Maintenance

Activity Activity Activity Activity

Presentation Messaging Charges API

Slide 4
Activity Classes

Review of Activity Classes

• Activity Class defines what the system does when an Activity is run
• Each Activity Class relates to a Property Class
• Each Property Class has one or more Activity Classes - Different Activity
Classes within a Property Class behave differently according to their Action

• Unlike Property Classes, Activity Classes are specific to the Product

Line, i.e. Lending
• They are generally named in a similar way as follows:

LENDING-DISBURSE-TERM.AMOUNT

Product Line Process Property Class

Slide 5
Activity Classes - Standard
Activities

Change/Update ▪ Most
Property Classes have an
Activity Class to allow
editing of
Arrangement
Conditions ▪
Change/Update Activities
are run manually - The
Activity is called Change (or
Update) in the Activity menu in
the Arrangement Overview ▪
The process performed is
normally called UPDATE

Slide 6
Activity Classes - Standard Activities

Change Condition

▪ The majority of Property Classes also have an Activity Class which is

triggered for an Effective-Dated Change of Condition for a Product.

▪ This is executed at the start date + the days offset defined for the
product
- It results in a new Product condition being adopted by the Arrangement
▪ It cannot be run manually

▪ The Action performed is CHANGE.CONDITION

Customer Property Class

Slide 7
Customer
- Overview

▪ Specifies all involved parties

- Primary owner, joint owners, and others

▪ Parties negotiable at the Arrangement level - Supported attributes

will be negotiable
- Non-tracking

▪ Customer entered into New Arrangement Activity

- This customer becomes the “Primary Owner”
- Must also be added manually to the list of owners

– Party-Arrangement Relationships

CUSTOMER defines for the arrangement:

Slide 8
Customer
▪ the primary owner (link to CRF and LIMIT)

▪ owners (for single or joint arrangements)

▪ other parties that have an interest in the arrangement, and their

relationship with the Arrangement

Primary Owner Owner 1

Owner 2

Other Party
Arrangement
Other Party
Other Party

Slide 9
Customer
- Party Roles

▪ Additional parties that are not owners must have a role assigned
- e.g. Power of Attorney, Signatory, etc.,
▪ Roles specified by the bank in the virtual table AA.PARTY.ROLE

▪ Notes can be associated with other parties

Example Party Roles

Slide 10
Customer
– Activity Classes

Update Customer Activity

▪ Allows changes to Customer attributes

- Customer Ownership
- Other Party Relationships
- Party Roles
- Notes

Slide 11
▪ Primary owner cannot be changed*
Account Property
Class

Slide 12
Account
- Overview

ACCOUNT Property Class - Features

▪ Financial Arrangements
- Account is required in all financial arrangements

▪ Principal Balance
- Holds the main balance of the Arrangement

▪ Account Category
- Used for Reporting and Limit Parameter

Slide 13
 - Must be Non-Contingent
- Customer AC Range (1000-9999)

▪ Account Description

Slide 14
Account
- Attributes

Category
▪ reporting category
Currency
▪ Arrangement Currency
Restricting Postings
▪ Defined in POSTING.RESTRICT
▪ Each restriction applies either to all
debits, all credits or all transactions.
Account naming
▪ Account Title – up to two lines
▪ Short Title – for enrichment

Slide 15
Account
Alternate Keys/Reference
▪ Mnemonic – alternate key
▪ Customer’s Reference
▪ Alternate System ID – external id

– Negotiation Rules

Typically all attributes except Category are negotiable at Arrangement level:

Sample Account Product Condition

Slide 16
Account

– Activity Classes

Update Account Activity

▪ Allows changes to the following Account attributes:

Slide 17
Account
- Account Title
- Short Title
- Posting Restriction
- Mnemonic

Slide 18
Account Officers

Slide 19
Account Officers

Account Officers Property Class lets you specify:

▪ Primary Officer
- Main officer responsible for the Product or Arrangement

▪ Other Officers
- Other officers have specified role

▪ Roles

Slide 20
 - A Role for each the officer

Example Officer Roles:

Slide 21
Account Officers

Example - Loan Department Officers

The following is an example of the Other Officers being defined at the
Product Level while allowing the Primary Officer to be negotiated at the
Arrangement Level.

Slide 22
Account Officers - Example

Other Officers specified here

Slide 23
Account Officers - Example

▪ Attributes non-negotiable by default

▪ Except for Primary Officer

Specifying Account Officer for a new Arrangement

Slide 24
Account Officers - Example

▪ Enter Primary Officer

Slide 25
Account and Account Officers Exercise

▪ Create a new Account Product Condition from scratch, filling in all the tabs ▪
Working in the child product you created from the previous exercises, replace
the existing Account Product Condition with your new Condition
▪ In the same way, create a new Account Officers Product Condition
▪ In the previously created parent product, add the new Account Officers Product
Condition (hint you may have to make another change to accomplish this)
▪ Proof your product
▪ Fix errors (if any)
▪ Publish it
▪ Create a new Arrangement and enter data into the Account and Account
Officers Properties. Validate the record to check it is correct (you’ll need to fill in
the amount first). It is not necessary to commit the Activity at this stage, we will
do this once we have built up a minimum set of Conditions and can start to look
at the loan details.

Slide 26
▪ Look at the sample product conditions, and note down any differences.

Term Amount Property Class

Slide 27
Term Amount

Overview

▪ Controls the commitment made between the bank and the customer -
Monetary and Duration

▪ Handles Disbursements
- Single or multiple

▪ Currency Specific
- Multi-currency products require one Product Condition for each currency

Term Amount

Attributes
▪ Committed Amount

Slide 28
 - Amount to be lent

▪ Repayment Term
- Period of time over which amount is expected to be repaid

▪ Maturity Date
- Date on which term ends
- Calculated from Agreement Date and Repayment Term

▪ Revolving
- Whether and how amount available for drawdown can increase
• Payment – all repayments against principal cause available amount to
increase
• Prepayment – repayment of due principal does not increase available
amount; repayment of principal not yet due does increase available
amount

▪ Update of Limits
- Whether commitment amount of the Arrangement’s LIMIT record is to be
updated.

Slide 29
Example
The Mortgage product has a default term of 25 years, and is
nonrevolving. The commitment amount of the Arrangement’s LIMIT
record is not to be updated. The amount is limited to between
$200,000 and $750,000, with an override for larger amounts.

Slide 30
Term Amount – Attributes

▪ Term defined at product level

Slide 31
Term Amount – Attributes

▪ Non-revolving ▪ Do not update limit commitment

▪ Amount restricted to a range

▪ Override for amounts greater than $750,000
▪ By default attributes are negotiable

Slide 32
Term Amount – Attributes

▪ Non-negotiable attributes are specified explicitly

Specifying Term Amount Attributes for a new Arrangement

▪ Enter Amount

Slide 33
Term Amount – Attributes

▪ Validate
- Maturity date calculated from term and start date

Slide 34
Term Amount
- Periodic Attribute Classes

Periodic Attribute Classes

▪ Amount Increase
- Maximum increase of committed amount over time

▪ Amount Decrease
- Maximum decrease of committed amount over time

▪ Amount Increase Tolerance

- Maximum percentage increase of committed amount over time

▪ Amount Decrease Tolerance

- Maximum percentage decrease of committed amount over time

▪ Full Disbursement
- Prevents partial disbursements

Slide 35
Term Amount
- Periodic Attribute Classes

Example - restrict amount increase to 30% during the term

▪ Specify Periodic Attribute

▪ Value is 30%

▪ Generate an error when rule breaks

Slide 36
Term Amount
– Activity Classes

▪ Disburse
- Transfers funds from arrangement to specified account
- Triggered from a transaction with a ‘disbursement’ transaction code
• e.g. FT, Teller, Cash Pooling
• Cannot be run directly
• Note AA does not disburse automatically as per MG/LD
- Accounting determined by accounting rules
- Subject to sufficient committed amount remaining, and to Activity Restriction

▪ Decrease
- Manually reduce commitment amount
- Periodic Rules apply
- Run directly from Arrangement Overview

Slide 37
Term Amount
▪ Increase
- Manually increase commitment amount - Periodic Rules
apply
- Run directly from Arrangement Overview

▪ Change Term
- User modifies Arrangement term

Slide 38
Term Amount Exercise

▪ Create a new Term Amount Condition for your Mortgage Product from scratch,
with the following features:
- Term may vary between 15 and 30 years, defaulting to 25Y.
- Customers can pay ahead by making additional principal repayments, and
redraw any of these prepayments at a later stage.
- The Term, Amount, Change Amount and Maturity Date are the only fields
that should be changeable.
▪ Working in the previously created child product, replace the existing Term
Amount Condition with your new Condition
▪ Proof your product, fixing any errors
▪ Publish it

Slide 39
▪ Create a new Arrangement and enter data into the Term Amount Property.
Validate the record and notice what happens. Which field is calculated
automatically? Change this field and re-validate. Which field is changed now?
▪ Test the negotiation rules
▪ Commit and Authorise the Arrangement, and find the committed amount in the
balances.
▪ Look at the sample product conditions, and note down any differences.

Activity Mapping

Slide 40
Financial Activities

Financial Transactions Review

▪ Debits and credits to the Arrangement can be initiated from
Applications outside AA
- e.g. FT, Teller, AC.CASH.POOL, etc.
- User enters Arrangement Number and other details into the Application

▪ These Applications kick off an AA Activity

- Transaction Code determines which Activity
- Mapping defined in “Activity Mapping” Property Class

Slide 41
Activity Mapping

Activity Mapping Overview

▪ Maps a Transaction Code to an Activity

▪ Multiple Transaction Codes could link to the same activity

▪ Default Activities for debit and for credits for unmapped Transaction
Codes

Slide 42
Activity Mapping - Example

Activity Mapping Example – Funds Transfer

▪ Transaction Type ACDI

▪ Maps to Transaction Code
FT.TXN.TYPE.CONDITION
- using FT.TXN.TYPE.CONDITION

▪ Which maps to Activity

850
- using AA Activity Mapping

Activity Mapping
▪ Similar mappings for
LENDING
-DISBURSE
-
AC.CASH.POOL
COMMITMENT

Slide 43
 (AC.SWEEP.TYPE) and TELLER (TELLER.TRANSACTION)
Activity Mapping

Example of Activity Mapping Product Condition

▪ Transaction code mappings

Slide 44
 ▪ Default credit and debit activities
Activity Mapping Exercise

In this exercise we will configure the Disbursement Activity.

▪ Create a new Activity Mapping Product Condition to map the 850

Transaction Code to the Disbursement Activity

▪ Working in your previously created parent product, replace the existing

Activity Mapping Product Condition with your new Condition

▪ Proof and Publish it

▪ Create a new Arrangement

▪ Disburse the Loan

▪ Notice the effect on the Balances and the Activity Log

Slide 45
Activity Restriction

Slide 46
Activity Restriction

Activity Restriction Overview

▪ Activities can be “restricted” in various ways, resulting in constraints on

how Activities can be run
- For any activity, it can simply be a full restriction which will prevent Activities
from being run altogether, e.g. No Principal Decrease. Or it can generate an
override for a particular Activity.
- For Financial Transactions this can be refined into a partial or conditional
restriction including restricting transaction amount, multiple or
number/frequency of transactions, e.g. Disbursements must be in multiples
of 100

▪ Apply conditional charges to Activities, e.g. Charge for Principal

Decrease in the first year.

Slide 47
 ▪ This works by defining restrictions and determining that breaking the
restriction generates an error or override and optionally a “break
charge”
Activity Restriction – Periodic Attribute Classes

Periodic Rules ▪ Amount of Transaction

- Restrict amount of each transaction to a minimum, maximum, or multiples.
▪ Maximum Total Amount

Slide 48
 - Specify maximum total amount over a period.

▪ Maximum Number of Transactions

- Restrict number of transactions of this type over a period.

Activity Restriction

Demonstration of Activity Restriction Product Conditions

▪ View various Activity Restriction Product Conditions in

Model Bank. Include the Periodic Rule tab.

Slide 49
Activity Restriction Exercise

In this exercise we will define a minimum disbursement from our product to

be $200.

▪ Create an Activity Restriction Product Condition ▪ Restrict the

Disbursement Activity.
▪ Add a periodic rule to restrict the minimum disbursement amount to
$200, with an override if it is below that amount.

▪ Add the AR.DISBURSEMENT property to your product Group and

rebuild all activities

▪ Proof and publish your product

▪ Try and do a disbursement of less than $200.

Interest

Slide 50
Interest
- Introduction

Interest Configuration in AA

▪ Multiple interest components can be configured separately

(e.g. principal interest and Penalty interest)

▪ Each interest component is represented by an Interest Property

▪ Interest Property Class is used to configure each Interest
Property

▪ Configuration breaks down into two parts:

- Part I : how is the rate determined
- Part II : how are the accruals and balance calculated

Slide 51
Interest – Part I

Part I - Interest Rate Calculation

(Rate types, tiers, margins, caps and floors)

Slide 52
Interest –
Rate Type

Fixed Rate
Floating Rate
(e.g. 6.5%)
7.00% 7.00 %

6.80% 6.80 %

6.60% 6.60%

6.40% 6.40%

6.20% 6.20 %

6.00% 6.00 %
01/01/08 15/02/08 31/03/08 15/05/08 29/06/08 01/01/08 15/02/08 31/03/08 15/05/08 29/06/08

Periodic Rate
Periodic Rate
Period Rate (with reset frequency)
Interest - 6M 6.50 Periodic Rate Attributes
12M 6.45 7.00%
6.80%
24M 6.40 6.60%
6.40%
36M 6.40 6.20%
6.00%
48M 6.45 01/01/08 15/02/08 31/03/08 15/05/08
Slide 53
Example - Periodic Rate with Annual Reset

▪ Use PERIODIC.INTEREST index 90

▪ Interpolate if Term is between two defined rates in index

- Interpolate is the only option
▪ Period is the same as the term (leave blank)

▪ Reset once a year

Slide 54
Interest –
Tiers

Tiered Rates
▪ Interest rates can be defined as a single tier, or multiple tiers
▪ With multiple tiers, rate varies according to balance amount
- Level – rate is level across the whole balance
- Banded – rate varies between bands
▪ Each tier can have a different rate type
Margin
▪ Operation
- Add/Subtract
- Multiply
▪ Single/Multiple margins per Tier
▪ Multiple margins can be named
- defined in AA Margin Type Virtual Table

Slide 55
Minimum/Maximum Rate
▪ to regulate rate fluctuations
▪ applies to each tier

Slide 56
Interest –
Part II

Part II – Accrual and Balance Calculation Parameters

▪ Covers
- Accrual calculation (Days Basis, Accrual Rule, Compounding &
Negative Rates)
- Balance calculation (Calculation Type - Daily, Average, etc, Balance
Threshold)

Slide 57
Interest –
Days Basis

Days Basis

▪ Numerator (interest days)

- 360 – Each month is considered to have 30 days
- 366 – The exact number of days will be used (365 or 366)

▪ Denominator (days in the year)

- 360 – Each year is considered to have 360 days
- 366 – The exact number of days in the year will be used
- 365 – Each year is considered to have 365 days
- 364 – Each year is considered to have 364 days

Slide 58
Interest –
Days Basis

Numerator 360 366 (Actual)

Denominator
360 A (A1, A2) B

366 (Actual) D C

365 F (F1, F2) E

364 G
S (special) – actual interest amounts to be entered by the user, subject to a
tolerance
Note: A1, A2, F1 and F2 are variations which alter the day on which
interest in February is earned.

Slide 59
Interest –
Accrual Rule

▪ Accrual Parameters
▪ User-defined
▪ Parameters
- Include Start Date (Yes/No)
- Last Day Inclusive (Yes/No)
- Principal Increase Adjustment
- Principal Decrease Adjustment
- Rounding Rule (Natural, Down, Up, Currency, None)
- Intermediate Calculation Rounding (Yes/No)
- Principal Adjustment Routine

Slide 60
Interest -
Compounding

Compounding

▪ T24 supports the compounding of both debit and credit

interest ▪ The following compound frequencies are supported:

- Annual – once per year
- Semi-Annual – 2 times a year
- Quarterly – 4 times a year
- Bi-Monthly – 6 times a year
- Monthly – 12 times a year

Slide 61
Interest -
- Twice-Monthly – 24 times a year
- Bi-Weekly – 26 times a year
- Weekly – 52 times a year
- Daily – 365/6 times a year
Balance Calculation Types

▪ Specifies how balance is determined for interest calculation

▪ User-defined
▪ Parameters
- Debit or Credit Balance

Slide 62
Interest -
- Calculation Type (Daily, Average, Highest, Lowest, Routine) -
Calculation Start and End days.
- Calculation Routine
Calculation Threshold and Negative Rates

Calculation Threshold

▪ Balance threshold for interest calculation

▪ Credit Interest – Minimum Balance

▪ Debit Interest – Maximum Balance

Negative Rates

Slide 63
Interest -
▪ Accrue interest when rates are negative
Rate Control

▪ Rate Cap and Rate Floor

- regulate interest rate - uses
Periodic Attribute Classes
• MAXIMUM.RATE
• MINIMUM.RATE

▪ Rate Increase and Rate Decrease

- regulate change over time -
uses Periodic Attribute Classes
• RATE.INCREASE
• RATE.DECREASE
• RATE.INCREASE.TOLERANCE

Slide 64
Interest -
• RATE.DECREASE.TOLERANCE

Slide 65
Interest
– Activity Classes

▪ Accrue
- Calculates accrued interest
- Posts amount using associated accounting rule
- Scheduled or manual

▪ Periodic Reset
- Fixes the rate according to the current Periodic Interest conditions
- May cause interest recalculation and change to payment schedule
- Scheduled or manual

Slide 66
Interest
▪ Change
- Manual change to any of the Interest attributes
- May cause interest recalculation
- May cause Payment Schedule to change

- Exercise

In this exercise, we will create an Interest Product Condition

▪ Add the PRINCIPALINT property to the Product Group

▪ Create an Interest Product Condition with the following features:
- Periodic Interest Rate, Index = 90
- Reset automatically twice a year
- Interpolate when Loan Term is between specified periods

Slide 67
 - A default margin of 0.75%, negotiable down to 0.5% with an override if exceeded. Also
make it so it cannot be negotiated upwards
- PERIODIC.RESET fully negotiable at the Arrangement level*
- All other fields non-negotiable

▪ Working in the previously created product, replace the existing Interest

Condition with your new Condition

▪ Proof and Publish your product

▪ Create a new Arrangement and enter data into the Interest Property. Test the
rules you have set up for the Margin

Payment Schedules

Slide 68
Payment Schedule - Overview

Part I – Basic Concepts

▪ Payment Calculation Types – calculating how much to pay
▪ Properties included in payments (e.g. Principal and Interest) ▪
Dates and frequencies - when payments will be scheduled.
Part II – Features
▪ Capitalising interest and charges
▪ Schedules that vary over time
- e.g. interest only for the first three months, then constant repayment

▪ Manual schedules
▪ Residual Amount
- “balloon” payments
Part III - Billing Part IV – Payment-related Features
▪ Schedule recalculation

Slide 69
 ▪ Pay-in-advance/Credit Balance

Payment Schedule

Payment Calculation Types

Interest

Principal Interest

Principal
Constant Linear Actual Other

Slide 70
Payment Schedule
– Payment Types

Specifying a Payment Type

▪ Calculation Type

▪ Mandatory Property Classes

Slide 71
- Could still add more e.g. Charges

Slide 72
Payment Schedule
- Timeline

Loan Schedule
Start Date plus
1st Final Term (from Term
Start Date Repayment Monthly Repayment Amount Property)
Nov 24th Dec 10th Repayments May 10th May 24th

Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08

- Repayment Frequencies

Frequency Variations Examples

Daily Every n days, every business day Every 10 days

Slide 73
Weekly Every n weeks, on a particular day Every 2nd Monday
or days of the week
Monthly Every n months, on a particular day The last Tuesday of
of the month, on a particular every 2nd month; the 1st
occurrence of a day of the week and 15th of every month
Annually Every n years, on a particular month Every 3rd Wednesday of
and day of month, on a particular July
occurrence of a day of the week in a
particular month
Advanced On specified days/weeks/months of Seasonal – The 21st of
every week/month/year every month except
Jun, Jul, Aug
Manual Manually entered dates 12th Mar 08, 27 Mar 08,
21st April 08
Example
The Mortgage Product is an Annuity Loan with a monthly repayment
schedule

Slide 74
Payment Schedule – Payment Types

Mortgage Product Payment Schedule – Type, Frequency and Properties

▪ Payment Type
▪ Frequency

Slide 75
 ▪ Properties included in payments
Demonstration of Payment Schedules (Part I)

▪ This demonstrates the range of possible combinations of Payment

Calculations and Frequencies

▪ Create an Arrangement for the Personal Loan (Biweekly Repayments)

product. Set the term to 6M to keep the schedule to a manageable size
▪ Validate it and show how the payment amount field has been
populated
▪ Commit it, but do not authorise it, so that you can make further changes
▪ Open the Arrangement, and view the Payment Schedule. Notice
whether the amounts are all the same, and when the final payment falls

▪ View the interest details. Notice how the interest splits across month-ends

Slide 76
 ▪ Now modify the Arrangement using the Pending Activities screen, to
demonstrate the following:
- Fix the first payment so that the first period is different from the payment
frequency, e.g. for a bi-weekly loan starting Friday 1st Feb 2008, make the
payment fall on a Tuesday

Payment Schedules Exercise (Part IA)

▪ Create a new Payment Schedule Product Condition with the following

characteristics:
- Linear loan -
Monthly payments
▪ Allow end-users to change the payment frequency, but prevent them from
changing anything else in the schedule.

▪ Working in your previously created product, replace the existing Payment

Schedule Product Condition with your new Condition

Slide 77
 ▪ Proof and publish your product
▪ Create a new Arrangement, checking that only the frequency can be modified.
Enter a term of 3 years, then validate the record to check it is correct. Commit
the Activity.

▪ View the Arrangement. It is not necessary to authorise the New Arrangement

Activity at this stage. Look at the Payment Schedule, and check that it is correct.
Notice what happens when a payment falls on a weekend.

▪ View a particular payment and look at the components of the payment.

▪ Explore the Interest Details tab

Payment Schedules Exercise (Part IB)

▪ Create a new Payment Schedule Product Condition with the following

characteristics:
- Annuity loan

Slide 78
 - Weekly payments, every Monday
▪ Allow end-users to change everything in the schedule except Base Date,
Business Days and Convention.

▪ Create a new Child product, similar to your first product, and with the same
parent, but using this new Linear Payment Schedule Condition.

▪ Proof and publish your product

▪ Create a new Arrangement, checking the negotiation rules. Enter a term of 6
months, then validate the record to check it is correct. Notice the calculated
amount – does it seem reasonable? Commit the Activity.

▪ View the Arrangement. Look at the Payment Schedule, and check that it is
correct.

▪ View a particular payment and look at the components of the payment.

▪ Explore the Interest Details tab

Slide 79
Payment Schedules Exercise (Part IC)

▪ Create another Arrangement from the previous product, and change the
Payment Schedule Property to the following:
- Term of 40 weeks
- Interest-only loan - Bi-weekly payments
- A manual payment on the maturity date
▪ Commit the Activity
▪ View the Arrangement. Look at the Payment Schedule, and check that it is
correct

▪ View the final payment and look at the components of the payment.
▪ Explore the Interest Details tab

Payment Schedules (Part II) - Features

Slide 80
Payment Schedules – Part II

Features

▪ Interest and Scheduled Charges

- Interest and charges can either be made due or capitalised

▪ Schedules can be divided into date ranges - e.g. Interest Only for the first
three months, followed by Constant Repayments for the remainder of the term

▪ Manual amount
- Enter a manual payment amount for all or part of the schedule

▪ Residual Amount and Amortisation Term

- Residual Amount => amount outstanding on Maturity Date
- Extended Amortisation Term => last payment is balloon payment

Slide 81
 ▪ Non-Business Day Date Adjustments
- Forward, Backward, Calendar, Forward Same Month

Payment Schedules – Part II

Demonstration of Payment Schedules (Part II) – Features

View the following loans:

▪ Small Business Loan

▪ HELOC

Slide 82
 ▪ LOC with 3% Principal Repayment
Payment Schedules Exercises – Part II

Using the Annuity Loan Product you created in Part I, create new
Arrangements with the following attributes:

1. Open an Arrangement for the Constant Repayment Product. Add in a

quarterly charge – use the MAINTENANCEFEE Property. Capitalise
this charge.
Browse through the Arrangement Overview

2. Open an Arrangement for the Constant Repayment Product. Change

the schedule to be Interest Only for the first three months, followed by
Constant Repayments for the remainder of the term. Browse through
the Arrangement Overview

Slide 83
3. Change the Constant Repayment Loan to have a longer Amortisation
term, to generate a balloon payment at the end of the schedule. Once
again, browse through the Arrangement Overview and view the details
of the last payment
Payment Schedules (Part III) - Billing

Slide 84
Payment Schedules - Bills

Bills - Overview

▪ Bill is advance notice of a payment, including due date and projected

amounts.

▪ Billed amount is basis for overdue and delinquency processing.

- Providing the customer pays the billed amount he or she is considered up to
date, regardless of what happens between the bill being issued and the due
date.
Bills - Overview

▪ All due amounts are billed – principal, interest and charges

▪ Bills are generated whether payment is scheduled or ad-hoc

▪ Option to issue a Bill Notice

- Could be issued in advance with projected amounts

Slide 85
Payment Schedules - Bills

- Bills with advance notice can be made final

▪ Combining due amounts into a single bill

- When amounts become due on the same date and notices are also to be
issued on the same date, a single bill can be generated
- Or bills can be split to allow payments from separate accounts
Billing Activities

▪ Issue Bill
- Number of days prior to due date to issue bill
▪Make Due
Sample Bill

▪ Dates

▪ Properties

Slide 86
Payment Schedules - Bills

▪ Amounts

Slide 87
Demonstration of Payment Schedules (Part III) - Bills

Slide 88
Payment Schedules Exercise (Part III)

▪ Create an Arrangement for the existing Personal Loan Product. Modify

the Payment Schedule Product Condition to have monthly repayments,
paid on the 23rd of each month. Specify that the bill is issued a week in
advance.

▪ Specify also that non-business-day payments be moved forward to the

next business day.

▪ Enter a term of 2 years, then validate the record to check it is correct.

Notice the calculated amount – does it look right?

▪ Commit the Activity.

Slide 89
 ▪ View the Arrangement. Look at the Payment Schedule, and check that it
is correct. Are non-business day payment dates being moved to the
correct date?

▪ Look at the bills and open the Activity Charge. For now we are only
concerned with Bills, we will cover charges later in the course.
Payment Schedules (Part IV) – Schedule
Recalculation

Slide 90
Payment Schedule – Part IV

Schedule recalculation

Slide 91
Payment Schedule – Part IV

Recalculate after Activity

Payment Schedule lets you specify precisely which Activities will lead to a
recalculation
For each Activity that requires recalculation, choose from one of the
following options:

▪ Payment
- Payment amount adjusted, term unchanged

▪ Term
- Payment Term reduced/extended, payment amount unaffected

▪ Residual
- Both Payment and Term unaffected, residual amount created/adjusted
Recalculation Frequency

▪ Automatically recalculate based on defined frequency

Slide 92
Payment Schedule – Part IV

Credit Balance

▪ The Credit Balance holds a positive credit amount within the loan.

▪ It is used for two things

- Holding the balance if the loan is overpaid and goes into credit
- Storing a paid-in-advance balance as required during the life of the loan,
which is used to repay bills subsequently made due.

▪ In the first case, it is usually a remainder activity in a payment which

catches excess payments

▪ It is credited using the LENDING-CREDIT-ARRANGEMENT activity.

▪ It will apply the movement to the account balance type specified
in the associated allocation rule.

▪ When a bill is due, and there is a credit in this balance, then an activity
is automatically triggered. This activity is specified in the “Repay from

Slide 93
Payment Schedule – Part IV

Credit Balance” field (APPLY.PAYMENT) in PAYMENT.SCHEDULE

Slide 94
Payment Schedule
- Schedule Recalculation

Slide 95
 ▪ Activities that will cause the schedule to be recalculated
Payment Schedules - Demonstration (Part IV)

Schedule Recalculation

Open an existing Arrangement for the Personal Loan (bi-weekly) product.

View the schedule. Then change the term, authorise it and view the
schedule again, noticing the changes.

Slide 96
Payment Schedules Exercise (Part IV)

▪ View the schedule for the Arrangement you created in the last
exercise.

▪ Modify the term, and authorise the Activity.

▪ View the schedule again. It should not have changed.

▪ Now set up your product so that it recalculates the payment when

you change the term.

▪ When Proofing your product, it is recommended not to change the

available date. If you completed the previous exercise, this will
now be in the past as the business day has advanced.

Slide 97
▪ When you have made the necessary modifications, create a new
arrangement. View the schedule, then modify the term, and notice
the changes to the schedule.
Payment Rules

Slide 98
Payment Rules - Payments

Payments Overview
▪ Credit transactions (i.e. payments into the Arrangement) can be applied
to the Arrangement in different ways.
- AA lets you create a different Activity for every way you want to apply
payments to the Arrangement

- The Activity Class for this is “Apply Payment”

▪ Apply Payment Activities additionally require rules to allocate funds –

“Payment Rules”. These rules define:
- Which Properties to credit
- Order in which to pay Bills and credit Properties
- For principal and interest: whether to credit current balances rather than
billed amounts

Slide 99
Payment Rules - Introduction

Problem - To define how to allocate incoming payments

▪ Arrangement could have multiple properties due – Principal, interest,

charges, penalties, etc

▪ Arrangement could have multiple bills, each with multiple properties

▪ Customer could also be making ad-hoc payment Solution - Payment

Rules determine:

▪ Which properties to pay, and in what order

▪ With multiple Bills

- By Bill - pay a bill at a time or

Slide 10
 - By Property - pay all due amounts of a given property first ie pay all interest
across all bills, then all fees, etc
- What order to pay the bills – oldest first or oldest last

▪ Whether to make ad-hoc payment

Slide 10
Payment Rules

Example – Bill Payment

When processing a bill payment, pay penalty interest first, followed by
charges, then principal interest and due principal. Once all the
properties are paid, any remainder should go to current principal.

Slide 10
Payment Rules

Current
Principal: $280
Example Payment

Slide 10
Payment Rules

Example – Payment By Bill

When processing a payment, pay bills in order, starting with the
oldest. Within each bill, pay penalty interest first, followed by
charges, then principal interest and due principal. Once all the bills
are paid, any remainder should go to current principal.

Slide 10
Payment Rules

Current
Principal: $560
Payment By Bill
Bill dated: 1 Mar Bill dated: 1 Apr
Payment: $2000
Principal: $500 Principal: $520

Principal Principal
Interest: $200 Interest : $180

Annual Fee: $20 Annual Fee : $20

Remainder:

Slide 10
Payment Rules

Example – Payment By Property

When processing a payment, pay penalty interest across all bills first,
followed by all charges, then all principal interest and all due principal.
Once all the billed properties are paid, any remainder should go to
current principal.

Slide 10
Payment Rules

Current
Principal: $560
Payment By Property
Bill dated: 1 Mar Bill dated: 1 Apr
Payment: $2000
Principal: $500 Principal: $520

Principal Principal
Interest: $200 Interest: $180

Annual Fee: $20 Annual Fee : $20

Remainder:

Slide 10
Payment Rules

Configuring Payment By Bill – Payment Rules Product Condition

▪ Repay by bill
▪ Pay oldest bill first

▪ Pay properties in this order

Slide 108
Payment Rules

▪ Remainder Activity is Principal Decrease

Demonstration of REPAY.BY.PROPERTY Payment
Rules Product Condition

▪ View the REPAY.BY.PROPERTY Product Condition which demonstrates

Payment by Property.

Slide 109
Payment Rules

Unscheduled / Ad-hoc Payments

Properties
Payment
Principal

Principal Interest

Annual Fee

Credit Balance

Slide 110
Payment Rules

Demonstration of CURRENT.BALANCES Payment

Rules Product Condition

▪ View the CURRENT.BALANCES Product Condition which demonstrates

how to define the order in which payments are applied to properties.

Slide 111
Payment Rules Exercise (Part I)

In this exercise we will configure and execute an ApplyPayment Activity (a scheduled

repayment)

▪ Create a new Payment Rule Product Condition to pay off Billed Properties in the
following order: Interest, Principal

▪ Allocate any Remainder to credit the current Principal (use the default
PR.PRINCIPAL.DECREASE Payment Rule Activity)

▪ Create a new Payment Rule property to enable this to be added to your product
▪ Add the new Property to your Product Group, at the same time rebuilding
activities to create the ApplyPayment Activity

▪ Look at Activities to check if your new Activity has been built.

▪ Create a new Activity Mapping Product Condition to map Transaction Code 851 to
the ApplyPayment Activity you just built. Remember to also map the Disburse
Activity.

Slide 112
 ▪ Use the 2 newly created Product Conditions in your product ▪ Proof and
Publish it
▪ Create a new Arrangement with a daily payment frequency. This will ensure that
bills are generated every day, and authorise it

▪ Disburse the full value of the Loan

Payment Rules Exercise (Part II)

▪ Now we need to generate a bill for a repayment. This requires a COB (Close of
Business)1.

▪ First backup your data folder. On Windows this is contained in the T24 installation
in the xxxx.data folder, e.g. bnk.data. )2.

▪ Run a Close of Business

▪ Now view the arrangement, and notice how the activity log and bills have changed.

Slide 113
 ▪ Using FT and the transaction type ACRP Apply a Payment to the Loan which is
greater than the bill.

▪ Notice the effect on the Activity Log, the Balances, and the Bills.

Overdue

Slide 114
Overdue

Ageing status

▪ Overdue Bills age, and as they age they acquire different statuses, e.g.
Delinquent, Non-Accrual Basis (NAB), etc.

▪ Statuses are defined in a

virtual table,
AA.OVERDUE.STATUS

When does a bill change ageing status?

▪ Number of Days
▪ Number of Bills

Slide 115
 This is configurable via the Overdue Property Class
Overdue

What occurs when a Bill Ages?

▪ Notices
- Notices can be generated based on status changes

▪ Move Balances
- Move amounts to the Status Balance, e.g. make an amount delinquent.

▪ Charge
- Optional charge for aging to a new status

▪ Age all Bills

- At a particular status, e.g. NAB, age all bills (effectively the whole loan ages)

▪ Suspend Arrangement

Slide 116
 - At a particular status, suspend the Arrangement. This means stopping any
further P&L entries, and posting accruals to a special CRF category

Payment Tolerance

▪ Only age bills if overdue amount is greater than a certain tolerance

- amount
- percentage

Slide 117
Overdue
- Example Product Condition

Example

▪ A Loan should have three overdue statuses, Grace, Delinquent and NAB
(NonAccrual Basis).

▪ An unpaid bill remains due for one day, then goes into Grace status 2 days after
the due date (strictly this is at COB on the day after it is due).

▪ There are 5 days of grace, then it becomes delinquent. 60 days after becoming
delinquent (65 days after the due date), it goes into NAB status.

▪ Separate balances are maintained for Delinquent and NAB status.

▪ Notices are sent the day after becoming delinquent, then every two weeks after
going delinquent

Slide 118
Overdue –
▪ The Loan is suspended when it goes into NAB and all outstanding bills are aged
to NAB. Notices are sent weekly after that.

Slide 119
Overdue
- Example Product Condition

▪ Overdue Statuses

▪ Chasers

▪ Age all Bills

Slide 120
Overdue –
▪ Suspend Arrangement

▪ Move Balances and Effective Date

Balance Types

▪ Create Balance Types to

maintain Overdue amounts, e.g.
Delinquent Principal ▪ Balance
Prefix is the Ageing
Status, IDs IS <Ageing
Status>-<Property> ▪
Reporting Type is Contingent,

Slide 121
Overdue
Non-Contingent or None ▪ Maintain Account Balance
Activity history
- Payment Tolerance

▪ Tolerance prevents bills from ageing if within bounds

Slide 122
Overdue –
▪ Can be an amount, and Overdue does not have a currency, so
Currency can be multi-valued within the Overdue condition
Activity Classes

▪ Age
- Advance bill status based on overdue schedule
- May have associated Accounting rules
- Can be reversed or back-valued; performs accounting

▪ Issue Chaser
- Create notice based on notice days and frequency

▪ Update

Slide 123
Overdue
- Manual change to Overdue
- Can be reversed or back-valued ▪ Change Condition

- Switch Product’s Conditions based on scheduled change at Product

Level

Slide 124
Overdue –
Exercise (part 1)

Part 1
▪ Create a new Ageing Status of “DL2” (Delinquent Stage 2)
▪ Add the OVERDUE property to your product group and rebuild the Activities. ▪
Create a new Overdue Condition for your product with the following functionality:
- At the end of the day on the payment due date, if the bill has not been
satisfied, age the bill to “Grace” status. Balances are not moved
- After 4 more days age the bill to the “DEL” status and move the balances from
“Due” to “Delinquent” valued from the due date. Automatically issue a chaser
notice after 1 day, then issue 2 further chaser notices weekly
- After the third notice has gone out, age the bill to the new status of “DL2”, At
this point stop issuing notices, however do not age the balance. A new status
will need to be added to the Virtual Table, and the new Balance Types will
need to be created for the ACCOUNT and PRINCIPALINT properties. If you

Slide 125
 are sharing the training system , this would be done by the trainer in front of
the class
- Finally after 180 days of delinquency age all bills to the “NAB” (non-accrual)
status and move the balances. Suspend the arrangement ▪ Add the
OVERDUE property and the new Condition to your product ▪ Proof your
product to check for errors.

Exercise (part 2)

Part 2

▪ Publish your product

▪ Create a new arrangement and disburse it

Slide 126
Overdue –
▪ Run a COB or COBs, until the bill becomes delinquent ▪ Observe how
the activities and balances change as the status changes, and the
notices that are generated – they should appear as raw data, ready for
delivery which we will cover later.
Transaction Processing

Slide 127
Transaction Processing

Transaction

Activity Mapping

Remainder
Disburse Apply Payment Credit

Activity Restriction

Activity Messaging

Slide 128
Limit

Slide 129
Limit

Summary

▪ AA interfaces to T24 Limit application

▪ Limit Reference is stored in Limit Arrangement Condition and on the Account

▪ Arrangements can optionally be given ‘single’ (i.e. exclusive) use of a Limit

▪ Shared limits can allow netting

- Any credit balance of Arrangement is added to overall overdraft limit
▪ Limit Update Activity also causes underlying Account to be updated

Slide 130
Charges

Slide 131
Charges

Overview
There are three occasions when charges can be levied using AA:

▪ Activity Charges
- Charge applied when Activity is performed, e.g. Disbursement charge

▪ Scheduled Charges
- Charge applied on a particular day according to loan schedule, e.g. Annual fee
- Charge Payment terms
• Charges can be repaid over a period

▪ Rule breaks
- Charge applied when a rule is broken, e.g. maximum number of
disbursements per year

Slide 132
 Billing of Charges

▪ All charges are billed

- Same principles apply as for principal and interest payments.
Charges - Overview

Types of Charge
▪ Charges can be fixed (flat) or calculated
▪ Calculation attributes include:
- Free Amount
- Tiers
• Level, Banded, Groups
- Calculation Type
• Flat, Percentage, Unit
- Minimum/maximum
• overall or by tier
- Calculation Source

Slide 133
 • Balance
- Balance Calculation Type
- Calculation Source
• Transaction
- Activity Calculation Type
- Rounding
- Charge Routine
▪ The charge currency can be fixed or same as Arrangement

Slide 134
Charges – Architecture

Activity
▪ Charge details are defined Charges
centrally in Charge Property
Class

Payment
Activity Charge
Schedule
Rule Break

▪ Then utilised once, or

Periodic Rule
on multiple occasions, by
- Activities via Activity
Charges Property Class
- Payment Schedule Activity
Property Class Term Amount
Restriction
- Activities via Periodic Rules
& Activity Restriction Property Class
- Term Amount via Periodic Rules

Slide 135
Activity Charges - Overview

Activity Charges

▪ Activity Charge is a charge incurred when an Activity is performed

- Charge Property becomes Due

▪ Activity Charge Property defines Activity Charges for a Product

- All Activity Charges defined in one Property

▪ Charge can be deferred if required

Slide 136
Activity Charges - Overview

Creating an Activity Charge Six

Steps to the process:

1. Define Charge Property (e.g. Initial Fee)

2. Add to Product Group

3. Define Charge Product Condition (e.g. Charge is $500)

Slide 137
4. Add to Product – Charge now available to Product

5. Define Activity Charges Product Condition (e.g. Initial Fee applies to New
Arrangement Activity)

6. Add to Product (if not already present) – one Activity Charge Condition
covers Multiple Charges

Slide 138
Charges
- Activity Classes

▪ Change Charge
- May cause a schedule recalculation (if this is a scheduled charge)
- There will be one activity for each charge the product uses

▪ Change Activity Charges

- Reassign charges to activities

Slide 139
Charges – Example
Example 1 – Set up a initial fee of $500 for the Mortgage Product, to be
charged when the Mortgage starts.
1. Define Charge Property

▪ Descriptions

▪ Whether the charge can be suspended

Slide 140
Charges – Example

2. Add to Product Group

Slide 141
Charges – Example

3. Define Charge Product Condition

▪ Type is Fixed

▪ Set Currency

▪ Define Amount

Slide 142
Charges – Example

4. Add Charge to product

5. Create or Amend Activity Charges

Slide 143
Charges – Example

▪ New Arrangement Activity

▪ Charge Property

Slide 144
Charges – Example

6. Make sure Activity Charges are in product

Slide 145
Charges –
Exercise 1

Activity Charges Exercise

Repeat the above process for your main existing product. Please use the
existing NEWARRFEE Property and the existing ACTIVITY.CHARGES
Property.
Test that a new arrangement activity generates the initial fee.

Slide 146
Charges

Overview
There are three occasions when charges can be levied using AA:

▪ Activity Charges
- Charge applied when Activity is performed, e.g. Disbursement charge
▪ Scheduled Charges
- Charge applied on a particular day according to loan schedule, e.g. Annual fee
- Charge Payment terms
- Charges can be repaid over a period

▪ Rule breaks
- Charge applied when a rule is broken, e.g. maximum number of
disbursements per year

Slide 147
Charges
Billing of Charges

▪ All charges are billed

- Same principles apply as for principal and interest payments.
- Scheduled Charges

▪ Charges can be scheduled in advance

- Frequency, e.g. Monthly charge
- Period – between two dates

▪ Charges can be part of the annuity calculation

- each constant payment contains one or more charges as well as principal and/or
interest

▪ Charges can be calculated based on

Slide 148
- Arrangement balance
- Activity Amount
- Bank-defined Routine

Slide 149
 - Scheduled Charges

Quick quiz:
The first four steps in setting up a Scheduled Charge are identical to those
for an Activity Charge. What are they?
Answer:

1. Define Charge Property

2. Add this Property to Product Group

3. Define Charge Product Condition

4. Add Property and Product Condition to Product

For a scheduled charge, there is just one more step:

5. Enter Charge into Payment Schedule

Slide 150
Charges
Example 2 – The Line of Credit product has a quarterly maintenance fee of
5% of the current balance. This is subject to a minimum of $5 and a
maximum of $25.

Slide 151
 - Example

Charge Product Condition -

Percentage of Current Balance

▪ Amount is to be calculated

▪ Amount is a percentage of a balance

▪ Rate is 5%

Slide 152
Charges
▪ Minimum Charge is $5
▪ Maximum Charge is $25

Slide 153
Charges
- Example

Charge Product Condition (Control Tab) –

Percentage of Current Balance

The balance on which to base the calculation for the Charge Property
must be defined separately in the Product. This attribute specifies that the

Slide 154
Charges
current debit amount of this balance is to be used as the source for the
calculation.
– Example

▪ Having created the Charge Property, add it to the Payment Schedule

▪ Use the actual (i.e. complete) amount of the charge

Slide 155
Charges
▪ Make the Charge due

▪ Assess the charge every 3 months

▪ Bill the Charge separately from the principal

– Exercise 2

Charges Exercise 2a

▪ For your product, create a product condition with a negotiable

quarterly maintenance fee of $50 which can be negotiated down to
$20 but no lower

▪ Create an arrangement, and check that the charge appears correctly

in the schedule

Slide 156
Charges
Charges Exercise 2b

▪ For your product, create a create a product condition with a negotiable

1% fee for a disbursement. Create an arrangement, and do a
disbursement to get the charge to be generated

▪ Look at the Activity Log, Bills and Balances

Slide 157
Charges

Overview
There are three occasions when charges can be levied using AA:

▪ Activity Charges
- Charge applied when Activity is performed, e.g. Disbursement charge
- Scheduled Charges
- Charge applied on a particular day according to loan schedule, e.g. Annual
fee
- Charge Payment terms
- Charges can be repaid over a period

▪ Rule breaks
- Charge applied when a rule is broken, e.g. maximum number of
disbursements per year

Slide 158
Charges - Rule Break Charges
Billing of Charges

▪ All charges are billed

- Same principles apply as for principal and interest payments.
Rule Break Charges - Overview

▪ Charges can be associated with a Periodic Rule

- When this rule is broken, the charge is applied

▪ In practice used mostly for transaction charges

- Set up within Activity Restriction
- Transaction charge is applied subject to the Periodic Rule

▪ Can also apply to Term Amount

- A charge could be assessed for changes to the amount or term

Slide 159
Charges - Rule Break Charges
Example
Personal Loan incurs a fixed charge of $250 for a principal decrease in the first
year.

▪ Specify Principal Decrease Activity

- recall this is a payment with rules to specify that the principal is to be debited

Slide 160
Charges - Rule Break Charges

The Charge is specified here

- Enter the Charge Property
The details of the fee are then defined as a Charge Product Condition as before.
Now both the Charge and the Activity Restriction are added to the Product.

Slide 161
Charges - Rule Break Charges

Slide 162
Example 3 - The Small Business Loan Product has a tiered initial fee, which
depends on the amount of the loan. The amounts are as follows:

Commitment Amount Fee

Up to $50,000 $100

Over $50,000 and up to $250

$250,000

Over $250,000 $500

Slide 163
 -
Example
Charge Product Condition -
Level Flat Fee with Threshold

▪ Tiers are level

▪ Flat fee
▪ Charge Amount

Slide 164
Charges -
▪ Balance Amount
Charges Example

Charge Product Condition (Control Tab) – Level Flat Fee with

Threshold

▪ If Loan is under is 5,000, do not assess a charge

▪ Use Current Balance

Slide 165
 -
Tiers

Tiers
There are two types of tier, level and banded:

▪ Level – Whichever tier the amount falls in, take that as the full amount of
the charge.

▪ Band – Accumulate the amount from each tier.

Tier Groups

▪ Tier Group – Set of adjacent tiers. ▪

Two options for tier groups:
- Levels – Treat each group of tiers as a level
- Bands – Treat each group of tiers as a band

Slide 166
Charges

Example 4 - The Line of Credit Product has a complex fee structure for
disbursements, as follows:

Disbursement Amount Fee

up to $500 $5

Over $500 and up to $5000 $10

Over $5000 and up to $25000 An additional 0.2% of the amount

over $5000
Over $25000 An additional 0.1% of the amount
over $25000
Example
Charge Product Condition –
Mixed Tiers with Flat and Percentage Fees
Slide 167
Charges

▪ Each group of tiers acts as a band

▪ Charge amounts within a band are a sum of the amounts of lower bands
▪ This band has:
- $10 from the lower tier group
- 0.2% of the current tier amount

Slide 168
Charges -
- Example

Charge Product Condition (Control Tab) – Mixed Tiers

with Flat and Percentage Fees

Specify the Activity Calculation Type as the transaction amount. This is the
only pre-defined Activity Calculation Type.

Slide 169
Charges
– Exercise 3

Charges Exercise 3 – Tiers

▪ For your product, create a new arrangement fee with the following
rules, based on the amount of the loan:
- Less than $2,000 – no charge
- $5,000 and over up to $20,000 – 0.5% of total amount
- Over $20,000 – an additional 0.2% of amount over $20,000

▪ Create a New Arrangement Activity but do not commit, instead try

validating with different amounts of $1,000, $10,000 and $40,000. ▪
When you get an override look at the details of the charge. The first
amount should not generate an override, the second and third should
raise an override for $50 and $140 respectively.

Slide 170
Changing Products -
Changing Products

Slide 171
 Overview

Overview

▪ Existing Arrangements can change to a different product

- This can be done manually or can be scheduled
▪ Majority of conditions are overwritten by the new product defaults.
- Exceptions are: Customer, Account, Term Amount and Limit. So for
example Term of old product remains the same as from previous product

▪ Change Product Property Condition determines which product switches are

allowed.
Example
The bank wishes to launch a special introductory offer on its mortgage product.
The offer applies for a year at which point the mortgage reverts to the Standard
Mortgage. In the last five days before the product switch, it will be possible to

Slide 172
Changing Products -
make any amendments to the Arrangement Conditions prior to the new product
taking effect.
At any point in the life of the mortgage it will be possible to switch between the
Standard Mortgage and the Seasonal Mortgage products. However having
switched out of the offer conditions it will not be possible to switch back.

Slide 173
Changing Products -
Example

▪ Specify product to switch to

▪ Period after which switch occurs

▪ Change Product Activity will be executed 5 days prior with effective date
equal to anniversary date

Slide 174
Changing Products -
Example

▪ Products that Arrangements can switch to

- Manually or automatically

▪ Move date forward if scheduled change is on a non-business day

Slide 175
 - Business Days attribute allows countries other than that of the currency to be
specified

Change Product - Activity Classes

Change Product

▪ Changes the Arrangement’s Product

▪ This activity class actually belongs to the Arrangement, not the Change
Product Property Class

Update Change Product

▪ Change the products to which it is permitted to switch

Slide 176
Changing Products -
▪ Normally this is a product level class and will be tracked, so not
expected to be run by the user

Slide 177
Change Product Exercise

Exercise

▪ Use one of the additional products you created earlier to practise changing
products

▪ Make the conditions for your second product different from the first, i.e. revert
them to the original conditions from model bank to as they were when you
started the exercises, namely
Property Condition Arrangement Link
ACCOUNT PERSONAL.LOAN NON.TRACKING
COMMITMENT LOAN NON.TRACKING
PRINCIPALINT PERIODIC.RATE.MARGIN NON.TRACKING
REPAYMENT.SCHEDULE CONSTANT.WEEKLY NON.TRACKING
▪ Configure the system to allow changes between the two products
▪ Create an arrangement for one of the products
▪ Manually run the Change Product Activity

Slide 178
Activity Presentation
▪ Notice what happens to the attributes in the various properties, especially in
Account, Term Amount, Principal Interest and Payment Schedule

Activity Presentation

Slide 179
Overview

▪ Arrangement Activity screens are made up of a number of Versions – one

Version per Property of the Arrangement. e.g. Payment Schedule has its
own Version, Principal Interest another and Penalty Interest a third.

▪ Activity Presentation specifies which Version to use to display each

Arrangement Condition.

▪ AA also lets you specify different Versions for each Activity, e.g. a special
version to use when increasing the commitment amount. ▪ In theory you
can specify one Version for each Activity in each Product – however in
practice you would not want to create and maintain this many links. So there
are ways to organise and manage your Versions.

Slide 180
Activity Presentation

Versions can be assigned to:

▪ Property Classes

▪ Properties
- If assigned to both the
Property and Product Class,
the more specific (i.e.
Property) takes precedence

▪ Activities
- If assigned to both the Activity
and either Product and/or
Product Class, the most
specific (i.e. Activity) takes
precedence

Slide 181
Activity Presentation

Product

Property Class Version1

Property Version2
Property
Property

Activity
Activity Version3
Activity
Activity Version4
Version

Slide 182
Activity Presentation

Activity Presentation is a
“merged” Property Class

▪ If Activity Presentation is
specified in a parent
product and its child, then
both Conditions are used
in the Arrangement.

▪ The Version to be used is

taken from the child. If it is
not present in the child, it
is then taken from the
parent. Thus the Versions
from the child and those
from the parent are
“merged”.

Slide 183
Activity Presentation

▪ In a multi-level hierarchy,
this process continues to
grandparents, etc.
Combining these two levels of
specification, T24 will adhere
to the following order of
precedence (starting with the
most and ending with the
least specific) to determine
the screen to display for each
Activity:

Slide 184
Activity Presentation

Assume for example that

Version1 is specified for the
Car Loan Change Principal
Interest Activity, and Version2

Slide 185
Activity Presentation

for the New Car Loan Interest

Property. Then when
changing Principal Interest for
a New Car Loan
Arrangement, it is Version2
that will be used.
Example
A product requires the
following:

▪ Use the core versions for

all the Property Classes
▪ Use a different version for
the Maintenance Fee

Slide 186
Activity Presentation

▪ Use a different version for

Penalty Interest
▪ Use a different version for
the Increase and Decrease
Commitment Activities.
For the Increase
Commitment Activity, use a
different version to display
the repayment schedule.

Slide 187
Activity Presentation

Solution

Slide 188
Activity Presentation

▪ Versions for Property Classes

Slide 189
Activity Presentation

▪ Different Versions for

Properties
▪ Different Versions for
Properties in Specific
Activities

Slide 190
Activity Presentation Exercise

▪ Create a new Activity Presentation Product Condition ▪ Use the following

versions:
Property Class/Property Condition

CUSTOMER AA.ARR.CUSTOMER,AA.SIMPLE

TERM AMOUNT AA.ARR.TERM.AMOUNT,AA.SIMPLE.PA

PRINCIPALINT AA.ARR.INTEREST,AA.PERIODIC

DISBURSEMENTFEE AA.ARR.CHARGE,AA.CALCULATED

▪ Add this to your child product, so that it overrides the versions defined in the
parent

▪ Proof and publish your product

▪ Create an Arrangement and examine the new versions

Slide 191
Activity Messaging

Slide 192
Activity Messaging - Overview

Overview
▪ Activity Messaging specifies which advices to use for activities
- Links Activity Class or individual Activity to an advice in EB.ADVICE

▪ “Merged” Property Class like Activity Presentation

- i.e. some advice links can be specified in a parent and others in a
child ▪ If Advices are specified for both a Property and a Property
Class, the more specific, i.e. the advice for the Property, takes
precedence

▪ When Activity is executed, advice is created in the DELIVERY application

with the relevant data fields populated

Slide 193
Example
In the following example we will see various advices set up for a product
by Property Class. The exception is that the advice created when a bill
goes into NAB status will be different from those generated when it goes
into other statuses.

Slide 194
Activity Messaging - Example

▪ Advices for Property Classes

Slide 195
 ▪ Advice for NAB status different from other Overdue statuses
Activity API

Slide 196
Activity API

Overview
▪ Activity API is for core process extension - User-defined routines

▪ Routines associated with Activity Classes or specific Activities

▪ Granularity is at the Action level

- Processing can be defined pre- and post- each action. Code will be
executed in the following order:
• Pre Routine
• Action
• Post Routine

▪ Certain Activity Classes allow routines to act on other Properties - e.g.

Update Payment Schedule Activity can act on Interest or Account (i.e.
principal)

Slide 197
Activity API

Defining Routines at Multiple Levels

▪ If routines are specified for both a parent and a child product, then
both routines will be executed.

▪ Similarly if routines are specified for both an Activity Class and an

Activity, then both routines will be executed

▪ Order of execution is least specific to most specific, i.e. parent product

then child product. Within each product, the order is Activity Class
followed by Activity.
- e.g. if I have routines for Personal Loan Update Interest, Personal Loan
Update Principal Interest and Loan Parent Update Principal Interest, then
the execution order will be:
1. Loan Parent Update Principal Interest
2. Personal Loan Update Interest
3. Personal Loan Update Principal Interest

Slide 198
Activity API

Example
Run user-defined routines prior to and after an Interest Condition is
changed

▪ Activity Class is LENDING-UPDATE-INTEREST

Slide 199
Activity API

▪ Property Class is INTEREST

▪ Action is UPDATE

▪ Routines are defined here

Slide 200
Thank You

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