Product Commission

Online commissions can be triggered based on AA.ACTIVITY from any of the Product Lines, such as Lending, Accounts, Deposits, Safe Deposit Box and External Product Lines.

• Configuration allows the user to define the commission to be paid specific to an individual:
  • Product Line—Defining a Product line is the highest level of configuration. Based on the activities, all Product Groups and Products under this line become valid for commission payments.
  • Product Group—By defining a Product Group, the Products in the Product group and its configured activities are utilised for commission payments. This configuration takes precedence over a Product Line configuration.
  • Product—By defining a specific Product, the activities configured in the Product are honored and utilised for commission payments. The system ignores any other configuration, if the selected Product is mapped to a previously defined Product Line or Product Group.
• From the above multivalue set of attributes, any financial activity can be specified to trigger agent commission.
• The Property associated with the financial activity is linked to Charge Condition.
• Based on the multivalue attributes, an activity can be specified that when triggered a partial clawback based on the associated defined financial activities is calculated.
• Commission can be a one-time fee or a scheduled fee and can be amortised over the life of the contract. The user can also claw back a percentage of the commission if the contract is pre-closed before the contract period.
• The Online Charge attribute is used to define the commission Charge Property and is linked to the activity that triggers it.
• The user can defer commission calculation for a predefined number of days after completion of the online activity. For example, commission is calculated and paid to the agent after 7 days of full disbursement of loan.
• To achieve deferring of commission calculation, the Defer Days attribute, which is part of the online commission multivalue set, defines the number of days from the online activity or financial event after which the commission is calculated and paid out.
• If the bank wants to clawback commission, the commission paid earlier is recovered from the agent in case of early termination of the financial arrangement, loan or deposit.
• For clawback of commission, the user indicates the activity and the commission to claw back in the Product Commission Property Class.
• The user creates the Drawback Type attribute to achieve clawback of commission.
• The Drawback Type attribute has the following values:
  • None – No clawback is required, unamortised amount is booked to PL.
  • Full – Clawback of the entire original commission amount is executed.
  • Partial – Clawback is restricted to unamortised commission.

An example of the Online Product Commission configuration is given below.

The above configuration functions as follows:

• When the agent sources a Product under the Lending Product Line,
  • LENDCOMMISSION is paid upon full disbursement. The commission is calculated after 15 days, based on the value available in the Defer Days field.
  • LENDCOMMISSION is paid upon increase in commitment. The commission is calculated immediately as there is no value available in the Defer Days field.
  • LENDCOMMISSION is partially clawed back when the loan is paid off before maturity, when the Drawback Type field is set to Partial.
• When the agent sources a Product under the Mortgage Product Group,
  • MLCOMMISSION is paid upon full disbursement. There is no value defined in the Defer Days field and the commission is calculated and paid immediately.
  • MLCOMMISSION the full amount is clawed back when the loan is paid off before maturity and the Drawback Type field is set to Full for this commission type.

When commission has to be paid on a scheduled manner, then a schedule name, frequency and the commission to-be-paid has to be specified.

• The same concept as detailed above for online commissions can also be defined for scheduled commissions, to ensure that the Product Line, Product Group or Product-specific configuration is achieved.
• Configuration allows the user to define the commission to be paid can be specific to an individual:
  • Product Line—Defining a Product Line is the highest level of configuration. Based on the activities, all Product Groups and Products under this line are valid for commission payments.
  • Product Group—By defining a Product Group, the Products in the Product group and its configured activities can be utilised for commission payments. This configuration takes precedence over a Product Line configuration.
  • Product—By defining a specific Product, the activities configured for this Product can be honoured and utilised for commission payments. The system ignores any configuration if the same Product falls into a previously defined Product Line or Product Group.
• From the above multivalue set of attributes, any financial activity can be specified to trigger agent commission.
  • The property associated with the financial activity is linked to the CHARGE condition.
  • Based on the multivalue attributes, when an activity specified is triggered, a partial clawback, based on the associated defined financial activities, is calculated.
• Scheduled commissions uses all attributes of the Linked Int Property (for example, Interest Basis, Source Type, Source Balance, etc.,) except the Rate and Period attributes. The rate is taken from the Commission (Charge) Property and the period is based on the scheduled commission frequency. It honours AA.SOURCE.CALC.TYPE (like CR.DAILY and CR.AVERAGE) and any AC.BALANCE.TYPE that the Interest Property is linked. The calculation is an interest type calculation with rate from the Commission Property.
• The Line, Group and Product attributes define the level at which the commission is configured.
  • The Line attribute can be Account, Lending or Deposits only.
  • The Group attribute must be a valid AA.PRODUCT.GROUP record.
  • The Product attribute must be a valid AA.PRODUCT record.
• The Schedule Name attribute accepts only a valid record from the EB.LOOKUP – AA.AGENT.COMMISSION.FREQUENCY table. The frequency of commission payment is defined using the Schedule Frequency attribute.
• The user enters Charge Property in the Schedule Charge attribute and defines the Property type as Commission.
• An example of Scheduled activities is given below. This is the Product Condition created for the Product Commission Property Class.
• The user can configure the scheduled agent commission to be paid out on a regular interval by defining a frequency in the Product Commission Property Class, in the agent Product. The cycling of schedule dates can be either on the agent arrangement or on the financial arrangement.
• To decide the base date for a scheduled agent commission, the user can choose either financial arrangement’s base date or the agent arrangement’s base date.
• The Base Date drop-down field is available in the Product Commission Property Condition. The user can assign a base date for cycling the schedule on the financial arrangement, the user can select the arrangement option. If the user selects blank, then the schedule will be based on the agent arrangement.
  

The above screenshot displays a sample Scheduled Product Commission configuration.

The above configuration functions as follows:

• When the agent sources any Product under the Mortgages Product Group, MLPERIODICCOM is paid, which is,
  • Set to a yearly frequency.
  • Calculated on the same balance defined in PRINCIPALINT.

• When the agent sources any Product under the Lines of Credit Product Group, LOCPERIODICCOM is paid, which is,
  • Set to a monthly frequency.
  • Calculated on the same balance defined in PRINCIPALINT.

• When the agent sources the Deposit Long Product, DEPPERIODICCOM is paid, which is,
  • Set to a monthly frequency.
  • Calculated on the same balances as defined in DEPOSITINT.

• When the agent sources any Product under the ACCOUNTS Product Line, ACCTCOMMISSION is paid, which is
  • Set to a yearly frequency.
  • Calculated on the same balances as defined in CRINTEREST.