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Setting Up Products

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In this article we will cover:


Things To Consider When Setting Up Products

How Many Products Should I Set Up?

  • The objective when setting up products is to choose a small set that represents most of the bank’s business.
  • Be careful not to create too many products because the list can become overwhelming, making it difficult for a lender to know what to choose when pricing a deal and prohibit them from moving quickly.
  • Additionally, a larger list of products will prove more difficult to manage over time especially if they are customized by region.


How Should I Choose The Defaults?

  • When setting up Defaults think of the loan structure that will reflect the most common way your bank structures that type of product. This will eliminate a few keystrokes for lenders as they input deals.


What Information Will I Need To Set-up A Product?

  • For each product, the system administrator, with help from credit and finance experts, will need to:
    • Know credit and capital assumptions for each risk grade.
    • Define the overhead costs for the origination and servicing channels.
    • Define the collateral types with default LTV and recovery factors.
    • Define prepayment options.
    • Define guarantee types with recovery amounts.
  • Much of this is driven by the RiskCalcs analysis and the Credit Migration data.


How Will My Products Affect Relationship Awareness?

  • If your institution has elected the Relationship Awareness module, the products created in PrecisionLender will be the only types of products that are mapped over from your core system.
  • Additionally:
    • The risk ratings must be consistent throughout all commercial products.
    • The origination channel names must be consistent across all commercial products.
    • The servicing channel names must be consistent across all commercial products.
    • The collateral types need to be consistent across all commercial products.
      • If you choose to include collateral in you core data files, there will be some collateral types that you want in PrecisionLender for calculating strategic return but do not want to include as collateral types a lender can choose on new opportunities. In this case, the collateral types can be arranged so that these are at the bottom of the list. Conversely, if they are not included, they will not be mapped over from the core.



Types of Products

  • Commercial Loan Products - Individually priced within an Opportunity and/or used as the basis of generating a Rate Table within a Rate Sheet.
  • Consumer Loan Products - Used as the basis of generating a Rate Table within a Consumer Loan Rate Sheet. 
  • Deposit Products - Used to capture the pricing attributes of Deposit Products (CDs, DDAs or Money Market products).  
    • Can be individually priced within an Opportunity as well as being used as the basis for a Rate Table within a Deposit Rate Sheet.
    • For more information see: Setting Up Deposit Products.
  • Other Products - Typically Fee-based products or services such as Treasury Services, Insurance, etc.  


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