Commissions

Commissions are the fees taken by the bank for offering a product or service such as opening an account, for cash withdrawals, for transfers, for making payments in certain countries, for exchanging currencies, for emitting debit cards, for handling documents etc. These commissions vary from bank to bank, based on their policy. Innovation Studio has a dedicated menu for managing commissions in order for a bank to build its network of commissions. These commissions are grouped into lists and attached to banking products, so they reach the contracts.

To manage commissions:

  1. Log into Innovation Studio.
  2. Click the main menu icon at the top left corner.
  3. In the main menu, expand Product Factory-> Banking Product Dimensions.
  4. Click Commissions to open the Commission List page.
  5. In the Commission List page, you can:
    • Add a new commission by clicking the Insert button at the top right corner of the page.
    • Edit an existing commission by double-clicking it.
    • Delete a commission by selecting it and clicking the Delete button at the top right corner of the page.

The Edit Commission page allows you to configure commission settings.

IMPORTANT!  
The value of a commission used in active contracts cannot be edited. Instead, you can modify the value's validity and add a new value with a future validity period. For details, see the Editing The Value Of A Commission Already In Use section.
HINT  
Read about how and when to use commissions based on their periodicity type on the dedicated Commission Definition Best Practices page.

Adding Commissions

To create a new commission, click the Insert button on the top right side of the page. In the newly opened Add Commission page, fill in the following fields from the Commission section:

Field Data Type Details
Name Text Enter the name of the commission.
Commission type Option set

Choose one from the following:

  • Administration Fee

  • Commission Undrawn Amount (overdraft) Monthly

  • Commission Undrawn Amount (overdraft) Once

  • Commission Unusage Monthly
  • Commission Unusage Once
  • Commission Usage Monthly
  • Commission Usage Once
  • Front-end Fee
  • Management Fee
  • Payment Holiday Fee
  • Repayment Fee
  • Return Fee.
IMPORTANT!  
The types have a periodicity already set: once/ monthly/ trimester etc.
Periodicity type Option set Automatically filled-in when you choose the commission type.
Status Option set Select either Active or Draft to enable or disable the commission.
Currency Option set Select the currency of the commission from the drop-down.
Is For Unusage Boolean Select this checkbox if the commission is applied for amount unused from the contract's amount. Usually this commission is applied for unused overdraft amounts.
Commission value is percentage Boolean Select this checkbox if the commission is measured by percentage, not as a fixed value.
Commission percent applied to Option set

Only displayed if you select the checkbox next to the Commission value is percentage field. Choose one of the following:

  • Remaining value - the percentage applies to the contract's remaining to be repaid value .
  • Financed value - the percentage applies to the contract's financed value.
  • Paid value - the percentage applies to the anticipated payment performed on the contract.
  • Unused amount - the percentage applies to the contract's unused amount from the granted value.
  • Used amount - the percentage applies to the contract's used amount from the granted value.
  • Overdraft limit amount - the percentage applies to the contract's overdraft limit amount.
  • Amount - the percentage applies to the contract's amount.

For Term Loan, Mortgage or Overdraft banking products the calculation method is as follows:
If percentAppliedTo = financedAmount, then financedAmount = amountDue - advanceAmount;
If percentAppliedTo = amount, then financedAmount = amountDue;
If percentAppliedTo = remainingValue, then, if Contract Status = ContractVersionDraft, then financedAmount = (-1) * mainBankAccountBalance. No negative values are allowed, so if the result is negative, then financedAmount = null.
Default value financedAmount = null.

For Current Account with Overdraft banking products the calculation method is as follows:
If percentAppliedTo = overdraftLimitAmount, then financedAmount = overdraftLimitAmount;
If percentAppliedTo = usedAmount, then if (periodType == Once), financedAmount = overdraftLimitAmount - availableAmountForOverdraft, else financedAmount = null.
Default value financedAmount = null.
Is included in repayment schedule installment Boolean If true and the Periodicity Type is not Once, the commission is included into the Repayment Schedule (should be provided with a column where to put this Commission).
Automatically load on contract Boolean Select this checkbox if the commission should be automatically loaded on the contracts based on banking products using this commission.
Mandatory for applicant Boolean This checkbox makes the commission mandatory to be paid by a customer. If the bank negotiated with a customer to not pay this commission, put the value zero.
Use Banking Formula Boolean Select the checkbox if the commission is to be defined with an attached business formula for value.
Is For Contract Version Boolean Select the checkbox if the commission is applied when a new version of the contract is created.
NOTE  
If a version for a contract is created more than once on the same day, then all commissions with Is For Contract Version = True that were not notified yet for each previous version are deleted. At the end of the day, there is only one commission for the latest version.
Is Return Boolean This field is only visible and true if Commission Type = Return Fee. Automatically filled-in when you choose Commission Type = Return Fee, read-only. The selected checkbox means that the commission is a return fee, a commission to be paid back to the borrower following a Returned Amount or Goods event on a loan or mortgage contract. Read more information about return fees.
Is Returnable Boolean This field is only visible if Commission Type = Front-End Fee. Select this checkbox if the commission can be paid back to the borrower following a Returned Amount or Goods event on a loan or mortgage contract.
Banking Formula Type Lookup Select the banking formula type to be used for commission calculation. This field is visible and mandatory to be filled in when Use Banking Formula = True.
IMPORTANT!  
Select CommissionFormula banking formula type for the Return Fee commission type. Thus, at banking product definition level, you can select ReturnCommissionFormula in the Banking Product Formulas section of the Risk Formulas tab.
Used in Returned Amount or Goods events on a loan or mortgage contract, this dedicated formula's result = (SUM of all Front-End Fee type commissions with Is Returnable = True)*[(Returned amount)/(Loan amount)].

Click the Save and Reload button at the top right corner of the page.

In the Commission value section, insert or delete the values of the commission.

To add a new commission value, click Insert and fill in the following fields in the newly opened Commission page:

Field Data Type Details
Commission percent Numeric The percent representing the commission. If the commission percentage > 100, Banking Product Factory displays a warning message: "Make sure percent value is accurate."
Commission value Numeric The value of the commission.
Valid from Date Select the day when the commission value becomes applicable.
Valid to Date Select the last day when the commission value is applicable.

Click the Save and Close button at the top right corner of the page.