Decision Engine vs Rules Engine

Decision engine is a subset of rules engine. Rules engine describes a class of decisioning systems that follows prescribed rules or directions to render a logical or mathematical conclusion.

Rules engines are everywhere and it may not be obvious to us that they are running in the background and embedded in all kinds of technology to help guide us and make decisions for us.

Examples of rules engines in action

A simple example of a rules engine is backbones of a variety of kiosks we interact with just about everywhere. When you order fast food at a restaurant, sometimes you encounter a vertical computer screen that you can order food from a menu and checkout when you are done. These ordering obelisks will spit out a receipt or an order number to match to the processing number of the food being prepared. 

The ordering kiosk follows a set of workflows or rules to help you get to your final decision point which is to pay for your order and produce an order number as a receipt to receive your food.

Another example of a simple rules engine is traffic lights. The traffic lights system is organized and directed by a rule engine. Sometimes the traffic lights system gives traffic direction based on time and tempo, sometimes it is based on actual traffic patterns. Either way, the automated decision is based on certain input from a time color or from sensors embedded in the road or from its camera detection system.

Decision Engine Examples 

A decision engine is also a rules engine. Some might argue that a decision engine is a subset of a rules engine. A rules engine is called a decision engine in the context of commerce, finance, banking or payments.

A decision engine embedded in an e-commerce system could be a series of rules running in the background when you are searching or ordering a product. It could serve as a recommendation engine based on your previous purchase history or a suggesting other products that pairs well with the product you are interested in to generate more sales from you. 

Whatever the case might be, the decision engine is helping you to make a decision to purchase or have made a decision on your behalf and constrained you in the confines of an already made decision. 

Decision engine in banking or finance could take information you’ve supplied to the bank and other information sources such as a credit bureau report or an income statement to help the banks make a financial decision to create an account for you or approve a line of credit for you.

A payments system also uses a decision engine to approve or decline a transaction based on information it receives. From time to time and we all might have experienced this before, our credit card transaction may have been declined.

You can imagine that it is impossible for human beings to monitor every single credit card transaction. These transactions are being monitored and examined by payment processors' decision engines.

Sometimes these transactions are declined because you’ve spent over your credit limit. Other times, the decision engine may think your credit card has been compromised and stops all further transactions before authenticating that you meant to use this credit card at this location with this merchant.

Decision Engine vs. Rules Engine

From an architectural perspective, decision engines and rules engines are the same. They both operate on basic logical and mathematical principles. They both use if, then, else logic to process information and render a decision.

A rules engine might render a single decision, turning lights green, yellow or red. A decision engine may have a variety of outcomes that trigger other interactions which might require human intervention and be linked to other decision points.

From an usage and context perspective, when someone refers to a rules engine as a decision engine, it is usually in the context of commerce, finance, banking and payments. A rules engine is generally described as a business rules management system or BRMS that may not need to make a decision within milliseconds such as payment processing fraud detection decision engine.

We hope this shed some light on the differences between a decision engine and a rules engine. To explore a full function decision engine that banks and financial institutions use, please visit www.lendapi.com and sign up to take a look at a credit decision engine.

We have other article for you to look through if you are interested in learning more about credit decision engines:

From Data to Decision: Understanding Credit Decision Engine Algorithms

The Power of Credit Decision Engine: A Comprehensive Guide

Credit Decision Engine: Do's and Don'ts

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