  XMM-Newton has produced an extensive X-ray source catalogue in which the
standard pipeline determines the variability of sufficiently bright sources
through chi-square and fractional variability tests. Faint sources, however,
are not automatically checked for variability, thus overlooking faint, short
timescale transients. Our goal is to find new faint, fast transients in
XMM-Newton EPIC-pn observations. To that end we have created the EPIC-pn
XMM-Newton Outburst Detector (EXOD) algorithm, which we run on the EPIC-pn data
available in the 3XMM-DR8 catalogue. In EXOD, we compute the whole-field
variability by binning in time the counts in each detector pixel. We next
compute the maximum-to-median count difference in each pixel to detect
variability. We applied EXOD to 5,751 observations and compared the variability
of the detected sources to the standard chi-square and Kolmogorov-Smirnov (KS)
variability tests. The algorithm is able to detect periodic and aperiodic
variability, short and long flares. Of the sources detected by EXOD, 60-95% are
also shown to be variable by the chi-square and KS tests. We obtain a net
number of 2,536 variable sources. Of these we investigate the nature of 35
sources with no previously confirmed classification. Amongst the new sources,
we find stellar flares and AGNs; but also four extragalactic type I X-ray
bursters that double the known neutron-star population in M31. This algorithm
is a powerful tool to promptly detect variable sources in XMM-Newton
observations. EXOD detects fast transients that other variability tests
classify as non-variable due to their short duration and low number of counts.
Finally, EXOD allows us to detect and identify the nature of rare compact
objects through their variability. We demonstrate this through the discovery of
four extragalactic neutron-star low mass X-ray binaries, doubling the number of
known neutron stars in M31.
