The banking industry is ever-evolving and one of the successful implementations of technology in the banking sector is the AI-automated bank statement analyzer. This automated bank statement analyzer tool helps lenders to evaluate credit applications faster, and help lending institutions give loan to borrowers who can repay the loan. Having discussed automated bank statement analysis, let us move the discussion on why bank statement analysis is required.
What is the requirement of Bank Statement Analysis?
- Underwriting: Underwriting is a process where an organization gives a loan in exchange for a premium. Before that, banks and financial institutions carry out a background check on a borrower and determine whether they are worthy of underwriting. The bank statement analyzer tool helps the loan sanctioning organization to get a detailed idea about the assets that the borrower has and whether the person can repay the loan on time. A bank statement helps such organizations to get an income verification of the borrower.
- Loan approval: A banks statement analysis helps loan sanctioning organizations to identify such borrowers who have a bad credit history and those who often default on repayment of the loan so that organizations can blacklist them. So, the borrower has to prove his/her credibility by such the required documents which undergo a financial audit. With the help of a bank statement, the source of income, annual earnings, and liabilities of the borrower are determined so that the loan can be approved and disbursed accordingly.
- Identification of fraudulent transactions: When an organization is doubtful if fraudulent transactions are being carried out, it can conduct a bank statement analysis of its vendors or other parties. It helps in proving the credibility of bank statements that have been furnished in PDF form, thus eliminating the chances of tampering with the bank statements done with an intention of cheating.
- Income tax filing: Bank statement analysis is needed for ITR filings and income tax returns. These tax calculations help an individual in getting an estimate of how much taxes are paid by individuals per year, which helps in determining if the transactions are genuine.
- Identification of the red flags: A bank statement analyzer tool helps to identify certain red flags such as high cash deposits and cash withdrawals, crossing the limit of overdrafts, identifying the negative balances, bouncing of cheques, etc. If such elements are present in a person’s bank statement, it is indicative of the deteriorating financial health of the individual.
- Identification of transaction patterns: Patterns of banking activities can be derived with the help of bank statement analysis. This can help in the prediction and forecasting of banking activities like bank deposits, withdrawals, overdrafts, etc.
Challenges faced while conducting Bank Statement analysis
- Lack of uniformity: The bank statements obtained from different banks lack uniformity in terms of content, format, and narration. This can be challenging while analyzing the bank statement.
- Different file formats: Bank statements can be in the form of PDF, scanned images, or XML files. It can be challenging to analyze the bank statements in the form of these different file types. The consolidation of the bank statements in different formats can be challenging when done manually.
The Solution – An Automated Bank Statement Analyzer tool
The automated approach of doing bank statement analysis and the use of powerful techniques by Perfios helps in analyzing the bank statements and the organization uses a learning engine that gives real-time analytical capabilities. As the process is automatic, the bank statement analysis provides a customized output that gives information about the balance, bounced cheques, banking services charges, recurring income, and expenses, overdrafts, etc. There is no chance of error that can arise when there is any involvement of manual work. This ensures an error-free analysis of the bank statement. The automation of the process help organization in doing away with several painful and time-taking activities like physical collection of the documents, high manual work, and slow turnaround time. The process is fast and robust, thus giving customers a feeling of satisfaction. As the system is automatic, it reduces manpower, which can be used for other core activities, thus ensuring that the productivity of the organization is improved.
Why is the need for An Automated Bank Statement Analyzer tool?
The success of a lending financial institution depends on the presence of a streamlined and organized business model where the assets of the institution are taken care of and the manpower is utilized in performing the core activities. There can be no room for mistakes or bad deals as the competition is so fierce that a single mistake can cost a client, especially in a scenario where getting the clients on board and retaining them is becoming such a tiring task.
This creates the need for an automated bank statement prepared with AI tools. These tools can analyze the bank statement faster than a human. The entire process is smooth and the obtained result is error-free. Once the bank statement analysis has been obtained, now financial institutions can decide whether the loan can be sanctioned and it can work on the next steps of customer onboarding with improved underwriting rates.
Benefits offered by an Automated Bank Statement analysis
- Extraction and analysis of customer’s financial worth in real-time
- Optimized and cost-effective lending process
- Elimination of time-consuming manual verifications
- Automatic identification of income and expense patterns
- Customized options for establishing personalized ratio analysis
- Segregated information about banking elements
Borrowers can take the help of a p2p lending platform that can ensure a smooth transaction process between the lender and the borrower. Even investors can benefit from such platforms which offer a well-researched financial insight to the investors to invest the loan amount in such a venture that provides them least risk-free lending and also advise how to increase their resource efficiency, how to lower the risk, and how to maximize the financial returns. In this way, these p2p lending platforms help borrowers as well as investors.