The way organizations maintain and process financial statements is being transformed by automation. The banking sector is increasingly competitive, and internet banking is replacing paper-based statements to increase consumer satisfaction and enable instant access to premium services. Electronic statements help prevent identity theft and fraudulent transactions and provide convenient access to entire lists of transactions.
Robotic Process Automation (RPA) and Optical Character Recognition (OCR) are at the cutting edge of bank statement processing technologies. According to statistics, 35% of financial institutions are seeing a 2 to 5% gain in revenue by adopting bank statement extraction software into their bank statement processing procedures. Companies can no longer ignore the implementation of bank statement extraction software for customer onboarding and underwriting.
What to look for in bank statement extraction software?
Whether you want to parse a PDF, turn your extracted bank statement into an excel spreadsheet, or share it with third-party vendors for financial reporting, bank statement extraction software can optimize your accounting routine and adapt to your different use cases.
The factors worth considering in bank statement extraction software are:
- Capabilities for document classification
On a daily basis, underwriters receive a wide range of paperwork. Not all of them are bank statements, and your bank statement extraction software should be able to detect and classify them as such. After witnessing them during the upload process, your automated bank statement processing software should be able to transfer extracted bank statements to the appropriate department.
- Format versatility
The bank statement extraction software should be adaptable to a wide range of file formats. Your platform of choice should be able to read PDF bank statements and scanned photos and extract data from various file types.
- Quickness and precision
It is not worth it if the software is slow and creates downtime or delays in your accounting activities. You should search for speed of processing in your bank statement extraction software. Your program should be able to handle enormous amounts of data and process it in a short period.
You don’t want to forgo precision in order to gain speed. All the information gathered from your statements should be correct, with no missing values.
- Cloud compatibility
Cloud support facilitates the backup and storage of bank statements online. You should be able to share and securely save your extracted statements with other departments. This is made feasible through cloud support, which does not compromise data privacy or integrity.
In this digital age, users are concerned about increasing cyber risks. A bank statement extraction software should limit individual access privileges and make data accessible only to authorized users. Again, tracking technologies that monitor account activity over the network and notify users of unwanted data requests are required. In industries as sensitive as banking and financial services, fine-grained security is one of the most important features of cloud-based bank statement extraction software.
Here are some industries that widely use bank statement extraction software.
Address verification during customer onboarding is the most prevalent use case for bank statements. Clients are requested to submit evidence of address when opening a bank account to verify where they live. Aside from utility bills, house permits, and other documents, bank statements are accepted as proof of residency. Bank statements are used to confirm the address. It is basically less than 90 days old. Businesses can use bank statement extraction software to automatically process bank statements to extract the account owner’s name, address, and issue date to validate their address.
Realtors or mortgage lenders frequently request applicants to present bank statements to ensure that they have enough money in their accounts to fulfill their monthly payments and fund a down payment. However, digitizing every item on a bank statement can take a long time. A bank statement extraction software may then simply extract the necessary information for businesses to assess the financial stability
Besides using bank statements as evidence of address for client onboarding, insurance companies also request bank statements from applicants since they are relevant in detecting whether the applicants have incentives to file a fraudulent claim. However, manual data entry of bank statements can take a long time, and applicants are frequently in a hurry while processing insurance claims. As a result, insurance companies are increasingly adopting bank statement extraction software into their process.
It is a known fact that businesses are under intense pressure to offer outstanding customer service. On the other hand, customers are frequently frustrated by the time it takes firms to process their documents, especially when it comes to banks processing bank statements.
A bank statement extraction software can extract relevant information from bank statements and store them logically for later use. AI-enabled OCR solutions can assist banks, individuals, and other organizations dealing with bank statements by improving service delivery quality, offering access to error-free critical financial data, and enabling periodic progress monitoring and economic well-being.