Bank statement processing helps in digitizing financial statements so that they are managed easily and customers don’t have to worry about losing or missing out on getting data. Sometimes customers want to view a summary of transactions from multiple accounts, and bank statement processing automation is a convenient way of pulling the data together and providing an overview of finances. Bank statement processing automation is also used for account reconciliations and these statements are used for mapping out differences between cash books and pass books.
A bank statement contains a list of all transactions made during the month or between specific periods of time. The following details are found within a bank statement:
What is bank statement? Generally speaking, bank statements are financial documents. They have a summary table that shows deposits, withdrawals, description of transactions, dates, and the transaction IDs. These are the key details needed by lenders, organizations, and individuals during bank statement data processing.
Bank statement processing involves extracting financials from account statements, organizing data, and structuring it in a way that makes it easy to understand cash flows of accounts. Bank statement processing is done by organizations to verify proof of employment, income and assess the creditworthiness of individuals before approving them for loans or mortgages. Most lenders and NBFCs request for bank statements dating back to at least 2 months before reviewing and processing loan/mortgage applications.
Your bank statement data is sent to you electronically via email at the end of every month. It summarizes your account activities and gives an overview of your finances. Intelligent Document Processing and OCR technology are used to extract data from bank statements and convert them into digital files such as PDFs, JSON, XML, etc. Most banks password-protect statements when sending them to account holders via email for added protection.
Docsumo features the pre-trained API that automates bank statement extraction and processing for easier financial document management. The steps involved in bank statement processing and automation are as follows:
Accounting errors or mistakes made when processing bank statements can have fatal consequences for financial institutions. Glaring mistakes committed while reading these statements could lead to lawsuits getting filed against banks and facing legal charges. When fraudulent transactions occur, banks lose customers and end up tarnishing their reputation. Below are the benefits of using automation solutions and OCR data extraction for bank statement processing:-
Bank statement processing helps in identifying errors in accounting, mismatching amounts, and duplicate transactions. There are cases where wrong transactions can occur and statement processing cross-checks databases to make sure these don’t happen.
Manual data entry by hiring accountants for processing bank statements results in a high margin of human error. Bank statement processing using OCR technology yields up to 99.5% accuracy when reading data from financial documents. No need to worry about duplicate entries, data redundancy, missing fields, and misreading or misinterpreting information. This also means that the data processed does not have to be re-entered, as in the case of manual bank statement processing.
It is impossible to keep up with the large volume of transactions that occur and get them entered manually by hand. Bank statement processing automation helps institutions sort and process huge volumes of data, thus becoming highly efficient. It takes seconds to process transactions automatically versus taking minutes to enter the details by hand. This convenience cannot be replaced and it streamlines core banking processes as a result.
4. Paperless document storage
No need to pay additional costs for transporting documentation when you digitize financial statements. Banks enjoy paperless document storage when they shift to electronic means of document management by using statement processing OCR solutions. Electronic statements can be easily backed up and users don’t have to worry about losing their bank statement records or getting them accidentally deleted.
Since bank statement processing software pulls out data related to all transactions, dates, and credit/source accounts, it helps in comparing financials for customers. Individuals can compare balances, identity total deposits/withdrawals, and spot differences in financial records reflected in the businesses versus their bank statements.
For customers who are approaching for loans or mortgages, using bank processing software to pull out their data can be a fantastic way to enjoy faster approvals. The software streamlines customer onboarding and off-boarding processes in organizations and saves time when reviewing the credit profiles of individuals.
The initial costs of investing in automated bank statement processing software is high but the long-term costs of using these solutions are very low. In fact, businesses end up saving money when investing in automated bank statement processing.
Educational institutions, retail sectors, fintech startups, and large-scale enterprises are witnessing an increase in the adoption of intelligent character recognition software solutions for capturing key data from bank statements due to the increase in efficiency and performance when it comes to data storage. Plus, using automated data capture solutions for processing bank statements does not require a steep learning curve and beginners find platforms like Docsumo very user-friendly.
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In today’s dynamic business world, filing and archiving official documents in the digital form makes it handy, and works wonders in the future or in unforeseen circumstances.
With an automated data extraction solution, loan documents can automatically be processed end-to-end without any human errors and delays. Automation in loan document processing prevents downtimes, eliminates data redundancy, and allows companies to respond faster to client queries. By combining machine learning with deep learning and OCR, companies can eliminate huge costs, derive actionable insights, and streamline loan processing and approvals through efficient data extraction and analysis.
Mortgage lenders receive multiple identity and income verification documents along with different forms from loan applicants in a variety of formats and styles. Traditional OCR solutions fail to extract data from these semi-structured documents and that’s why more and more lenders are adopting intelligent document processing solutions. IDP solutions not only extract data correctly, they are able to validate extracted data against predefined rules in order to improve accuracy.
Intelligent Document Processing is an automation technology that captures information from a myriad of documents and data sources, extract data, and organizes it for further processing. IDP solutions enable businesses to seamlessly integrate with core processes, eliminate manual labour, address challenges faced in reading different document layouts, and meeting legal & compliance requirements. Accurate data is the foundation of every organization, and IDP assists businesses in dealing with the complexity of processing huge volumes of documents, helping them automate manual data entry processes, and move away from traditional semi-automated OCR workflows.