Technological innovation in document processing is rapidly revolutionizing the BFSI sector. With automated data capture solutions, companies can capture and intelligently segregate bank statement data, thereby saving time and effort while ensuring error-free entries every single time. Despite offering countless benefits, automated document processing is not the preferred choice for a number of organizations, and they still prefer manual bank statement processing. However, the adoption rate of automation in the BFSI sector is encouraging as the global RPA market size in the BFSI industry is anticipated to register a CAGR of 31.3% from 2019 to 2025.
Limitations of manual bank statements processing
The traditional notion of 'human touch' serving as the final seal of approval is no longer trustworthy - at least in accountancy. Not only does manual processing eat up precious time in today's fast-paced world, but it also comes accompanied by a whole bag of other limitations as well:-
The monotonous, mundane task of number crunching plays tricks on the human mind, leaving room for errors and mistakes in processing bank statements manually. Errors can occur in:
- Reading bank statements
- Extracting the numbers manually to feed to digital formats
- Manual categorization of data based on its financial attribute
An error in even a single digit or decimal tends to create a snowball event where all subsequent processes take the hit. Moreover, it becomes nearly impossible to pinpoint the error location to fix inaccuracies.
2. Document Frauds
While bank fraud prevention laws and protocols are very well put together, the legacy of manual bank statement processing, unfortunately, has still left behind a trail of fraudulent practices that garner a bad name:-
- Changing variable information - If you remember the legendary Ponzi Scheme, where Bernie Madoff swindled nearly 5,000 clients of almost $65 billion (yes), you'd realize he did it by using forged bank statements. A clever underwriter will know how to forge a bank statement, and this is where the problems with manual processing arise.
- Inserting real pages from another document - Manually augmenting a bank statement with additional lines of debit or credit work to fake a business's profitability/credibility.
- Removing pages or specific information - It counts as fraud to manually remove information from bank statements - because it generates fake financial reports for the firm, changing its tax and loan liabilities and eligibility, respectively.
- Applying false stamps or watermarks - Document forgery happens only where there is manual intervention in bank statement processing.
- Digitally altering or adding information to an image of an original document - Certain software solutions exist in the market that assist a person in redacting specific areas of an image or a document and change the entries on it.
3. Slower Processing Time
Today, there is a need for speed in all tasks and operations of a business in order to stay at the top of the game. Manually importing bank statements to Excel is an agonizingly slow process riddled with compromises and errors. Data labeling also takes up precious man-hours that can be utilized effectively elsewhere.
4. Added Costs
Setting an exclusive budget for a dedicated team to process your bank statements puts a dent in your finances - and this is just the direct cost of manual operations. Bearing in mind the errors and inaccuracies that could occur down the pipeline and subsequently lead to consequential costs. According to estimates, manual document processing can cost somewhere between 170% to 20 times of the automated document processing costs.
5. Data Security
Manual intervention in bank statement processing allows data leaks to occur, which are risky in the world of business - where the competition can do anything to get ahead. Sensitive financial data must never be allowed to leave your offices.
How automated bank statement processing works
Bank statement software makes it possible to convert bank statements to excel, csv, or json within a few clicks, without any manual labor or errors involved. Here is how it is done:
1. Upload the documents
The software utilizes Optical Character Recognition technology and reverse image search method to read scanned documents and record data from them.
2. Edit the data
Advanced intelligence and a complex neural network make it possible for the software to accurately read the data on any scanned document. However, if required, it is possible to edit this data.
In order to have the data ready to be served to APIs and user interface, the software may ask for field validation to ensure it assigns the right attributes to the data being read.
4. Review/ Approve suggestions
The smart software captures the data and makes certain suggestions to make readability, processing, and data searches efficient. You can either approve or review these suggestions.
5. Download document
Once you review the suggestions, the document is digitalized and ready to be downloaded in the preferred format, or exported to other software.
Benefits of Automated Bank Statement Processing
Bank statement analysis is a precision task highly sensitive to inaccuracies and errors. As such, automation of this process has a world of benefits for any organization:-
1. Detect Fraud in Real-Time
Manual data processing leaves no room for pinpointing deliberate modifications done to a bank statement. However, bank statement software allows for digging through historical data and catching discrepancies quickly and more accurately.
2. 10X Faster
Capturing financial data has been made lightning-fast through automated bank statement processing. Not only this but subsequent processes like data segregation and classification are also handled by artificial intelligence making the entire process seamless.
3. 50% Less Costly
Automating the bank statement process end-to-end frees up your manpower and capacity, eliminating the need to dedicate staff for this purpose. This directly results in more efficient budgeting of resources.
Automating the documentation of your firm's financials allows you to focus on the more creative, demanding, and meaningful tasks rather than expediting the essential workforce to handle the drab, clerical tasks. And here is where Docsumo comes in. Let our intelligent document processing solution handle all your documents processing while you work on building your brand.
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