Intelligent document processing for banks:
5 use cases

July 1, 2024
Use Case
Henning Jostes

Why banks need Intelligent Document Processing

From credit risk modeling and fraud prevention to communication with customers via chatbots - artificial intelligence is already widely used in banks today and there are many different use cases. A key technology in this context is intelligent document processing (IDP) - especially in the highly competitive banking sector.

Intelligent Document Processing (ID P) is a technology that uses machine learning and artificial intelligence to extract, process and understand information from unstructured documents. IDP enables companies to automatically process large volumes of documents, such as invoices, contracts or forms. Instead of manually going through these documents, IDP systems can analyze text, identify relevant data and convert it into structured formats. By automating the document handling process, companies can work more efficiently, save time and reduce errors. IDP can be used in various industries and use cases.

For banks, which are confronted with a flood of documents on a daily basis, Intelligent Document Processing represents a huge opportunity to increase efficiency, improve customer satisfaction and ensure compliance. In this article, we take a look at five key use cases of the technology and highlight the opportunities that arise from the use of Intelligent Document Processing at banks.

5 Use Cases

1. automated lending

The use of intelligent document processing and artificial intelligence can automate the credit application process in banks and thus significantly accelerate it. Incoming batches of documents and applications are separated using an IDP tool and classified according to document type. In the next step, specialized data extraction enables data to be extracted, e.g. from payslips, tax assessments or ID documents.

This process not only reduces the processing time of loan applications and streamlines the entire internal process, but also leads to a lower rate of manual errors and contributes to improved customer satisfaction.

SUCCESS STORY

Utilization of synergies: Automation of the loan application process

2. digital customer onboarding processes

Intelligent Document Processing can also make a significant contribution to automating the account opening process and customer onboarding.

The technology makes it possible to automatically capture and verify customer documents such as IDs and proof of income, which significantly speeds up the entire onboarding process. In this respect, the technologies support the efficient fulfillment of Know Your Customer (KYC) regulations .This reduces the processing time of new customer applications and enables banks to offer their customers faster account opening.

3. fraud prevention and compliance

In addition to simplifying KYC processes, intelligent document processing also helps banks to meet other compliance requirements. For example, by precisely analysing and checking documents, the technology minimizes the risk of fraud and thus contributes to efficient risk management. With the help of corresponding AI training data, it is possible to identify anomalies and suspicious patterns in transaction data. The technology also helps banks to meet compliance requirements more effectively by ensuring consistent and accurate document management.

Information security certifications, high encryption standards and the data protection-compliant handling of documents are important security precautions that ensure the secure and compliant use of tools for intelligent document processing - especially in officially regulated companies such as banks or insurance companies.

4. optimization of the mortgage process

Banks have a particularly large number of documents in the mortgage process, which usually involves an extensive credit check of tax documents, payslips, proof of identity and, in the case of business customers, complex profit and loss accounts and balance sheets.

AI-supported IDP software can automatically extract the important data from the documents and consolidate it into a clear data set that can be processed further. The technology not only speeds up credit scoring and asset evaluation, but also ensures more transparent and customer-friendly processing. Customers benefit from faster feedback on their applications, while banks benefit from reduced processing times and improved accuracy.

5. automation of back-office operations

Software for intelligent document processing can also increase efficiency in internal processes and other back-office operations. IDP makes it possible to automate a variety of administrative and routine tasks, such as the processing of employee data and internal reports. This leads to a significant acceleration of these processes and a considerable reduction in errors that are often associated with manual data processing.

The technology also supports accounts payable and accounts receivable accounting, where invoices are received in different formats and need to be matched with receipts. This speeds up payment processing, automates 3-way matching, detects exceptions and prevents fraud.

Conclusions

In summary, the introduction of intelligent document processing in banking has a transformative effect that goes far beyond simply increasing efficiency. By optimizing loan origination, digital customer onboarding, fraud prevention, improving the mortgage process and automating back-office operations, IDP enables banks to not only streamline their internal processes and reduce costs, but also significantly improve the customer experience.

In light of rapidly evolving AI technologies and intense competition in the banking industry, the ability to process documents automatically is increasingly becoming a critical competitive advantage. Intelligent document processing is therefore at the heart of the digital transformation in banking, benefiting both institutions and their customers.

Buildsimple as IDP platform in use in BaFin-regulated companies

The Buildsimple platform offers a wide range of application options specifically for banks and at the same time meets the highest security and compliance requirements.