How Bank Statement Extraction Can Enhance Workflow Automation?

Manually processing bank statements is labor-intensive, time-consuming, and error-prone, causing transaction delays and raising the risk of document fraud. In contrast, bank statement automation eliminates physical scanning, facilitating seamless and uninterrupted scanning and documentation. This swift, automated process virtually eradicates the potential for document fraud.

This article explores the integration of bank statement extraction with workflow automation, covering the tools, technologies, and best practices for implementation and provides the crucial role of bank statement extraction and its integration with workflow automation across industries. It highlights the transformative impact of technology, emphasizing tools that prioritize accuracy, efficiency, and compliance.

Choosing the right software is paramount, mirroring the ongoing adoption of new technologies and advancements in AI. This trend holds the promise of continuous innovation, seamlessly integrating technology to enhance the capabilities of banking operations. 

The pivotal role of bank statement workflow automation in business operations cannot be overstated, encompassing tasks from streamlining underwriting processes to reinforcing compliance and auditing.

Ready to take the next step? Experience the efficiency firsthand by automating your bank statement verification with Docsumo.ng insights into the future of this automation. Let’s jump right into it.

What is workflow automation?

Workflow automation is the strategic use of technology, such as Robotic Process Automation (RPA), to streamline and automate repetitive tasks within an organization. It offers transformative benefits across sectors:

• Manufacturing: This system minimizes errors and maximizes efficiency by optimizing production lines and supply chain processes. The streamlined production lines contribute to error reduction while concurrently optimizing the overall efficiency of the supply chain processes. ‍
• Healthcare: Automated workflows can handle patient document processing, appointment scheduling, and billing, improving patient care and operational effectiveness.
• ‍Retail: Businesses can automate inventory management, supplier invoices, purchase orders, and customer loyalty programs, leading to better inventory control and enhanced customer satisfaction.

Automated workflows replace manual tasks, allowing employees to focus on more strategic and high-value activities. They ensure consistent execution according to predefined rules, reducing errors, increasing operational efficiency, and lowering costs.

Workflow automation has also had a transformative change in several real work examples like,

• PayU is a global fintech that provides payment solutions in 20 countries and operates as a lending platform in India. With a monthly influx of 100,000 loan applications, processing took 24-48 hours. This was cut to  30 seconds with Docsumo's intelligent workflow automation. Smart validation rules enabled touchless processing, reducing costs by an impressive 70%.
• Zara employs a cutting-edge automated inventory management system. It leverages RAIN RFID technology to enhance visibility into item-level locations. This system allows Zara to track and control inventory levels. It also allocates products based on demand and availability, optimizing its supply chain in real-time.

What is bank statement extraction?

Bank statement extraction involves automatically extracting relevant data from bank statements using technologies such as OCR and NLP. This extracted information may include transaction details such as dates, amounts, descriptions, and account numbers.

These automated bank extracts are crucial across diverse industries and sectors. The efficient handling and analysis of financial data are important in these fields. Organizations use these extracts to track and account for fund movements. They also assess total assets, identify liabilities, and itemize deductions.

Bank extracts find broad applications in various industries:

1. Healthcare: Patients securing loans for medical expenses, including pharmacy bills and hospital admissions, must submit bank statements as part of the documentation process.
2. Real Estate: Businesses or individuals seeking loans for land purchases, whether for residential or commercial purposes, use bank statement extracts. These extracts serve as an address proof and identity verification, streamlining the loan approval process.
3. Tax Filing: Individuals and businesses rely on bank statement extracts to compile the necessary information for tax filing.
4. Compliance and Auditing: Finance institutions use bank statement extracts to monitor transactions for signs of money laundering or illicit activities. Auditors utilize them for reconciling accounts and ensuring accuracy in financial reporting.

Integrating bank statement extraction with workflow automation

Integrating bank statement extraction with workflow automation involves several key steps:

1. Choose a platform offering automated bank statement extraction to streamline operations and set up using the following credentials.
2. Navigate to APIs & Services and locate the Bank Statement Processing API; ensure it is enabled. If not, click the toggle icon to activate it.
3. Access the list of APIs by clicking on Document Types on your dashboard. Locate the Bank Statement Processing API, among others and enable it.
4. Click 'Review' to inspect the extracted, organized, and validated data. If everything is correct, click 'Approve.' If there are missing values or additional details, improve the API's performance by training the model.
5. Validate the data post-entry, identifying and addressing any discrepancies promptly.

Let's take a look at some of the benefits of integrating bank statement extraction with workflow automation.

a. Accuracy in reporting

Automating bank extraction workflows minimizes errors in handling sizable datasets by reducing manual data entry. The integration interprets and categorizes data following predefined rules, ensuring precision and uniform treatment of similar information.

b. Reduced time, effort, and cost

Manual extraction from bank statements is laborious and time-consuming, incurring overhead expenditures. Automated bank statement extracts swiftly retrieve and extract relevant information, saving time and effort.‍

c. Improved compliance and data security

Automated bank extracts consistently adhere to financial regulations, ensuring compliance with industry standards and minimizing the risk of penalties. Secure storage, encryption, and access controls ensure the integrity and confidentiality of financial information from bank statement extracts.

Case in point, Hitachi Payment Services saved over 20 hours monthly with 90% touchless processing and 99% accuracy using Docsumo for automated bank statement extraction. Similarly, LendPro streamlined mortgage approval processes by efficiently assessing borrower risk through this integration.

Tools and technologies for bank statement workflow automation

Technological advancements have facilitated the adoption of bank statement workflow automation, utilizing OCR and AI/ML algorithms to automate data extraction from bank statements.Utilizing Intelligent Document Processing (IDP) and OCR technology enables the extraction of data from bank statements, transforming them into digital formats like PDFs, JSON, XML, and more. IDP is frequently misused as a synonym for OCR, but this is inaccurate. Bank statement workflow automation relies on specialized tools and features to streamline and optimize financial data processing. These include: 

1. OCR (Optical Character Recognition): Can recognize and extract text from scanned or digital bank statements.
2. Intelligent document processing : Helps extract data from intricate and non-standard documents.
3. NLP (Natural Language Processing): Allows interpretation of extracted text to identify key information such as dates, amounts, and transaction details.
4. Machine Learning Algorithms: These algorithms can adapt and improve over time, enhancing accuracy and reducing errors in data extraction.
5. API Integration: Seamless integration with other systems, such as accounting software or ERP systems, for streamlined data transfer and processing.

IDP, or Intelligent Document Processing, is the advanced data extraction tech that helps overcome traditional OCR limitations, especially with complex documents. Notably, many banks password-protect emailed statements for added security. This slashes repetitive tasks, boosts data quality, speeds processing, and lowers costs. The market abounds with innovative tech tools to streamline tasks, benefiting individuals and businesses.

Docsumo offers a comprehensive end-to-end software solution integrating advanced features. It utilizes advanced AI/ML algorithms and OCR technology to seamlessly integrate bank statement extraction with workflow automation for financial institutions.

The pre-trained APIs identify crucial information such as account numbers, transaction IDs, summary tables, and transaction amounts with 99% accuracy, highlighting any mismatches for easy validation. For accounting teams' convenience, it allows third-party integration (e.g., Stripe, Quickbooks, Google Sheets, Xero) and native integration with cloud storage like OneDrive, simplifying data aggregation and reducing dependence on heavy IT infrastructure.

Through its API, Docsumo seamlessly captures line items, initiating swift data entry. The extracted data undergoes rigorous validation, with two-tiered accuracy checks—automated and manual—ensuring precision. Docsumo delivers substantial cost savings, leveraging self-learning AI technology, slashing manual review time by up to 80%.

Best practices for implementing bank statement workflow automation

Automating bank statement analysis is crucial for efficiency, and this success hinges on strategic implementation. Here are 3 effective best practices in implementing bank statement workflow automation:

1. Train your employees: Train them to understand the automation tools and processes for a smooth transition, enhancing productivity in handling bank statement workflows.
2. Suitability: Before opting for automated bank statement analysis software, thoroughly understand your organization's requirements. Evaluate the volume and complexity of the statements that need processing. Clearly define critical analysis requirements, such as data extraction, trend analysis, or fraud detection, to guide your selection.
3. Flexibility: Acknowledging the diverse formats in which financial institutions issue statements is imperative. A strategic approach involves opting for software endowed with the capability to decipher unstructured data from an array of layouts and amalgamate it seamlessly.
4. Accuracy and efficiency: Emphasize accuracy and efficiency in financial analysis. Ensure that the chosen software delivers high data accuracy while efficiently handling tasks like converting PDFs to Excel and processing tabular data. Advanced AI algorithms and machine learning techniques enhance accuracy and enable rapid processing of many statements.
5. Ensure data security:  Choose automation tools with robust data security features, prioritizing solutions that prevent fraudulent transactions and ensure data accuracy. Ensure the software adheres to stringent security protocols, including encryption and other data protection measures. It should meet industry standards, maintain data integrity, and safeguard customer information.
6. Maintain Compliance: Implement automation processes adhering to industry regulations and standards, updating tools regularly to meet evolving compliance requirements.

In conclusion, this article explores the crucial role of bank statement extraction and its integration with workflow automation across industries. It highlights the transformative impact of technology, emphasizing tools that prioritize accuracy, efficiency, and compliance.

Choosing the right software is paramount, mirroring the ongoing adoption of new technologies and advancements in AI. This trend holds the promise of continuous innovation, seamlessly integrating technology to enhance the capabilities of banking operations. 

The pivotal role of bank statement workflow automation in business operations cannot be overstated, encompassing tasks from streamlining underwriting processes to reinforcing compliance and auditing.

Ready to take the next step? Experience the efficiency firsthand by automating your bank statement verification with Docsumo.

FAQs

a. What are the key advantages of automating bank statement workflow?

The key advantages of automating bank statement extraction workflow lie in streamlining processes while minimizing the risk of errors associated with manual processing. It offers a remarkable speed of response, eliminating the need for human labor and ensuring timely and error-free analysis.

b. How Does Bank Statement Extraction Work in an Automated Workflow?

Automated bank statement extraction involves using specialized software and technologies to streamline the processes to extract transaction details, dates, and amounts from bank statements, focusing on continuous improvement. The key steps include data uploading, OCR technology, data extraction, and validation.