[vc_row pix_particles_check=””][vc_column][vc_column_text]According to Javelin, businesses suffered almost $17 billion worth of losses due to identity fraud. This happened simply because of a lack of document verification using AI. Thus, it resulted in money laundering and tax evasion-like activities. The banking industry, in particular, handles a lot of sensitive data. The security of this data is extremely important. However, the estimated cost of manually originating a mortgage loan is about $7,000. This includes a number of manual processes like data entry, review, auditing, and tracking documents. It’s noteworthy that even the smallest of banks would require at least 50 people to handle this process.
The world is witnessing a digital transformation wave. Today, the customers expect more convenience, more security. To add to this, they also expect a fewer obstacles to jump through in order to avail of their banking services faster. Banks have started embracing these expectations. Thus, banks leverage digital transformations using document verification using AI.
Banks predominantly deal with scans, emails, and PDFs. This often requires data extraction and Document verification using AI. Technology classifies, digitizes, extracts validates, transforms and reconciles data from documents within a fraction of time. Manually the same daily tasks would take a lot of bandwidth for any bank.
KlearStack’s self-learning AI solutions powered with intelligent Optical Character Recognition (OCR) and Machine Learning (ML) technology ensure complete digitization and automation of document processing for various types of documents.
Let’s take a look at the various processes wherein the banking sector is leveraging document verification using AI.[/vc_column_text][vc_column_text]
1. New customer onboarding processes
[/vc_column_text][vc_column_text]Document verification using Artificial intelligence is predominantly beneficial to the banking sector when it comes to new customer onboarding processes. Customers have increasingly started to apply for new bank accounts online. This has resulted in an added requirement for automation. Automated document verification makes it easy for the customers. It avoids the burdensome in-person visits and the long process of scanning and printing documents. It reduces channel bouncing and friction. This definitely results in better customer experience.
It is also beneficial for banking agents as they no longer need to perform lengthy manual checks. Banks leverage a very reliable AI model to process documents instantly while onboarding new customers.
Document verification using AI helps banking executives in ensuring compliance. Considering the high accuracy that it guarantees agents/ compliance teams can shift their focus on the larger number of pending tickets.
Automated document verification provides close to 100% security. Additionally, it provides added security layers like knowledge-based authentication (KBA) and one-time passwords (OTP) to ensure that data integrity.
KlearStack helps you accelerate customer onboarding by processing a large volume of KYC documents and bank statements in minutes with 99% accuracy. [/vc_column_text][vc_column_text]
2. Processing loan applications and approval
[/vc_column_text][vc_column_text]Poor document verification processes have resulted in a whopping increase in fraudulent loan applications. Federal student loans have witnessed a 188% increase in frauds. Also, fraud in personal loans rose by 116%. The Auto loans witnessed an increase in bank fraud by 105% in the year 2021.
Automated document verification solutions are capable of identifying the extracted format of documents. They also render Machine Readable Zone; machine-readable code validation refers to performing evaluations to check if the fields in the loan forms are edited or tampered with.
Document verification using AI checks microprint in order to validate the authenticity of the documents required for loan approval. It further detects signs of forgery, even if it is a minor change of a single pixel. Moreover, fraudulent loan applications don’t stand a chance with AI-driven document verification . The solution extracts the metadata recorded in the files ranging from file size to modification history including the software tools used to create the same.
In case of consumer loan processing by banks, several document types need to be verified. These include invoices, insurance policies, loan application forms, bank statements and physical NACH mandate forms. When a consumer buys a product on loan, he is supposed to furnish the invoice for the same as a proof. This item can be anything ranging from cars, and two-wheelers to mobile phones.
After the disbursement of the loan, the bank recovers the loan in the form of EMIs. The banks use NACH mandates (either electronic or physical mandates) for the same. NACH Mandate is a standing instruction to deduct EMI from their bank account. The data from physical NACH mandates needs to be verified.
In the case of cars and two-wheeler loans, the bank needs to ensure that the asset they lent for has been sufficiently insured. So they need to verify the data from the insurance policies bought by the consumer. The data like asset details, model name, chassis number, engine number, motor number etc. need to be verified against the invoice of the respective car/two-wheeler. This ensures that the same asset has been insured. [/vc_column_text][vc_column_text]
3. For NACH mandates
[/vc_column_text][vc_column_text]NACH stands for National Automated Clearing House. A centralized system developed by the National Payments Corporation of India (NPCI) to facilitate recurring, high-volume interbank transactions. Major beneficiaries are banks, governments, corporates as well as financial institutions. NACH simplifies the payment transfer process by eliminating the need for manual action.
In many cases, the customer or an agent assigned by the corporate fills up the mandate form in consultation with the customer. Hence, this is prone to human error and incorrect data entry can prove to be costly. In many cases, it might result in delays and failure in mandate registration.
The consumer hands over the mandate to the corporate. Further the corporate then sends it to the sponsor bank. Since the mandate is in physical form through these stages, there is significant manpower and time consumed in transporting this single piece of paper.
NACH requires authentic document verification. ECS is one of the most sought-after payment systems now. Thus, the process of document verification must be concise. Also, the process should be efficiently quick. That is where document verification using AI comes to the rescue.
Document Verification Using AI : KlearStack Way
The automation of manual banking forms with regard to loan origination, credit applications, bank account opening, and other requests improves the accuracy of data input/output and renders a better customer experience.
KlearStack ultimately reduces costs around document handling and gives an organization the extra boost, helping them reach targets and decrease errors. From the perspective of the banking industry, a future with document verification using AI is a less stressful one.
With KlearStack you can integrate and upload extracted and verified data into QuickBooks, SAP, or other accounting systems with out-of-the-box integrations and API integrations. It also enables you to extract data and categorise the same into key attributes like income, etc, and filter transaction data to derive meaningful insights.
Schedule a demo with our experts today to learn how KlearStack AI can help your organisation.[/vc_column_text][/vc_column][/vc_row]
