Bank statements are important documents that present a holistic view of the account holders’ financial health. Bank statement analysis scrutinises the deposits and withdrawals, regular payments and credits, spending patterns, and preferred transaction modes (cash, debit cards, credit cards, UPI, etc.) to compute the financial stress of an account.
The financial data contained in account statements make bank statement analysis an integral part of credit appraisals.
However, manually evaluating bank statements is a taxing and time-consuming activity that is prone to errors and inconsistencies.
To solve this, a bank statement analyser (BSA) automates, simplifies, and elevates the accuracy of bank statement analysis. As a result, an agile and reliable analyser tool helps improve the loan quality in the lender’s portfolio, thereby reducing loan default rates.
Powered with cutting-edge AI and ML, Precisa’s convenient, cloud-based web application accesses real-time transactional data with the customer’s consent for meticulous analysis.
In this blog post, find out how Precisa collects and uses data while assuring the utmost security of sensitive financial information.
How Bank Statement Analysers Work
Bank statement analysis yields data that is utilised for a variety of purposes, such as,
- Loan approval
- Credit underwriting
- Income tax computation
- Fraud detection, etc.
A bank statement analysis software examines a statement using the following six-step process flow:
1. Parsing transactional data from the input statements
Bank statement analysis software reads the data from statements uploaded by the users, input using API integrators, or retrieves transaction details in real-time using account aggregators (AAs).
2. Converting them into uniform digital format for further use
The statements input can be in many file formats such as PDF, XLS, XML, scanned, and so on. Hence, the next step is to structure the heterogeneous data by converting it into a uniform template.
3. Classifying and categorising the data according to the transaction type
Data is classified and sorted according to transaction type to detect anomalies.
4. Validating categorised data by performing ‘data hygiene’ checks
The records are verified for accuracy and for eliminating errors. The errors could be duplicate records, incomplete or missing data, faulty processing of record fields, etc.
5. Performing analysis of the validated data
The software executes statistical analysis on the verified transactions for precise results.
6. Producing detailed reports based on the analysis
Provides actionable information based on the account holder’s transaction behaviour in formats that users prefer, such as Excel, JSON, and web apps.
How Does Precisa Improve Bank Statement Analysis: 8 Key Functions
Precisa’s cloud-based solution is compatible with over 350 banks and 700 formats. Here is how Precisa Bank Statement Analysis stands apart from the competition with its advanced features.
1. Performs authenticity checks to confirm the originality of uploaded e-statements
Presica bank statement analyser authenticates uploaded e-statements to ensure they are genuine and that the records are not manipulated.
2. Emphasises transactions considered suspicious and possibly fraudulent
The tool can detect doubtful transactions and highlights them in the ‘Irregularities’ tab. It can identify 12 such potentially fraudulent activities.
3. Tabulates regular transactions for easy reference
Users can apply the ‘counterparty tab’ functionality to regularly identify key individuals/businesses the account holder deals with. It also displays recurring receipts from and payments made to a certain party with the ‘monthly counterparty tab’.
4. Recognises over 90+ inflow and outflow categories to determine the applicant’s income and expenses
The program intelligently tracks applicants’ earnings and expenditures such as salary, loan, interest, utility payments, and many more.
5. Screens and detects circular transactions
Circular transactions are fictitious methods of inflating bank transactions for a specific period or the account’s total balance on a specific date.
Precisa bank statement analysis tool checks incidences of circular transactions in the given statement and reports them in the ‘circular transactions tab’.
6. Identify business-related cash flows
Our bank statement analysis also measures the overall percentage of business-related cash flows relative to total cash flows into the account.
7. Precisa score for better assessing the creditworthiness
The algorithm computes an evaluation score known as the Precisa score after considering various parameters crucial for decision makers like OD/CC utilisation, volatility, transaction anomalies, etc. The score encapsulates the entire analysis of the statement.
8. Combined analysis of multiple bank accounts
Precisa offers bank account analysis at the individual account level as well as integrated analysis of multiple accounts. This provides a far more detailed picture of the individual’s or institution’s financial situation.
Protecting Sensitive Financial Data: Precisa’s Approach to Data Security in Bank Statement Analysis
Precisa is committed to protecting sensitive client data handled during the bank statement analysis process. This primary goal guides our privacy policy.
The policy applies to all Precisa products and regulates how we gather, use, retain, and disclose information gathered from users when providing services.
It covers the following aspects of data collection and use:
1. Obtaining personally identifiable data
Precisa acquires personally identifiable information when users choose to input such information or if the company registered with Precisa chooses to provide such information on our site.
Personally identifiable information includes:
- User’s name
- phone number
- email address
- financial statements from your clients, and other information.
2. Gathering non-personally identifiable information
Non-personally identifiable information includes data such as the browser type, date and time of visiting the webpage, period of stay on the site, referring site, and so on. Such data cannot be tracked back to an individual and has only collective significance.
3. Using personally identifiable information
We use the submitted to us to-
a) Grant users access to their accounts
b) Offer analytics to users for making financial decisions
c) Send emails to customers informing them of account-related events that they should be notified about as part of Precisa functionality
d) Send promotional emails to select customers, informing them about what is happening at Precisa
e) Make some user data accessible to their colleagues within the same account
4. Safety of customer’s personal information
Precisa has implemented adequate security and safety protocols and procedures to protect your personal information on our site from unauthorised access, modification, or exposure.
5. Sharing of personal information
Other than the users in your account, Precisa never divulges or makes your personally identifiable information accessible to any third party.
6. Changes to the privacy policy
We regularly review and update the policy according to regulatory requirements and industry best practices. Check out our latest privacy policy.
Winding Up
Precisa Bank Statement Analysis is an effective and reliable tool for performing statement analysis quickly and accurately. It offers an in-depth review of bank account statements while maintaining the security of your financial information.
Not only that, it also reduces loan processing time by 5X and improves productivity by 8X.
The real-time data fetch using an account aggregator connector is performed with customer consent, which the client may withdraw anytime.
The security and confidentiality of sensitive financial information are critical to Precisa. Therefore we adhere to Data Governance guidelines, guaranteed by our privacy policy.
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