Financial Services Intelligent Document Processing Use Cases
With an intelligent automation tool such as the Indico Unstructured Data Platform, your process experts – the folks who perform the processes day-to-day – can build models that automate large portions of their jobs, leaving them free for more rewarding, strategic work. Following are just a few of the financial services use cases that intelligent document processing addresses.
Automate commercial debt document review
Financial services companies both hold and issue commercial debt. That means they must review documents such as promissory notes, to examine the economics of the debt, interest rate index, debt maturity dates, legal reporting responsibilities and more. That’s the kind of detailed data that no RPA robot or templated approach to automation will be able to deal with. But with an intelligent document processing platform built on sound AI technologies, you can build models trained to identify and extract relevant data from such commercial debt documents.
Know Your Customer requirements
Know your Customer (or Know Your Client) is a regulation that requires banks and other financial services companies to understand some key information about their clients, including their risk tolerance, financial profile, and anyone who has authority to act on a client’s behalf. If the client is a corporation, the financial institution will need to identify who its officers are, how much equity the officers hold, where the company’s operations are located, and more. An intelligent document processing platform can be used to help automate the process of collecting KYC data, saving innumerable hours of employee time.
Anti-money laundering compliance
KYC can also factor into regulations that U.S. financial institutions must comply with to detect money laundering. In practice, compliance means collecting documents from clients when they sign on with the firm to prove they’re legitimate. It also includes ongoing monitoring for negative news that may indicate legal problems. Traditionally these were manual processes, but today intelligent automation solutions enable financial services firms to automate large portions of anti-money laundering programs.
Automate LIBOR loan updates
The end of 2021 saw the retirement of the LIBOR interest rate benchmark, yet many financial services institutions are still trying to find all their loans that reference it. It’s a time-consuming endeavor because, traditionally, it required a team of employees to read reams of unstructured documents in search of LIBOR-related terms. IDP presents a better option. An IDP model can search thousands of documents, find and extract LIBOR-related terms, and enter them into a downstream tool. Such an automated process greatly simplifies the job of dealing with LIBOR, as this blog post details: “Don’t Labor over LIBOR: Meet the Looming Deadline with Intelligent Automation.“
Streamline financial document analysis
Financial services firms rely on data in SEC earnings reports to inform their analysts’ advice. Analysts study quarterly 10-Q and annual 10-K forms looking for actionable data, pull it from the reports, and enter it into spreadsheets. An effective intelligent document processing tool could take on this task, providing more time to analyze the results. (For more detail, read the blog post: “Bringing Intelligent Process Automation to Financial Document Analysis.“)
ISDA master agreement process automation
ISDA Master Agreements define the terms between parties involved in an over-the-counter derivatives transaction. Financial institutions that process such transactions must examine the ISDA documents related to each trade. It’s an onerous task, given that the ISDA document is 28 pages long and contains numerous variables for each transaction. Processing a single one can take 2 hours or more and large financial services institutions may process thousands of them every year. Given that, ISDA agreements are a good candidate for intelligent process automation in financial services. (For more detail, see our blog post, “Process Automation Comes to ISDA Master Agreements.“)
Trade order confirmation automation
Financial firms involved in trading know that the confirmation process can get complex and time-consuming, which is why many of them are now looking at intelligent document processing as a way to streamline the process. Any trade – including over-the-counter stocks, stocks traded on an exchange, and derivatives – requires a settlement process and, ultimately, a trade confirmation. It’s an important step as the confirmation spells out the terms the trade was executed, so both sides can see whether the trade matched their price, quantity, and timing expectations.