Since the beginning of time, people have been lending and borrowing money. Several banks have taken advantage of these instruments and reaped significant benefits. Today if banks and other economic institutions can plan and systematize their analytical muscle, it will soon be a true business discipline tool. However, no one can dispute that diving into this might be a difficult decision. With benefits come drawbacks, and one should be a fair judge of the issue, knowing and judging both sides equally. In the Fintech world, this is where a bank statement analyzer tool has exploded. On the other hand, access to these tools has made it easier to analyze payment patterns among lenders and borrowers and, more crucially, has provided access to the community’s non-banking sector. This guide will look at how investing in a bank statement analysis tool for future transactions will help you. Here are some lists about how superior bank statement analysis can aid in business growth.
What Can Bank Statement Analysis Be Used For?
Bank statement analysis may appear exclusive to banks, but this is not the case. They can be useful to a variety of other groups.
- Recognize Customers’ Red Flags:
High cash deposits and withdrawals, a negative account balance, exceeding overdraft restrictions, and rejected checks are just a few of the red flag signals. If any other information that determines the borrower’s accurate financial health and it will make it easier for them to make informed decisions. With the facilitate of a bank statement analyzer, one can eradicate time-consuming manual verifications, mechanize the identification of income and cost patterns, and supply a customized output that leads to segregated in turn about balances, recurring income and expenditure, bounced checks.
- To Determine Borrower Creditworthiness:
The lending of finance accounts for most of a financial institution’s revenue, whether it is commercial or retail banking. A financial institution will always do a background check to determine the borrower’s creditworthiness before granting any loan. This enables them to determine whether or not the borrower can repay the loan within the agreed-upon time frame. The lender can examine the borrower’s creditworthiness in real-time using bank statement analysis.
- Identify Customer Banking Trends:
A bank statement analysis tool can assist you in determining and identifying an individual’s banking patterns. This statement contains all of the information you need, from estimating and forecasting deposits through withdrawals.
- Identify Tax Evaders:
Using the bank statement analysis tool, income tax officers and other tax officials can determine whether the assesses have disclosed all transactions. This aids in determining if all returns have been paid following the transactions and eliminate any possibility of tax evasion on the part of the assesses.
- Vendor Fraud Checks:
If a company suspects that vendors or other parties have engaged in fraudulent behaviour, they can use a bank statement analysis tool to investigate. This also informs the company if PDFs provided by the bank have been tampered with in any way, allowing for a proper fraud check to be implemented.
This can help banks identify consumers who take longer to pay back their loans. Furthermore, variations between sales and bank collections can be generated.
What Types Of Analytics Can Bank Statement Analysis Generate?
Like every other industry, the banking industry is utilizing AI and other modern technology to advance its operations. The only way we know to get to profit is to keep moving forward, and here are three analytics created by bank statement analysis that will help us get closer to our aim of profit.
- New Growth Sources:
Bank statement analytics can aid in the discovery of new growth opportunities and even new business concepts. Furthermore, by sharing their customer statistics with their new ecosystem partners, banks may produce data.
- Improved Risk Control:
Banks can improve their risk control by using bank statement analysis tools. Banks can save million each year by reducing fraud losses. Today bank statement analysis tools assist financial institutions in providing error-free analysis at a reasonable cost.
- Enhancing Traditional P&L Levers:
Even in a sluggish economy, bank statement analysis can help boost growth. It aids in the development of complete customer profiles by analyzing transactional and trading data, which increases client acquisition and retention, as well as cross-selling and up-selling opportunities. For example, a bank’s use of credit card transactional data to build offers incentivizes clients to make frequent purchases from certain merchants. This increased the bank’s profit and gave its customers more value, and increased revenue for retailers. Additionally, using bank statement analytical assisted approaches assists banks in increasing overall productivity and improving risk control.
What is the problem, and how may bank statement analysis solutions help?
Borrowing and lending money can be tiresome at times. Advanced technologies, such as bank statement analysis solutions, are a major focus for every bank. Have said that, there are many obstacles to overcome along the process, including the following:
- Data introspection is time-consuming.
- It is a laborious and time-consuming procedure.
- Cut costs and frauds.
- Bank statement file types
However, a good bank statement analysis tool can provide various answers that a bank statement analysis solution can provide through its peripheral.
Like the one provided by Pirimid, the solution has aided a number of financial institutions in lowering expenses, automating the entire process, improving risk assessment, and keeping track of default repayments. The following features should be included in an effective tool:
- An API-based analysis solution should be able to integrate with your current system.
- Support all bank statement formats by using Optical Character Recognition to translate these forms into machine-centric languages
- Give a thorough examination.
- Dashboard with multitasking capabilities
- Should be able to understand complex transitions and deliver the most detailed report possible.
- Eliminates manual processes, which saves time and money.
Finally, you learn the how investing in a bank statement analysis tool for future transactions can assist and help your business with more features. These are the above-explained details about how superior bank statement analysis can aid in business growth.