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How do banks use AI for document processing? It all starts with intelligent data capturing – artificial intelligence is used to extract key information from unstructured documents and to integrate it into core banking systems. What is more, AI is used for document classification, enabling quick recognition of the type of document, and making them easier to locate for bank employees. Additionally, it is also possible to use AI to manage compliance in documents and flag potential issues. Do you want to learn more? Then read on.
Table of Contents
- What Is AI Document Processing?
- How Is AI-Powered Document Processing Used in Banks?
- Why Use AI for Document Processing?
- Conclusions
What Is AI Document Processing?
AI document processing, or intelligent document processing (IDP), is the use of artificial intelligence, along with additional technologies such as machine learning and optical character recognition, to improve the flow of documents in an organisation. It is especially important in banks, where the number of forms and applications is extremely high.
The concept of AI document processing involves using artificial intelligence to streamline document handling by automating data extraction (even from unstructured documents) and making all the forms more accessible to bank underwriters and processors.
How Is AI-Powered Document Processing Used in Banks?
Knowing what AI document processing is, let’s look at how it can be leveraged to streamline the processes within a financial institution. Here, we can highlight the following uses:
Data Extraction from Unstructured Documents
The first natural role of AI in banking for document processing is its ability to extract data from unstructured forms and applications. This way, financial institutions can avoid wasting a lot of time on doing this manually, hence improve overall productivity.
The great advantage of this is that such extracted data can be updated into your existing systems automatically. This way, you can keep your data up to date without manual input from your employees. How does it all work?
The AI-based document processing system scans the forms, applications, financial statements, reports and analyses, with particular attention to fill-in fields. Using OCR, it recognises the letters and signs and inputs them into the system. If the input is unreadable, the system flags it for manual processing. This way, you can be sure that no incorrect data makes it into your core systems, even if the model is unable to recognise particular characters or numbers.
Document Classification
Another key use case of AI for document processing in banking can be observed in document classification. With many forms and applications, it is often difficult to find the proper documents time-efficiently. Hence, proper labelling is critical, and AI-powered systems enable that.
How does it all work? An AI system taught by ML scans each document and labels it based on its contents. The documents are then sorted into your existing systems based on their categories, letting your employees find the adequate ones quickly. This way, your bank no longer has to worry about differentiating between mortgage applications, tax forms or insurance claims – it’s all done automatically. Why is it important?
Proper classification makes your other digital systems more efficient since they know what data to draw on. In practice, this means that AI-driven document classification is the basis for a true digitalisation process, the cornerstone of your organisation’s switch to a paperless system.
For this to work, you need a good machine-learning model. This is where Ailleron can help you. Our ML services for banking include designing and developing a machine-learning model dedicated to your needs and adapted to the data you use and the systems and processes in your organisation.
Document Compliance
Another key functionality of AI for document processing is its ability to prevent any compliance issues from emerging in your official papers. You can achieve this by teaching your large language models (LLMs) what is compliant and what isn’t and using this to evaluate your documents.
In practice, this involves designing an AI model that will scan all the documents created or received by the bank. Such a model flags all potential non-compliant clauses. Your employees can then review them manually and change those fragments if required. As a result, you can double-check whether your documents are in line with official regulations without the need to spend extra time on this. Additionally, like in the case of data extraction, you can eliminate potential human errors that could affect your institution.
Check Approval and Processing
If your bank operates in a country that still uses checks, you can enhance their approval process with AI as well. Again, the AI-based systems may be used to accelerate the process of data extraction, especially when the checks need to be pre-approved or filled with information regarding the purchase.
Linking Documents Together
Another key feature of AI-powered document processing is that it enables you to quickly link relevant information from various documents. How does it work?
LLM models are capable of not only extracting information but also summarising it or even… answering questions based on the provided documents. When integrated into your other systems, they can be used to, for example, accelerate customer service or even automate it. How?
Imagine a customer asking about a particular aspect of their mortgage contract. Without AI-driven document processing, your agent would need to go through the whole document to find the particular piece of information (or it would have to be input manually into the system beforehand). But, with such a solution in place, you do not have to include the agent at all – the LLM model can answer the customer’s question based on the document(s), hence improving the productivity of your agents.
Why Use AI for Document Processing?
We have shown you a few use cases of AI-based documents processing systems. Now, let’s look at the benefits that come with them. Naturally, we have already mentioned several of them when explaining how the systems work, but here’s a full overview of the advantages that come with such solutions.
Scalability
AI document processing enables you to handle large volumes of forms, applications, analyses, financial statements easily, even if they grow rapidly. This makes it perfect for organisations where the number of documents is constantly rising, enabling your business to scale without any frictions.
Productivity Boost
AI-powered, automated, or semi-automated document processing is faster and requires less human input. In practice, this translates into more time for your employees to spend on high-value tasks, hence higher productivity across your whole bank.
Enhanced Customer Experience
How to improve customer experience in banking? By making processes efficient and simple for the client. This is exactly what happens when using AI to process documents.
With automated data extraction, processes like digital onboarding or mortgage decisions become faster. This, in turn, makes using your services much more enjoyable for the clients, hence building their loyalty and satisfaction.
Human Errors Minimized
With AI being responsible for data input, you no longer need to worry about your employees making mistakes while writing the data from documents into your core systems.
Reduced Operating Costs
Naturally, investing in AI and ML might seem like a big investment. However, you get a return on it pretty fast.
Improved productivity simply means that you pay the same amount of money in salaries but get a higher profit since more is done. What is more, due to the elimination of human error and the introduction of compliance-checking systems, you ensure that your documents are immaculate. This, in turn, reduces the possibility of being fined, thus increasing your general income even further.
Data Analytics
With all the documents structured and inserted into your systems, your institution becomes capable of making truly data-driven decisions. You can use AI to analyse the processed information and extract predictive insights, from those that enable you to customise product offers for your customers to those that will guide you when making organization-level decisions.
Conclusions
AI-powered document processing is a powerful tool, enhancing all aspects of banks – from the productivity of their employees to compliance with the regulations and even customer service. Therefore, it is not surprising that an increasing number of banks have decided to invest in such solutions. If you are looking for an efficient AI model for document processing, feel free to contact us. At Ailleron, we are committed to creating cutting-edge tech solutions for financial institutions, so we are ready to prepare a document processing system tailored to your needs.
You might also read: How to Adopt Artificial Intelligence in Your Business?
