As an individual investor, a bank, NBFC or any other financial institution, can analyze the potential borrower’s bank statements to evaluate the creditworthiness to choose whether to lend the money or not. Your bank’s contact information should be on your statement, including the phone number and mailing address, personal information, statement period dates, starting and ending balances, transactions, fees, and interest earned. The underwriter will analyze your bank statements, see for unusual deposits, and how long the money has been in the account.
The term underwriting approach is the original and condiment of your accounts to close in the industry. Examining your account information can aid you in some ways, especially if you need to expend extra conserving transaction costs. If you bank with a distinction union or customer-owned bank, your economic institution will supply you with a list of handy ways to reduce the fees you pay each month. Here you can see everything about the bank statement analyzer:
Transaction pattern analysis
Bank statements analyzer contain the borrowers’ transaction history in the specified period. It provides detailed information about expenditures, income sources, cheque payments, transfers, recurring ECS debits, EMIs, credit card payments, bill payments, penalties levied on defaults, cheque returns, etc. As a result, it allows NBFCs and banks to create better credit decisions.
High valued transactions
The frequency and the part of outgoing increased value transactions deliver an excellent idea of the potential spending ability of the borrower. Generally, a high net worth borrower has done many highly valued transactions in this case. But in case a normal borrower has some high-value transactions, it can be identified easily. The BSA engine should allow identifying, and it highlights the high valued transactions separately based on a current value limit. The value limit must also be configurable according to the borrower’s loan value and net worth.
Debit and credit analysis
The number of credit and debit in an account is a good indicator of income and expense. The credit frequency and amount demonstrate one different source of income. The BSA engine is the one that can provide a clear summary of the credits and debits, and it will highlight the closing balance. Here it highlights how many days in a month the closing balance is more than two standard deviations from the mean. If the number of instances beyond the two standard deviations is less, it will show the borrower consistent in maintaining your finances. This validation range should also be configurable so that the engine can apply the rule with the various limits for different borrowers.
It is very important when the leading institution sells borrowers who are normally salaried employees. Here they should not consider all the credit transactions as income. A suitable BSA engine should have a concrete rule to determine the income alone.
Charges and returns analysis
The BSA engine should identify all the charges and returns from the account. Here the number of instances is less, or sometimes nil indicates the borrower’s financial disciple.
Cheque returns can also incur legal actions depending on the amount involved and the impact on the receiver. Here the cheque returns attract heavy penalties, and it can also impact the financial credibility of the cheque issuer. The BSA engine should thoroughly analyze all the cheques issued and their realization details to identify any returns.
The bank statement analyzer should be able to recognize and list down all the penalties like charges for not preserving a minimum balance. And it charges on cheque returns, forex changes, on any pre closures of deposits, late payments, charges imposed due to inadequate funds on recurring payments, etc.
Circular transactions are a kind of false transactions that happen between companies below a single group or a single organizer. Generally, these transactions are done for expanding the income or expenditure of the companies involved. This practice is legally reflected as a scam and is banned in numerous countries. The BSA engine must be able to hook such transactions, particularly in the circumstance of business borrowers.
Multiple small credits
If there are multiple small credits from various and new sources in an account, that is probable money filtering practice. The BSA engine should be talented at recognizing such forms and high light for more enquiry.
According to the geography of the loaning organization, there will be a fixed set of banned countries or certain organizations. Any fund transfer to such banned entities is measured to be illegal. BSA engine should be talented at recognizing such doubtful transactions and fetching them to the sign of the assessor.
More cash deposits
In the case of retail borrowers, regular and more cash deposits other than salary is a clear element of doubt. The BSA engine will identify this pattern and highlights the cases.
Predictive and statistical analyzer
The BSA engine should collect data from numerous account statements and combine thorough predictive and statistical analysis based on a clear set of rules. The engine should have a real-time combination with GST and credit bureaus to get up-to-date information on the borrowers’ credit history. The output should be an overall credit score of the borrowers that will perform as a guiding light.
Having a robust bank statement analysis engine is the biggest advantage because it checks thorough analysis of the borrowers’ bank statements. And highlights all the serious information to mark a well-versed decision is important for the loaning organizations to grant good loans and decrease the NPAs. Try to precise the simple and robust bank statement analysis tool that permits you to merely upload bank statements and grants illegal insights in visually appealing, intuitive dashboards in real-time.
Finally, these are essential features that can play a pivotal role in analyzing a borrowers’ creditworthiness. The analyzer for all the loaning institutions to make wise credit decisions by properly screening the borrowers before granting loans. From this, you will came to know everything about the bank statement analyzer.
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