Use Case | Financial Audits

Use Case 1: Financial Audits

Description:
Financial audits are critical processes that involve reviewing financial reports to ensure they include all necessary details, comply with applicable regulations, and accurately reflect an organization’s financial situation. This endpoint enables automatic validation of financial reports, saving time and reducing errors during audits.

How It Works:

1. Document Upload:
   ○ Financial reports in PDF format are uploaded to the system.
   ○ Example: Balance sheets, income statements, cash flow reports.
2. Rule Definition:
   ○ Rules are established in a JSON file, such as:
   ■ Do they include dates for key transactions?
   ■ Are income and expenses categorized in detail?
   ■ Are references to specific accounting standards, such as IFRS or GAAP, included?
   ■ Is there a breakdown of assets and liabilities?
3. System Analysis:
   ○ The endpoint analyzes the documents for key information based on the defined rules.
4. Report Generation:
   ○ The report indicates:
   ■ Compliance with the rules.
   ■ Missing details or inconsistencies in the report.

Example:
The system identifies that a balance sheet lacks details on short-term liabilities, while income is categorized correctly.

Benefit:
Allows auditors to focus on critical areas, reducing the time required to conduct the audit.

Use Case 2: Anti-Money Laundering (AML) Compliance

Description:
AML compliance requires reviewing documents to ensure they contain sufficient information to prevent money laundering, such as customer data, suspicious transactions, and monitoring procedures. This endpoint automates document validation against AML policies.

How It Works:

1. Document Upload:
   ○ AML-related documents are uploaded to the system.
   ○ Example: Customer records, Suspicious Activity Reports (SARs), due diligence reports.
2. Rule Definition:
   ○ Example rules in JSON:
   ■ Does it include complete customer data, such as identification and address?
   ■ Are transactions exceeding legal thresholds mentioned?
   ■ Is there a record of suspicious activities?
   ■ Is the due diligence process detailed?
3. System Analysis:
   ○ The endpoint analyzes the documents to verify they contain all necessary information.
4. Report Generation:
   ○ The system indicates:
   ■ Fully compliant documents.
   ■ Documents with omissions or critical missing information.

Example:
The system detects that a client lacks adequate documentation to justify a transfer exceeding the established thresholds.

Benefit:
Helps organizations comply with AML regulations and identify potential legal risks.

Use Case 3: Credit Contract Review

Description:
Credit contract review ensures that contracts include all necessary clauses to protect involved parties and clarify financial terms. This endpoint automates contract validation, verifying compliance with established requirements.

How It Works:

1. Contract Upload:
   ○ Credit contracts are uploaded to the system.
   ○ Example: Personal, commercial, or mortgage loan contracts.
2. Rule Definition:
   ○ Example rules in JSON:
   ■ Are payment terms, such as dates and amounts, defined?
   ■ Are interest rates clearly specified?
   ■ Are penalties for non-compliance included?
   ■ Are guarantees or collateral mentioned?
3. System Analysis:
   ○ The endpoint validates each contract clause against the defined rules.
4. Report Generation:
   ○ The report details:
   ■ Present and correct clauses.
   ■ Missing or ambiguous elements.

Example:
The system identifies that a contract includes clear payment terms and interest rates but lacks clauses on penalties for non-compliance.

Benefit:
Ensures financial contracts are complete and aligned with internal policies and external regulations.

Common Benefits of the Three Use Cases

1. Time Savings:
   ○ Automates validation of complex documents, significantly reducing manual review time.
2. Increased Accuracy:
   ○ Minimizes human errors by systematically identifying inconsistencies and omissions.
3. Regulatory Compliance:
   ○ Ensures financial and contractual documents comply with local and international regulations.
4. Scalability:
   ○ Efficiently analyzes large volumes of documents, ideal for audits and mass reviews.
5. Detailed Reports:
   ○ Provides clear, structured results that facilitate decision-making and problem resolution.

Example of Generated Report

Credit Contract Review – Report
● Total contracts reviewed: 50.
● Fully compliant: 40.
● Detected non-compliance:
○ 5 contracts lack clauses on guarantees.
○ 3 contracts have ambiguous interest rate definitions.
○ 2 contracts lack penalties for non-compliance.
● Recommendations:
○ Add guarantee clauses to the 5 missing contracts.
○ Review interest rates in contracts with ambiguities.

Conclusion

Using this endpoint for financial audits, AML compliance, and credit contract reviews enables organizations to automate critical processes, ensure document accuracy, and achieve regulatory compliance. By generating detailed reports, this approach optimizes time, reduces risks, and enhances the quality of financial and legal processes.