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Purpose and Functionality

The Bank Statement Analyzer is designed to empower users with deep insights into financial transactions, enabling better financial decision-making.

Leveraging advanced algorithms, the Bank Statement Analyzer automatically categorizes transactions, identifies trends, and flags significant financial activities. It offers a range of outputs such as detailed transaction lists, categorized expenditures, income profiles, and investment tracking.

Detailed Features of Bank Statement Analyser API

Here’s an overview of the detailed features provided by this API:

Transaction Analysis

All Transactions: Lists every transaction from the bank statement, including details like date, amount, type (credit or debit), and category. This helps users get a complete overview of their financial activities over a specified period.

Transaction Sorting: Provides lists of all transactions sorted by credit and debit in descending order, making it easier to identify significant inflows and outflows.

Top Transactions

Top 5 Credit and Debit Transactions Monthly: Identifies the five largest credits and debits for each month, highlighting major expenses or income sources. This feature is crucial for quick financial assessments and spotting significant transactions that could impact cash flow.

Cash Flow Analysis

Monthly Cash Flow: Offers a detailed view of total monthly inflows and outflows. This helps in understanding liquidity patterns and financial stability, assisting in budget planning and financial forecasting.

Financial Obligation Ratio (FOIR)

FOIR Calculation: Computes the Fixed Obligation to Income Ratio, which is a measure of how much of a person’s income is dedicated to debt repayments, including loans and credit card bills. This is critical for assessing loan eligibility and financial health in the Indian context.

Recurrent Transactions

Recurrent Credits and Debits: Detects and reports recurring financial transactions such as rents, utility bills, subscriptions, and EMI payments. It separates these by both name and amount to help users manage regular financial commitments efficiently.

Categorization by Month and Overall

Monthly and Overall Category Analysis: Breaks down income and expenses into categories (like rent, shopping, investments) on a monthly and overall basis. This categorization helps in tracking spending habits and income stability over time.

Investment Tracking

Investment Credits and Debits: Tracks money flows associated with investment activities, such as stock trading or mutual fund investments, providing insights into investment patterns and their outcomes.

SIP and Income Profiles

Last SIP Data: Provides details on the latest Systematic Investment Plan transactions, including date, amount, and count of transactions.

Income Profile: Summarizes sources of income identified in the bank statement, helping users understand their primary and secondary income streams.

Loan and Obligation Profiles**

Loan Profile: Lists transactions related to loan payments, essential for tracking debt repayment.

Obligation Profile: Details fixed obligations beyond debt, such as rents or scheduled payments, critical for financial planning.

Risk Flags

Betting and Cash Withdrawal Flags: Identifies potentially risky transactions related to betting or unusual cash withdrawals, providing alerts to mitigate potential financial risks.

FOIR Flags: Alerts users when the FOIR exceeds typical thresholds, indicating financial stress or over-leverage.

Input

The Bank Statement Analyzer API takes as input the account information which is fetched securely through Finsire's Account Aggregator API integration.

The input typically includes comprehensive transaction data from an individual’s bank account(s), which is accessed based on the user's consent. This data encompasses transaction dates, amounts, types (credit or debit), modes of transaction (e.g., UPI, IMPS, NEFT), and transaction descriptions, which provide context and categorization.

Ouput

The API processes the input data to provide a variety of outputs that are crucial for detailed financial analysis:

All Transactions List: Consolidated record of all financial transactions, categorized into credits and debits with detailed attributes like date, narration, and balance.

Top Transactions: Identification of the highest monetary transactions for both credits and debits each month, useful for pinpointing significant financial movements.

Cash Flow Details: Monthly breakdown of total cash inflows and outflows, assisting in liquidity assessment and financial planning.

Fixed Obligation Ratios: Calculated FOIR values to evaluate financial health and loan repayment capacity, presented with percentage values and comparative thresholds.

Recurring Payments Detection: Detailed tracking of recurring financial obligations and income like rent payments and salary credits, categorized by frequency and amount.

Spending and Income Categorization: Analysis of transactions categorized by nature and type over different time frames, aiding in budgetary control and financial overview.

Investment Activities: Insights into transactions related to investments, capturing both inflows from dividends or sales and outflows from purchases or fees.

SIP Details: Specific data on SIP transactions including the amount and frequency, are crucial for tracking regular investment activities.

Income and Loan Profiles: Summaries of the sources of income and details of loan-related outflows, providing a clear picture of earnings and debt commitments.

Risk Alerts: Flags for activities like betting or unusual cash withdrawals, and high FOIR indications, which signal potential financial risks or stresses.

Broad applications of the Bank Statement Analyzer API

Banks

Credit Risk Assessment:

• Use transaction histories and cash flow data to assess the creditworthiness of loan applicants.
• Evaluate FOIR (Fixed Obligation to Income Ratio) to determine the ability of customers to meet existing and potential financial obligations without defaulting.

Personalized Banking Services:

• Offer tailored banking products based on detailed transactional behaviour and spending patterns.
• Enhance customer retention strategies by understanding the financial needs and habits of clients through their transaction narratives and recurrent payment data.

Non-Banking Financial Companies (NBFCs)

Loan Processing:

• Automate and streamline the loan approval process by quickly analyzing bank statements to verify income and expenditure.
• Detect recurring income and obligations to establish loan amounts and terms that fit customers’ financial situations.

Fraud Detection:

• Identify irregular activities and red flags, such as betting transactions or unusual cash withdrawals, which could indicate fraudulent behaviour or financial distress.

Wealth Management / Stock Brokers / Asset Management Companies

Holistic Client Profiles:

• Develop comprehensive financial profiles of clients by analyzing income sources, investment activities, and spending habits.
• Tailor wealth management strategies based on the detailed classification of income and expenditures, identifying potential areas for investment or savings.

Investment Strategy Development:

• Use data on investment credits and SIP contributions to advise clients on portfolio diversification and rebalancing strategies.
• Recognize patterns in investment and divestment to optimize timing and asset allocation.

Risk Management:

• Evaluate clients’ financial health and risk tolerance based on their fixed obligations and income ratios (FOIR), ensuring that investment recommendations align with their capacity to absorb financial shocks.
• Monitor cash flow trends to preemptively address potential liquidity issues in clients’ portfolios.

Fintech Companies

Features as an Acquisition Channel:

• Integrate detailed categorization of spending into personal finance apps to help users budget better.
• Provide insights into investment habits, SIP contributions, and overall financial health through easy-to-understand visual analytics.

Customer Service Enhancement:

• Improve customer interaction by having a holistic view of customer transactions and financial behavior.
• Provide proactive advice based on financial behaviour trends indicated by the API’s outputs.

Product Development:

• Design and offer products that match the specific needs of different customer segments identified through transaction patterns and financial behaviours.
• Develop credit products with varying interest rates based on individual risk profiles calculated from transaction data.