There’s no longer any question that AI (artificial intelligence) is transforming the business world, and this is great news when it comes to successfully maintaining a corporate infrastructure modeled on the three pillars: governance, risk management and compliance (GRC).
Until now, the demands of GRC have been coupled with a spiraling need to increase productivity and cut costs in a hypercompetitive marketplace, turning this near impossible feat into a never-ending and often losing battle. But with the introduction of cutting-edge AI and NLP (natural language processing) technologies into the workplace, companies are discovering they can turn impossibility into reality.
Artificial intelligence has become an indispensable tool for humans to gain support in pretty much every aspect of running a business, and the methodology behind effective GRC is no exception. Much of a company’s compliance and regulatory measures center on the need for better decision-making; automating the processes that contribute to timelier, more informed decisions are a primary objective of emerging AI solutions.
AI is particularly adept at processing and analyzing large amounts of data to provide targeted courses of action for human consideration, and it’s these lightning-fast and highly refined suggestions that make it possible to streamline many of a company’s decision-making processes. As a key component of the newest evolution of artificial intelligence, natural language processing is the driving force behind computer programs that can understand human speech and language, both verbal and written.
A New Direction for NLP
Based on actual machine learning, NLP allows a program to not only recognize data patterns, but to subsequently improve its understanding of human linguistics. What this means for business documentation processes of all types is that written text can be understood and interpreted in context. With this application of deep analytics comes the ability for companies to improve both the accuracy and the efficiency of many of their back-office procedures.
Advanced data processing techniques like NLP are ideal for sifting through enormous volumes of paper and digital data to extract and analyze specific details. Automated auditing solutions that exploit NLP capabilities are basically turning the process of looking for a needle in a haystack on its head by using AI-based cognitive technology to perform mundane and time-consuming duties that have traditionally been performed by human workers.
Because this highly targeted process readily lends itself to such tasks as auditing and analyzing company expense reports, it’s quickly becoming the go-to method for:
- Reducing operational costs like those associated with T&E expense processing
- Improving overall operational efficiency
- Achieving and maintaining desired levels of GRC
Not only do automated auditing solutions work much faster than their human counterparts, they also perform more accurately because of their ability to cross-check data against thousands of external and social reference sources in real time. But rather than making human employees redundant, automated auditors are serving to strengthen the back-office workforce in a way that would normally be neither feasible nor cost-effective in human terms.
The arrival of NLP-integrated auditing is making it possible to fully automate any research and reasoning functions that would normally be performed by human expense auditors, and this means that existing personnel can concentrate on dealing with the vastly reduced number of company expense reports that actually warrant the use of their valuable time and professional expertise. With the grunt work removed, productivity and compliance go up while costs come down.
The Advantages of AI Expense Auditing Solutions
The combination of advanced computer vision, deep learning and NLP that lies at the core of automated auditing solutions like AppZen’s ReceiptIQ™ means that a company’s expense receipt auditing process can now go well beyond the simple checking of dates, amounts and merchant names.
With their ability to comprehend the full context of submitted expenses, these automated solutions easily detect unauthorized charges and upgrades on everything including:
- Air travel documents
- Cell phone bills
- Hotel bookings
- Car rentals
As a result, they stand to play a key role in monitoring and enforcing expense policy compliance and in preventing fraud.
The most recent report from the ACFE (Association of Certified Fraud Examiners) confirmed that expense reimbursement fraud continues to account for close to 14 percent of all company asset misappropriations and that most organizations typically lose about 5 percent of their annual revenues to fraud. All in all, the combined cost of fraud-related incidents in the ACFE’s 2016 report was a staggering $6.3 billion.
The sad reality inside today’s corporate environment is that most companies simply don’t have the time or the budget to audit every expense report that’s submitted for reimbursement and, in fact, end up performing a random sampling on only about 15 percent of these documents at best. Busy managers routinely approve unverified employee expenses. Despite good intentions in terms of well-established expense policies, lack of effective follow-up means that every business runs the risk of lost revenue and noncompliance.
Automated AI-powered auditing solutions are poised to change all that. At their most basic level, these systems are designed to review expense receipts and other documents in order to extract suspicious data. When they spot expense types or spend amounts that potentially fall outside the parameters of what a company’s policy deems acceptable, the AI will isolate and flag the data for further examination.
But it’s the depth of analysis that really makes this technology stand out. If a business has a strict no-alcohol policy, for example, these programs are sophisticated enough to detect the following:
- Disguised minibar receipts
- Specific cocktail names
- Thousands of different brands of alcohol
They’re also capable of verifying the legitimacy of various expense claims by checking restaurant names against online reviews and meal or conference guest attendees against news reports and official government documents.
This last element has proved to be particularly valuable in helping companies to avoid inadvertent business associations with anyone who might have been involved in criminal activities — a step that catapults the potential of AI expense auditing well beyond the level of simple policy compliance.