Balance sheet analysis, i.e. the examination of annual financial statements, and the resulting financial ratios are crucial for assessing the financial situation of companies. However, this process often leads to time-consuming processing phases and long waiting times.
An emerging trend in this area is the use of balance sheet analysis software, especially for banks and financial service providers. With a solution developed with the help of Konfuzio AI, we are entering a new era of balance sheet analysis, sometimes called "EBIL" or "Financial Spreading".
Balance sheet analysis, financial spreading or EBIL - what is it?
Financial spreading is the process of collecting and analyzing financial data from annual financial statements in order to obtain key figures on the financial situation of companies. These also form an important basis for analyzing and calculating credit risk assessments. These are key processes in the commercial lending business, but they can be time-consuming and lead to long processing and settlement times. Balance sheet analysis software can help to overcome these challenges.
Individual balance sheet analysis (EBIL) with AI
The process of analyzing the balance sheet can be Intelligent software simplify and optimize processes. To this end, Konfuzio AI was used to develop software that automates the relevant steps of the process and generates reliable key figures. This automation - Automated Financial Spreading - enables financial institutions to optimize the process of balance sheet analysis, increase efficiency and improve data quality.
Advantages of Automated Financial Spreading
The intelligent financial spreading software for banks and financial service providers offers a number of advantages:
Flexibility - You can use the financial spreading software to flexibly and specifically call up the data you need for your next evaluation or calculation.
Faster spreads - Financial Spreading Automation increases the efficiency and accuracy of key financial figures by automating manual data entry.
Consistency - Ensure a high level of consistency in key figures and analyses, improve data quality and minimize errors.
In addition to these benefits, the solution includes the ability to automatically extract financial data from documents. This includes support for PDF, JPEG, PNG, TIFF, scanned low-resolution and Excel document types in any source language.
Individual Balance Sheet Analysis (EBIL) - A look behind the scenes
When a client submits their annual financial statements or income statement, these documents are sent to the balance sheet analysis department. A key step in this process is the conversion of the balance sheet, SuSa or EÜR as an "individual balance sheet analysis" into the institute's digital valuation system.
EBIL is an indispensable tool for balance sheet analysis and corporate client business.
In EBIL, the individual items of the annual financial statements are transferred to specific accounts. The aim of EBIL analysis is to correct potential balance sheet cosmetics, known as "window dressing". This involves neutralizing income and expenses that do not correspond to the reporting year or the actual business purpose. In this way, an adjusted net profit for the year is presented, which in EBIL is referred to as "operating profit".
EBIL makes it possible to evaluate balance sheets and EÜRs efficiently and quickly.
Another advantage of the EBIL evaluation is that it enables a quick evaluation of the submitted balance sheets and EÜRs. EBIL offers several clear evaluation overviews for assets, liabilities and P&L of the balance sheet and enables a quick analysis of the balance sheet ratios at the push of a button.
Simultaneously with the entry of the individual financial statements, the customer data can be anonymously transferred to a data lake be transmitted to create a data pool for many different industries. This enables comparisons of a customer's balance sheet ratios with those of similar companies.
Repeated evaluations allow us to uncover trends over the years.
This allows you to see at a glance how a company compares to similar companies. If, for example, the return on sales of the evaluated customer is higher than the industry average in the reporting year, this is a positive sign. If the equity capitalization of comparable companies is higher than that of the customer, this should be closely observed.
EBIL allows us to better understand a company in the context of similar companies.
Overall, the EBIL evaluation provides you with valuable insights and makes your work much easier. It is an indispensable tool in our toolbox for balance sheet evaluation and for supporting our corporate customer business.
MaRisk and Automated Financial Spreading
With the 7th amendment to the MaRisk has the BaFin The European Commission has defined key requirements for the use of models and artificial intelligence (AI) in balance sheet analysis. These requirements are highly relevant for banks and credit analysts in particular, as they ensure that the models used to evaluate loans and assess risk are robust, comprehensible and reliable. We have summarized the most important contents of MaRisk Amendment 7:
Relevance of the requirements for the use of AI
- Responsibility of the institutes - The choice and use of models is the responsibility of the banks. It is required that the underlying assumptions are comprehensibly justified and that the suitability and appropriateness of the models are regularly reviewed. This ensures that the models, including the AI models, are sound and based on solid assumptions.
- Data quality - The banks must implement suitable procedures to ensure the quality of the underlying data. In particular, quality weaknesses must be identified and corrected. This is particularly important when using AI, as these models are heavily dependent on data quality.
- Use of the model results - Appropriate arrangements must be made for the use of the model results. This also includes the consideration of overrides, if relevant. This ensures consistent and comprehensible use of the models in practice.
- Regular validation - The banks must take a critical look at the limits and restrictions of the models and carry out regular validations. This includes checking the proper handling of the model results and the accuracy of the model. This is particularly important for AI models, as they are often complex and difficult to understand.
- Explainability of the models - In addition to accuracy, it is also important to ensure that the models are sufficiently explainable. This is particularly relevant for AI models, which are often regarded as a black box. A high level of explainability is necessary to create trust in the models and to be able to understand their decisions.
Uniform framework for balance sheet analysis
These principles create a uniform framework for handling data and ensure that all relevant levels and departments of the institutes work consistently. Clear and uniform structures and designations simplify the integration and evaluation of data. This minimizes sources of error and enables efficient processing and analysis of all relevant data.
For credit analysts and the IT departments of banks, this means that they must not only pay attention to the efficiency and predictive power of AI models, but also ensure that these models are transparent, comprehensible and based on high-quality data. Compliance with these requirements will help to increase confidence in the decisions made on the basis of these models and minimize the risk of wrong decisions.
BaFin's requirements are aimed at major institutions and cover key aspects of data management, data quality and the aggregation of risk data. These requirements are of crucial importance for banks and credit analysts in order to create a solid basis for risk assessments and decision-making processes.
MaRisk and Konfuzio - A comprehensive solution for financial institutions
Konfuzio is an innovative software solution for automated document processing and analysis based on artificial intelligence and machine learning. It meets the strict requirements of MaRisk Amendment 7, in particular the regulations in AT 4.3.4 and AT 4.3.5, and offers financial institutions comprehensive support in complying with regulatory requirements.
Konfuzio meets the requirements through a combination of automated data processing, robust validation processes and flexible aggregation and analysis functions. The software provides a comprehensive solution for banks and credit analysts to ensure that their data management and modeling processes meet the highest standards.
Conclusion - Balance Sheet Analysis Software, Credit Analysis Software and Automated Financial Spreads
Intelligent software can automate and optimize a wide range of tasks in banks and financial institutions. The financial spreading software goes hand in hand with Credit Analysis Softwareto provide you with a comprehensive platform for credit risk. These spreading tools allow you to capture financial data in an intuitive, web-based application, customize reported financial data and add comments directly in the spreading grid. The financial spread, i.e. the difference between the interest rates or yields of two different investments, can thus be easily determined and analyzed.
The solution developed by a Konfuzio partner that supports 3-29 Financial Statement Spreading is a comprehensive solution that helps financial institutions optimize their financial spreading process and manage credit risk more effectively.
Konfuzio also meets MaRisk requirements through advanced, automated data processing, robust validation processes and flexible aggregation and analysis options. The balance sheet analysis software is a comprehensive solution for banks and credit analysts to ensure the highest standards in data management and modeling. It supports financial institutions in meeting regulatory requirements efficiently and reliably.
EN 
DE 
ES 
FR