How Bank Has Automated the Document Review Process to Identify Potential Fraud with AI

A I • Oct 03,2024

Summary:

By leveraging advanced natural language processing and ML techniques, JPMorgan Chase has significantly improved the efficiency, accuracy, and consistency of their document review processes to identify potential fraud.

Problem Statement: 

JP Morgan Chase & Co. is one of the largest financial services firms in the world, offering a broad range of services including investment banking, asset management, and consumer banking. 

With a vast amount of legal documentation generated daily, the need for efficient analysis and management of contracts became apparent.

Legal departments typically manage an overwhelming volume of contracts and documents, which can be time-consuming and prone to human error. The manual review of contracts can lead to delays in decision-making, compliance risks, and potential financial losses. JP Morgan faced the challenge of improving efficiency in contract analysis while maintaining accuracy and compliance with legal standards.

 

 

Results: 

  • Reduced time required to review legal documents from 360,000 hours annually to mere seconds. 
  • Reduced operational costs. 
  • Ability to to manage a larger volume of contracts and agreements without needing a proportional increase in manpower. 
  • Legal professionals can focus from repetitive tasks to more analytical and strategic roles.
  • A near-zero error rate.

AI Solution Overview:

JPMorgan Chase developed an AI tool called COIN (Contract Intelligence), which harnesses artificial intelligence to make the legal document review process more efficient. COIN is specifically designed to analyze and extract important data from legal documents, particularly commercial loan agreements, a task that traditionally required around 360,000 hours of manual work each year.

By implementing COIN, JPMorgan Chase has drastically transformed this process, reducing the time and resources needed. The platform automates the review of certain types of contracts using AI with minimal human oversight. Running on a private cloud, COIN employs image recognition technology to compare clauses and identify key differences. In its initial phase, COIN extracted about 150 relevant data points from business credit agreements in seconds, eliminating the need for extensive manual labor.

The AI system processes around 12,000 commercial credit agreements annually, not only cutting costs but also greatly minimizing the risk of human error. COIN is so accurate that it achieves an error rate close to zero, a level of precision that would be extremely difficult to reach through manual reviews.

References: 

  1. How JPMorgan Chase’s COIN is Revolutionizing Financial Operations with AI. https://medium.com/@the_AI_ZONE/how-jpmorgan-chases-coin-is-revolutionizing-financial-operations-with-ai-120a2938dab7
  2.  J.P Morgan – COiN – a Case Study of AI in Finance. https://superiordatascience.com/jp-morgan-coin-a-case-study-of-ai-in-finance/
  3. Case Study: JPMorgan Chase’s Contract Intelligence (COiN) platform for Document Analysis. https://www.linkedin.com/pulse/case-study-jpmorgan-chases-contract-intelligence-coin-jorge-chirinos-qcyje/
  4. Banking on Artificial Intelligence: How JP Morgan Uses AI to Lead the Banking Industry. https://www.atliq.ai/banking-on-artificial-intelligence-how-jp-morgan-uses-ai-to-lead-the-banking-industry/

Industry: Financial Services

Vendor: JP Morgan Chase & Co.

Publication Date: 2024

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