ClearBank harnessing AI to reduce payment recovery processing time by 80%
ClearBank, the enabler of real-time clearing and embedded banking, is using AI technology to speed up its credit payment recovery processes, improving how it resolves banking errors, and helping analysts focus on pro-active client support.
ClearBank doesn’t have consumer, retail banking customers, but enables digital-first experiences for more than 220 financial institutions, including banks, credit unions, building societies, financial technology companies, and digital asset firms. Its services encompass real-time payment processing, embedded banking solutions, and agency banking.
Clients can access systems like CHAPS (the bank-to-bank Clearing House Automated Payment System) and Faster Payments simply by connecting to a ClearBank API.
Speed and reliability are vital for these clients, especially when it comes to recovering errors in payments – for example when funds are sent to the wrong recipient.
By using Microsoft Azure’s AI capabilities, ClearBank trained its system to apply payment scheme rules, assess claims and either validate or reject them much more quickly. Alongside Microsoft’s automation tools, this will reduce the time the payment recovery process takes by 80%.
Phil Rivers, UK Chief Operating Officer at ClearBank, says: “In the UK, there are strict guardrails and specific rules you have to follow when supporting clients who are trying to recover funds, such as turning claims around within two working days.
“Plus, the faster a valid claim is passed on, the more time our clients have to process it and chase down the money, which improves recovery rates.
“However, assessing whether a claim is valid is a time consuming, manual process. It involves our analysts referring to rules that sit within a complex 80-page document.”
Automating using AI is radically improving processing times.
In 2023, ClearBank achieved a 91% year-on-year income growth, reaching £111 million and more than doubling customer deposits to more than £6 billion. It also increased payment volumes by 54% to 108 million transactions for the year.
Humans in the loop
ClearBank’s analysts and risk assessment team have been involved in the project the whole way through, working hand in hand with developers to ensure the AI is as accurate as possible. Making the most of AI in a safe, secure and responsible manner is of the utmost importance given the bank’s stringent compliance and operational standards.
“Seeing the positive impact on our analysts’ time and energy has been especially rewarding,” says Rivers.
“This AI deployment will continue to enable them to handle more cases while reducing their workload and free them up to provide clients with more holistic, forward-looking support.
“This includes trend analysis, spotting recurring bottlenecks, and working more proactively to put the right controls and best practices in place.”
Rivers adds that “we see compounding value in being able to maintain a structure that’s as lean as possible while growing the volume of transactions we can handle, without a corresponding increase in our operational costs.”
Infrastructure to accelerate AI
ClearBank says it is well-positioned to scale up AI and automation use cases safely and securely due to the robust infrastructure it has built using Microsoft Azure. Since moving operations to the cloud, ClearBank has established a modular, API-driven platform capable of processing 30 million payments a month.
This infrastructure underpins ClearBank’s digital-first strategy, enabling swift adoption of AI-driven innovations like its automated payment recovery process. The same foundation is supporting ClearBank’s exploration of AI for further potential applications, including fraud detection, complaints handling, and beneficiary non-receipt claims. Other potential uses include financial crime compliance and risk appetite analysis.
As the organisation continues to expand globally, its commitment to responsible AI development ensures it remains at the forefront of financial services evolution.
Rivers concludes: “Thanks to AI, we are freeing our team from time-consuming back-office tasks, empowering them to engage with clients more personally and effectively.”
“With the solid foundations we have in place, we are well positioned to drive growth while staying lean, maintaining trust and security, and driving operational excellence.”