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5 Use-Cases of RAGs in Finance

In a recent article we discussed how Retrieval Augmented Generation (RAG) works and how it can be beneficial for knowledge workers in general. In a previous article we provided a list of popular use-cases for RAGs across industries. In this article we focus on purely the Finance domain and the processes where RAGs are specifically interesting. Here are our top 5 Use-Cases in Finance:


1. Mergers and Acquisitions (M&A) Due Diligence


  • Use-Case: M&A teams can deploy RAG models to retrieve and analyze vast amounts of data, including financial statements, market conditions, and legal documents, to assess the viability of potential acquisitions.

  • Benefit: Enhances the thoroughness of due diligence processes, reducing the risk of poor investment decisions.





2. Credit Risk Assessment


  • Use-Case: Financial institutions can utilize RAGs to assess the credit risk of borrowers by retrieving and analyzing historical credit reports, market conditions, and socio-economic data.

  • Benefit: Enhances the accuracy of credit scoring and reduces the risk of loan defaults.


3. Fraud Detection and Prevention


  • Use-Case: Banks can deploy RAG models to identify fraudulent transactions by retrieving and analyzing transaction history, user behavior, and external fraud patterns.

  • Benefit: Improves the detection of fraudulent activities in real-time, minimizing financial losses.


4. Regulatory Compliance and Reporting


  • Use-Case: Compliance teams can leverage RAG models to retrieve and synthesize regulatory updates, legal documents, and previous compliance reports to ensure that financial institutions meet regulatory requirements.

  • Benefit: Reduces the risk of non-compliance and streamlines the reporting process.


5. ESG (Environmental, Social, and Governance) Investment Analysis


  • Use-Case: Investment firms can use RAGs to retrieve and analyze ESG data from various sources, integrating it into investment decision-making processes to ensure responsible investing.

  • Benefit: Supports sustainable investing by providing comprehensive ESG insights.


There are many more use-cases but with these we show the most important ones we see on the Structize AI platform.


Want to learn more?


Are you interested in how your organisation can benefit from Retrieval Augmented Generation (RAG) to give superpowers to your financial or legal advisors ? Book here a demo to learn more about Structize AI!




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