Using Artificial Intelligence to Automate Expense Report Audit, Fraud Detection, and Risk Compliance

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1 Using Artificial Intelligence to Automate Expense Report Audit, Fraud Detection, and Risk Compliance August 2016 Artificial Intelligence for Business Manual expense audit leaves companies vulnerable to fraud & compliance risk 1 2 Artificial Intelligence and Big Data technology are now being used to effectively analyze expense report data helping companies save over 80% in audits costs Not only are audit costs reduced by using Artificial Intelligence AI can also save millions on detected fraud and waste, while proactively managing regulatory compliance Companies today rely on manual audit to detect fraud and compliance issues in their employees expense reports. Due to the large volume of data that needs to be researched and investigated, it is difficult for auditors to detect most issues, despite using expense policies and traditional violation flagging tools. In addition to being inefficient, this leaves companies vulnerable to fraud and compliance risks. AppZen.com

2 1 2 Why is manual audit of expense reports inadequate? $441 billion is lost annually to expense report fraud because of $441 billion is lost annually to T&E expense fraud inadequate checks Expense report audit today is manual and primarily only involves verification of receipts and documents Companies spend more than 7% of their budget on T&E expenses, however compliance and audit of these reports is completely manual. Since not all risks can be identified manually, this is inefficient at best, potentially exposing them to fraud, misuse and wastage. A recent survey Manual audit of every conducted by the Association of Certified Fraud expense is time Examiners (ACFE), shows that businesses have consuming and stronger reasons to be concerned about fraud. expensive with most 441 billion dollars are lost annually to T&E expense audits not actually fraud. Having expense policies and flagging showing any actionable policy violations is just not enough what s issues needed is the ability to analyze the human Auditors struggle with behavior being used to circumvent those policies. massive amounts of data and lack of context to detect fraud patterns and spend anomalies 2 AppZen.com

3 Using Artificial Intelligence to automatically audit expense reports AppZen uses artificial intelligence to automate expense report audit and instantly detect fraud and compliance issues. The patent-pending data science technology instantly analyzes receipts, credit card transactions, travel bookings and other data to enable your business to automatically audit 100% of your expense reports. Detect issues such as fraudulent claims, duplicate charges, abnormal expenses, and regulatory compliance violations AppZen s machine learning detects patterns and anomalies, automatically flagging fraudulent and noncompliant expenses. AppZen learns based on usage, so it can determine the legitimacy of every expense and detect issues such as fraudulent claims, duplicate charges, abnormal expenses, regulatory compliance violations, and accidental misuse from habitual offenders. 3 AppZen.com

4 AppZen s unique approach for automated detection of fraud & compliance issues Natural language processing (NLP) technology automatically extracts information from both structured and unstructured expense data such as expense descriptions, merchant information, location, receipts, and more Anomaly detection: Identifies anomalies in expense spend. Uses data mining to automatically detect spend patterns for merchants, categories, and locations across employees and organizations With AppZen, 100% of expenses are checked and given a risk rating Automates human research: Crosschecks thousands of external & social data sources in real-time to determine the accuracy of every expense giving you the true business of merchants, reference pricing, and even background information for external attendees 4 AppZen.com

5 How does it impact you? AppZen s patented algorithms have learnt from analyzing millions of expense reports and data points. AppZen s solution is able to provide immediate ROI by not only reducing audit costs by 80%, but also saving millions in actual T&E expenses. The chart below represents the results of automated expense report analyses performed by AppZen to detect fraud and errors across companies of various sizes. Companies of all sizes are seeing savings around 5% of their total T&E expenses after implementing AppZen. $80 $70 $60 4.7% 2,500 2,000 $50 4.6% 1,500 $40 Savings in T&E detected Expense Report Spend $30 5.9% 1,000 Number of Employees $20 $10 7.7% 500 $000 $- Company 1 Company 2 Company 3 Company 4 - Savings of 5% of total audit expenses Reduction in audit costs by 80% 5 AppZen.com

6 Thank you. For more information please contact: Tel: AppZen.com