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5 Reasons Automated Due Diligence is the Future

Unlock your team’s ability to provide insights out of information

Modern technology has transformed how we work across practically every sector. Tech advancements have boosted productivity, enhanced working practices, and opened up new opportunities. The capabilities that automation offers in terms of efficiency and optimisation are now vital to any organisation’s survival, as well as growth.

 

However, most organisations have yet to adopt automation for their due diligence, a core and critical process. Applying automation to due diligence represents a potential sea change in cost-efficiency and return on investment. It can enable people to focus on the more complex analytical decision-making steps and other higher value tasks. This is especially true for any organisation that relies on its positive reputation and wants to continue to evolve in an ever-changing economy.

Fortunately, there are automated, AI-powered due diligence tools available and ready to deploy. First, let’s take a brief look at five major reasons why automated due diligence tools like these are the future.

 

Suggested reading: Fundraising has seen a major shift in recent years and its due diligence should follow suit. Read our blog Fundraising Due Diligence Procedures | How to Update Your Policy for 2022 to find out more.

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Reason 1. Process and deliver faster

The amount of information that is now publicly available online is vast. Everyone involved in due diligence also knows what a headache this is. Not only is the quantity huge, but it is growing at an accelerating pace. A due diligence process that doesn’t sift through all this information will always be missing important pieces of the picture. But human teams conducting due diligence cannot possibly do this quickly, if at all. 

 

An automated platform will be capable of quickly scouring through all of this publicly available data. Additionally, a smart platform will be able to pick out the most relevant information to your intended subject out of potentially millions of sources. With clear templates, the information can be presented in a usable form almost immediately. 

This last point is critical. A high-paced information environment demands quick, informed decision-making. Risk assessments need to be fed into this decision-making fast. An automated platform not only finds the information quickly but also immediately delivers it in an actionable format. Human teams however would be bogged down sifting through the information, and then bogged down again pulling it all together for presentation. 

Key Takeaways:

  • Publicly available online data is now fundamental for comprehensive due diligence. But this information is vast, and growing rapidly

  • Automated due diligence is well-equipped to tackle the immense task of researching, sorting, and presenting tasks that this environment entails. 

Reason 2. Consolidate and diversify abstract sources

As these already high volumes of online data grow, it becomes harder to correctly distinguish and sort between complex information. It is easy for confusion to seep into the process. For example:

 

  • Different people and even organisations often have similar or exact names. 

 

  • Information may be spread across multiple languages. 

 

  • So-called “grey literature” is difficult to retrieve and assess. 

 

All of this can be chaotic and difficult to parse. This can lead to missing key information about a subject – for example, a history of international financial crimes, or law firms’ filings in another jurisdiction.

Xapien’s intelligent automated due diligence platform addresses these problems. It is able to bring together structured data (databases, etc.) and unstructured data (news sites, corporate sites, blogs, etc.) across this wide field of information. This capability allows Xapien to verify information against a broader and more comprehensive data set, helping it screen out false positives. This has traditionally been work held back for humans, but automated solutions like Xapien are now able perform it. With only a few bits of context provided by the human user, automated tools can disambiguate between multiple sources. 

Key Takeaways:

  • The multitude of online data sources make it extremely difficult to find and isolate the data you need on your relevant subject.

  • Advanced automated tools can pick out relevant data and tell what data is related, based on the context provided.   

Reason 3. You get reliable support

Given this huge amount of information that needs examining, manual due diligence processes are likely to miss important insights. One solution organisations often adopt is to bring in even more people to perform the task. However, many hands don’t necessarily mean lighter work. And they often don’t mean greater detail and accuracy. Instead, they often lead to more complexity and confusion. This can lead to missing key information about a subject.

 

An automated platform, on the other hand, brings the processing power of even more “many hands” to the task, without the downsides. An automated due diligence platform serves as a single, one-stop solution. This, in turn, allows the human team to quickly analyse the outputs and make informed decisions. Such an automated system is reliable, offers consistent support, and provides room for organisations to evolve beyond their due diligence.

Key Takeaways:

  • Manual due diligence is not reliable when it comes to the level of detail required in today’s information environment. 

  • Automation can serve as a kind of security blanket for organisations.

  • Automating due diligence does not, and should not, mean replacing human teams but rather supporting their goals and work.

 


Suggested reading: Check out our explainer Reputational Due Diligence in 2022 to find out how exactly reputational due diligence should be conducted this year (and beyond).

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Reason 4. Uncover paths to growth

Automated due diligence can identify insights that are avenues for growth for an organisation, in addition to potential risks. Examples include information about a subject’s other relationships that can be mutually beneficial if uncovered. Or they might include the identification of other possible fundraising prospects. The depth and breadth of insights an automated platform generates help with relationship-building beyond safeguarding.

 

It is just as important for organisations to find ways to deepen their relationships as it is to protect them. In this way, an automated platform provides the capabilities to go beyond the traditional scope of fundraising due diligence. Whether the insights are negative, positive, or neutral, the range of information uncovered can be invaluable. Further, because automated processes are so quick, they can be acted upon constantly. 

Key Takeaways:

 

  • Due diligence research should not just be about identifying and avoiding risks. It should also be about uncovering paths for growth and deepening relationships.

  • Automated due diligence makes this possible. An automated platform has built-in abilities to deliver a full scope of insights. 

Reason 5. Digital is here to stay

Our world has been transformed by digital technologies. But these technological tools are not static, they are dynamic and ever-advancing. The nature and amount of information available also continues to grow and evolve. 

 

Automated solutions are uniquely equipped to keep pace, even as the priorities in regards to due diligence change and advance over time. Already the best offerings are using machine learning and artificial intelligence to further increase efficiency and effectiveness. Organisations that incorporate an automated platform into their due diligence therefore “future-proof” their processes. This will naturally help them keep an edge over the competition. 

 

In today’s digital world, those that don’t take up automation risk being left behind. Human teams will be slower to recognise where changes to processes and methods are necessary, and even slower to implement them. Automated platforms are much more likely to quickly identify and implement scope for upgrades. The digital age requires digital approaches. 

Key Takeaways:

  • Automated due diligence allows organisations to stay up-to-date and in-tune with the digital landscape. 

  • Use of an automated platform also provides organisations with an advantage over competitors. This advantage will remain or widen as automated platforms keep up with potential upgrades.

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Stay in the future with automated due diligence

Automated solutions are now vital for organisations wishing to perform comprehensive fundraising due diligence. As we have described, this manifests in several ways. The sheer amount of publicly available online information is impossible for human teams working manually to sort through and present quickly. Human teams also take too long to cross-reference information and are prone to mistakes. Meanwhile, an automated platform is consistently reliable, and can offer insights for growth and relationship-building. The digital age is here to stay and fast pivots in methods or upgrades are best delivered by an automated solution. 

 

Use of an automated due diligence platform represents a competitive advantage that will only grow in the future. This does not mean that humans should be replaced. Automated due diligence is a multiplier; it enhances team productivity and their workflows. It also unlocks the team’s ability to provide constant input for decision-making. 

 

 

 

Suggested reading: Reputational risk can be damaging to any organisation — but automation is key to sidestepping sources of it. Find out more with our blog How to Prevent Reputational Risk | Rethinking Your Strategy for 2022

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Try Xapien

Xapien’s tools democratise access to automated due diligence for organisations across all sectors, no matter their size or level of growth. Any team can now reap the benefits of due diligence automation for themselves.  

 

Xapien is a single, catch-all tool that saves you time and money by optimising your procedures. The platform scours millions of publicly available online data sources with just a few provided terms of context, and delivers a standardised, easily-digestible report in a matter of minutes. It also incorporates smart functions to cross-reference and disambiguate between different data sources, including a multilingual feature that guarantees no “hidden” sources go uncovered.

 

If you want to see Xapien’s powerful tools in action, click here now for your free demo.

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