Challenge

The evolution of debtor finance demanded a new approach to payment processing, positioning Scotpac to reimagine their operational efficiency in serving Australia's growing SME sector. The SQL-based automation had started showing its age, unable to handle the increasing complexity of multi-party payments across diverse invoice formats and the manual allocation systems exposing critical bottlenecks and misallocations in the invoice reconciliation process. With knowledge workers spending up to 20 minutes per complex payment reconciliation and customer expectations rising for instant credit access, Scotpac identified an opportunity to harness Large Language Models for Payment Reconciliation. Through this strategic investment, Scotpac anticipated that automation of financial communications and documents at scale and reconciling with financial data in their enterprise databases will deliver the real-time accuracy and speed essential for their clients' healthy cash flow.

"In debtor finance, every minute of delay in payment allocation impacts our clients' working capital and their ability to grow their businesses. We recognized that our traditional SQL-based automation had reached its limits with the increasing complexity of modern payment structures and diverse invoice formats. When we evaluated generative AI's ability to understand unstructured financial documents and correlate data across multiple systems, we saw an opportunity to fundamentally reimagine our payment processing capabilities and set a new standard for the industry."

— Chief Technology Officer, Scotpac

Goals

• ScotPac automates complex payment allocations that currently require manual correlation across emails, invoices, and multiple systems, reducing processing costs while improving accuracy and scalability.
• ScotPac's clients get funds credited before office hours compared to after lunch historically.
• Evolve AI Labs customizes their Agentic Automation Solution for FinOps workflows expanding the coverage of Robust Automation Practices in the fintech industry.

Solution

Scotpac recognized that the next evolution of payment automation systems involved moving beyond rule-based systems to leverage the pattern recognition and language understanding capabilities of LLMs and Agentic Workflows. By partnering with Evolve AI Labs, they aimed to transform entity extraction and resolution from a labor-intensive manual process into an intelligent, automated workflow that could handle the complexity and variety of modern financial communications. The solution needed to seamlessly process unstructured emails, diverse invoice formats, and correlate information across multiple banking systems while maintaining the accuracy required for financial operations.

Evolve AI Labs rapidly developed a sophisticated two-stage solution leveraging Agents based on OpenAI models for entity extraction and advanced NLP techniques for entity resolution. The architecture intelligently processes emails and invoices through the LLM to extract key financial entities—debtors, payees, invoice numbers, and amounts—regardless of format or structure. These extracted entities are then matched against bank ledgers and back-office systems using Text Similarity algorithms optimized for financial data. Built on DataRobot and integrated with Azure's cloud infrastructure, Evolve AI Lab's solution includes automated pipelines, agentic workflows, LLMOPS, real-time monitoring dashboards, and cost optimization through intelligent caching of previously processed documents. This modular design allows Scotpac to scale processing capacity on demand while maintaining full visibility into system performance and allocation accuracy via AI Governance.

Impact

Leveraging Generative AI Automation has revolutionized Scotpac's payment processing capabilities, reducing allocation time from 20 minutes to just 10 seconds per debtor communication; a 120x improvement that fundamentally changed how quickly SME clients can access their working capital. This dramatic acceleration in processing speed, combined with enhanced accuracy in entity matching, has eliminated bottlenecks and reduced misallocations that previously constrained business growth and customer satisfaction. With the solution processing payments automatically 24/7, Scotpac has transformed a manual, error-prone rule based process into a competitive differentiator that directly impacts their clients' cash flow and operational efficiency.

Beyond immediate operational gains, Scotpac has established itself as a pioneer in applying generative AI to complex financial processes, setting new industry standards for FinOps automation. Evolve AI Lab's 12-week implementation timeline of this solution demonstrates that transformative AI adoption doesn't require lengthy development cycles, while their modular architecture design ensures scalability as transaction volumes grow. As Scotpac continues to expand the solution's capabilities to handle additional document types from pdfs to word, excel sheets and even photo scans in real-time, they are positioned to lead the digital transformation of the debtor finance industry. This strategic deployment of generative AI proves that innovative financial services companies can leverage cutting-edge technology to deliver tangible value to their SME clients while simultaneously improving allocation accuracy, reducing operational costs and improving service quality.

"What's truly transformative about this initiative goes beyond the dramatic reduction in processing time—though 120x faster processing is game-changing for our clients' cash flow. We've fundamentally reimagined how payment allocation should work in modern debtor finance. Our operations teams now have AI-powered tools that can understand and process the complexity of real-world financial documents that previously required manual interpretation. This positions Scotpac as a pioneer in applying generative AI to financial operations, demonstrating how established financial services companies can leverage cutting-edge technology to deliver exceptional value to SME clients while dramatically improving operational efficiency." — Chief Operating Officer, Scotpac