How AI categorisation works

keel uses AI to categorise your bank transactions automatically. It reads merchant names, transaction codes and your household's own history to assign each transaction a category — and when it isn't sure, it asks rather than guesses.

The result: after your first import or two, the large majority of transactions arrive already categorised, and the review queue only shows the genuinely ambiguous ones.

How it works

The pipeline

1. Transactions arrive from a statement import.
2. Merchant names are cleaned up — transaction IDs, codes and noise stripped out.
3. keel checks whether your household has seen this merchant before. If there's a confident match, the transaction is categorised instantly — no AI needed.
4. The remaining transactions go to the AI in batches.
5. Each comes back with a category and a confidence level.

Confidence levels

How confident keel is	What happens	Where it appears
Confident	Categorised automatically, marked done	All Transactions
Somewhat confident	The suggestion is shown for you to confirm	Review queue
Not confident	keel asks, with no suggestion	Review queue

keel is deliberately conservative: it only auto-categorises when confident, and sends person-to-person payments and payment processors (GoCardless, PayPal) to the review queue rather than wrong-guessing. A payment addressed to a bank's own name also goes to review — it could be a loan, a mortgage, a card or an overdraft, and keel would rather ask than guess.

How insurance is categorised

Many insurers sell several kinds of cover, so keel categorises a policy by what it protects rather than by the brand. Cover for a person — private medical, life, income protection — goes to Health & Medical. Cover for your home goes to Home Insurance. Cover for a vehicle goes to Vehicle Finance & Insurance. When a payment shows only the brand with no hint of the product, it goes to the review queue so you can place it.

What the AI considers

• The merchant name and its cleaned-up variants
• The bank's transaction code (DD for direct debit, FPI for faster payment in, and so on)
• UK-specific patterns — council tax, water companies, insurers
• Your household's past categorisation decisions
• Each category's description and example merchants

Large imports

Small imports are processed in real time. Larger ones run in the background — you can navigate away and come back; keel checks progress automatically. If a batch fails, you can retry from the dashboard or the import page.

Learning from you

keel learns merchants two ways: when the AI categorises a merchant with high confidence, it remembers; and when you confirm or correct a category, that decision always wins over anything the AI learned. Correct a merchant once and every future transaction from it is categorised correctly. Full details in How keel learns your merchants.

The explanation line

Every categorised transaction carries a one-line explanation of what keel thinks it is. Usually that comes from the AI. For a handful of well-understood transaction types — credit card payments, savings deposits, pot transfers, internal transfers, savings interest, confirmed subscriptions, and known direct-debit fixed costs — keel uses clear standard wording instead when the AI's own explanation would have been vague. If the AI wrote something specific and useful, that's kept.

Why it works this way

Cautious confidence means fewer wrong guesses to undo. And the learning is household-specific: your corrections train your keel, not everyone's — so your "Tesco is Groceries except the petrol station" stays yours.

FAQ

Why is keel asking me about obvious transactions? The AI is being cautious. Once you confirm, it learns and won't ask again.

Does correcting one transaction fix all future ones? Yes, for the same merchant — the learning persists across all future imports.

Can I re-run categorisation? Yes — from the dashboard if a batch fails, or via the import page.

Why did my car insurance land under Vehicle Finance & Insurance, not Health? keel categorises insurance by what the policy protects. A motor policy belongs with your other vehicle costs; a health or life policy belongs under Health & Medical. If the brand alone was visible and keel couldn't tell which product it was, it would have asked you in the review queue instead.