OCR vs. IDP: Which Is Better for Your Business ROI?

Businesses are growing, necessitating cutting-edge technologies to streamline business operations and ease document-related tasks. In industries with higher volumes of physical documents,  we commonly use OCR or IDP to digitize documents so that the textual content can be electronically edited, searched, and stored in the company's database.

 Automated document processing helps industries streamline operations and transform traditional paper processing methods. By expediting the documentation process with the help of AI software implementation, the overall customer experience improves. From the point of view of business, it improves accuracy in extremely important jobs and procedures that are particularly vulnerable to mistakes made by people, such as data verification, the gathering of information, or any other further processing of data. 

If you are new to this and are willing to find out which is better for your organization, let us walk you through a brief guide on OCR vs. IDP and how utilizing AI can help you succeed in this technological age and expand your business.

What is OCR?

OCR is the abbreviation for optical character recognition. OCR technology reads, extracts, and analyses text from scanned documents and photos to create machine-readable text. OCR technology is widely utilized in many industries for activities like document digitization, data extraction from invoices and receipts, data entry process automation, and enhancing accessibility for people with visual impairments.

How Do You Process Documents with OCR?

• OCR starts with the file you want to extract data from. This file can be an official documentation image, a scanned document, or a PDF. 
• After that, using extraction models developed to identify words and lines in the image, the OCR algorithms will extract the specific characters they recognize.
• Subsequently, the extracted data is examined with a pre-defined set of templates or patterns representing standard characters and symbols.
• Following the completion of the character recognition process, language modeling, content analysis, or spell-checking are used to ensure that accuracy is maintained.
• The software will then produce a final version of the machine-readable text.

What is IDP? 

Intelligent document processing, or IDP, allows data embedded in business documents across all industries to be automatically captured, extracted, and processed. IDP uses machine learning (ML) and artificial intelligence (AI) techniques to read, comprehend, and process structured, semi-structured, and unstructured data in documents like humans.

How Does Intelligent Document Processing Work?

• IDP uses machine learning models to classify documents into different categories based on their content, layout, or other characteristics. 
• The documents, sorted by type, undergo examination. Models scrutinize the data comprehensively, extracting details analytically, like a person.
• The information is then examined for accuracy against predetermined guidelines; if errors are found, the information is tagged for human review. 
• The human-in-loop (HITL) feedback helps with the continuous improvement of the extraction model.
• Natural language processing (NLP) enables understanding of data. It identifies and extracts unstructured data with high recognition. The data functions are similar to those of the human brain.

Where Can You Utilize IDP and OCR?

IDP and OCR are beneficial in many distinct fields, as they help make the documentation process faster. A few of the advantages are listed below:

Processing invoices

Compared to manual processing, OCR, or Intelligent Document Processing (IDP), can process invoices up to 81% faster. As a result, there will be fewer instances of late payments and more opportunities to take advantage of early payment savings. It also expedites audit procedures. 

Processing Insurance Claims 

Every industry has a bundle of forms that need to be processed. In the insurance sector, it may be a claims form. By employing OCR or IDP for data automation, you can reduce the time spent reading, processing, and transferring information to your workflow process. It eliminates costly, time-consuming, and error-prone manual data entry, improves performance, and increases efficiency.

Processing Loan Applications

The loan disbursement process is easier using Intelligent Document Processing (IDP). The verification process is made easier by advanced AI. The platform validates customer information in real-time and verifies the authenticity of documents. The procedure involves using government-issued identification to verify the customers' identities, pay slips to confirm employment details, and bank statements to confirm repayment eligibility. 

With the help of this system, lenders reduce the risk of missing important information during the verification process and can protect themselves from fraud. 

Mortgage Processing

Nowadays, almost all of the working sector uses IDP, or OCR, for document processing. When it comes to the banking sector, the use of automated data is beneficial for mortgage processing. The use of AI tools helps cross-check whether the assets that the borrower keeps in the bank for mortgages are legally correct. This helps the banks and other big financial organizations maintain the data and protect themselves from any fraudulent activity. It also aids the organization in speeding up the functioning of the industry.

The Difference Between OCR and IDP

OCR vs. IDP: Which Is Better for Your Business ROI? 

There are a few factors that make IDP superior to the other options for the expansion of your company. 

Time-saving

The organization can benefit from increased effectiveness and time savings by implementing IDP, especially for sectors like financial services, legal, logistics, and transportation that deal with a lot of paperwork. The majority of businesses observe a 90% reduction in invoice processing times. Even the accounts staff members spend 30% less time answering inquiries, and as a result, employee productivity increases by 400%. With Intelligent Document Processing (IDP), tasks can now be completed in less than an hour.

Improved accuracy

In contrast to humans, machines are not distracted or fatigued and do not make costly mistakes. With IDP, operations happen more quickly, and there are almost zero errors, thereby enhancing the organization's overall functioning.

Better client support

Improved client support is a direct outcome of IDP, accelerating processing times, enhancing data accuracy, and enabling faster responses to client inquiries. This leads to heightened customer satisfaction and loyalty, driven by an overall superior customer experience.  

Faster decision-making process

IDP speeds up decision-making by quickly analyzing and drawing conclusions from documents. In sectors like finance and customer service, where prompt decisions can make a big difference, IDP can be combined with other digital workflows and systems to facilitate smooth and effective digitization of business processes throughout every department of your business and the board.

Enhance compliance and security

By ensuring that documents undergo processing following established guidelines and regulations, IDP can assist in enforcing better compliance and the security of the documents shared.

Raise the bar: Elevate the Standard of Document Processing with Infrrd

We at Infrrd believe that IDP can help you eliminate the barriers that slow down your company's document processing. Our Intelligent Document Processing (IDP) solution transcends basic OCR capabilities, integrating advanced AI techniques like natural language processing (NLP) and machine learning. This enables a deeper understanding of document content and context, empowering businesses to extract text and comprehend relationships and meanings within documents. Trusted across finance, legal, insurance, and logistics sectors, Infrrd IDP streamlines automated data processing, freeing up resources for core operations and ensuring superior outcomes. 

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