Manual processes have slowly begun to disappear within several industries and across various verticals. Businesses are now transitioning to the digital system of working. Optical Character Recognition (OCR) technology is one such advanced tool that allows financial institutions to ditch the route of excessive labor and hefty paperwork involved in the process of keeping a record of the loans, maintaining monthly statements, and other services.
To stay in the competition, loan marketplaces, lending institutions, both non-banking and non-banking leverage advancements in Artificial Intelligence, Voice Recognition, Machine Learning, and Video Recognition. The technology is helping them to transform every aspect of their businesses.
Read on to know how NBFC’s and insurance companies are leaving behind the outdated formats with the help of this technology.
OCR Technology – Overview
OCR technology is like a magic weapon for financial institutions as it can scan a document’s contents into the digital format. With this tool, the material can be accessed and read digitally, which can be used further for multiple functions, such as in machine learning models.
Let’s learn how this technology accelerates the success of loan and insurance providing companies.
Data Recognition and Extraction from the Documents
The document recognition feature of technology allows organizations to enhance their productivity. Unlike other tools, it detects the field before object recognition. It makes the lending process efficient as the digital image of the entire document is created, which further allows the individuals to identify a particular field quickly.
The technology also comes with object detection and data extraction techniques used for extracting the relevant fields. Additionally, it crops the extracted image and reduces the data to small parts of the text. Not only does it make the document validation process simpler, but it also elevates employee productivity and output.
The availability of computing devices/smartphones and the internet has encouraged the lenders to take advantage of the available options and benefit the potential customers/applicants with improved services.
With OCR, you’ll also get the added benefit of artificial intelligence, which empowers both applicants and lenders for virtual dealing. Moreover, it helps in the disbursement of credit efficiently and quickly. Plus, it reduces the risk level involved in the process.
Tech-enabled work techniques also remove the limitations and risks associated with the credit assessment. Virtual application assessments lead to speedier processing and better handling of the process.
The advanced technology enables lenders to find potential applicants with the help of the applicant’s social media behavior and internet search patterns. Consequently, it helps in expanding the sales pipelines and reaching a large number of the target audience. Also, the tech-enabled financing options benefit the borrowers with increased choices relevant to their loan application.
Automates processes to improve the overall working of the Company
OCR helps in unlocking the potential of unorganized data. It captures the data and automates the extraction process, which leads to improved efficiencies of the banks. Automation harnesses the unstructured data so that financial institutions can use it to their benefit. Read on to understand the additional benefits of this technology for the banking and insurance sector.
OCR technology archives insurance or loan-related paperwork. It captures the content of the onboarding material in a searchable and accessible digital format. It can be used by the financial institutions to classify and store the documents effectively without compromising with the compliance requirements.
OCR can be considered as a remarkable tool for improving banking processes. Plus, it is also ideal for formulating digital-based strategies for improvement of the lending process. Today, several applications come with this technology. Its use can help the loan and insurance service providers to eliminate the possibility of cheating.
Let’s say, for example, – the financial institutions use the signature comparison application for signing the documents. It may help in identifying instances of fraud or forgery. Also, machine learning and artificial intelligence algorithms are ideal for in-branch applications used in processing loans, credit card approval, and more.
Furthermore, it also helps in finding the problematic areas of work which can be improved for better. The technology also helps the banks and insurance companies to assess the loan applications efficiently and quickly. Machine learning models can efficiently spot the loan applicants that are likely to default. But to reap the benefits of this model, it is essential to digitize the paperwork using OCR software.
Enables Proper Data Management
When filing loan applications, prospective borrowers or loan seekers usually submit a considerable number of documents. Earlier lenders had to go through these documents and verify the information manually. Resultantly, they would either miss or misinterpret several crucial data points and info.
Advanced tech-driven solutions such as OCR, Data management, AI, Big Data analytics, and Machine Learning enable lenders to analyze, gather, and synthesize data quickly. As a result, they can derive crucial insights needed to verify the applicant’s creditworthiness and map the risk level associated with it.
Speeds-Up the Overall Working of the Financial Institutions
Machine learning, Optical Character Recognition, and artificial learning algorithms altogether make the loan fulfillment process fast and highly efficient. Earlier it took months for the experts to verify the data and information, but now the timeline has reduced to days. All thanks to this advanced technology.
The best part is that OCR also offers the benefit of cloud working, which allows the individuals to process a massive number of transactions simultaneously. It has enhanced the experience for borrowers as well as for lenders while saving their time. The entire process has now become comparable, hassle-free, and convenient.
With new players entering the market, the financial institutions have to deal with new challenges every often. The new entrants ensure the use of the latest technologies like OCR, Machine Learning, Artificial Intelligence, BlockChain, and others for integrating the virtual and physical world to sell their products and services to a large number of audiences.
The technological advancements allow the lenders to meet their targets much more efficiently without putting in much effort. It has further benefited them with enhanced employee productivity and greater success.