The era of OCR (optical character recognition) technology has by now changed a lot of businesses, and the BFSI industry is one of them. OCR in banking includes enabling faster scanning, automating bank statement processing, and more of such repetitive tasks. This brings increased efficiency, precision, and customer satisfaction.
So, with this blog, we will talk all about OCR technology and how it is changing the banking industry for the good. Let’s begin!
Decoding OCR Technology
Optical Character Recognition (OCR) is the tech that takes any image of text, handwritten or printed, and transforms it into machine-readable data, the most common output being editable PDF documents. It scans a document, reads characters out of it, and converts them into digital form, editing, searching, and analyzing by computers. Data extraction can be accelerated with the use of OCR, and transactions become smoother and more accurate.
Benefits of OCR in Banking
- Faster Document Processing – OCR is great for processing documents, such as cheques, account statements, loan applications, and other forms of IDs. Faster document handling improves the customer experience and increases operational efficiencies.
- Improved Accuracy – The extracted information with OCR is high in accuracy, so the data obtained is reliable for banking operations. This reduces error, offers good compliance, and enables faster decision-making.
- Enhanced Customer Experience – Banking customers expect quick service. First and foremost, OCR reduces KYC verification timeline and loan approval processes. This means customers will be more satisfied with lower waiting time, creating better retention and trust around the banking services.
- Cost Reduction – Auto data entry can be automated through OCR, and have a significant effect on minimizing labor costs. This also saves money, reduces costs due to error correction, reprocessing documents, and the existence of physical records.
- Strengthened Compliance – An organization must be regulatory compliant, which includes accurate documentation and record keeping. Banks store and fetch data using OCR as it can satisfy compliance with banking regulations, relieving the legal and penalties issues.
- Better Fraud Detection – Withdrawal payment application documents are a major threat from fraudsters. Signature verification, tampered document identification, and live information cross-check are all confirmed by OCR. This reduced the bank’s risk of fraud, financial loss, and security breaches.
- Integration with Digital Banking – Digital transformation has become obligatory for banks to improve services. OCR works perfectly with banking software, mobile apps, and AI. This allows real-time data access to improve decision-making and customer interactions.
- Efficient Data Retrieval – It is a way of converting paper documents into searchable digital records. Bank employees can print out the required information almost instantly without having to go through piles of paperwork. It is faster to retrieve data, improve productivity, and make workflows more efficient.
- Sustainable Banking Practices – Banking on paper is the complete opposite of sustainable practices, especially considering the large stack of paper documents banks have. Digitizing documents helps us to have paperless transactions with OCR. It cuts paper waste, reduces carbon footprint, and aligns with the bank’s sustainability goals.
- Competitive Advantage – The banks that implement OCR ahead of their competitors. They are more efficient, faster processes, improved security, and lower cost. Long-term growth and profitability demand that the customer experience be enhanced, which is done by OCR.
Enhancing Security with OCR
Documents that have been tampered with and have been forged with signatures or IDs can be detected with OCR in banking. It is very capable in preventing identity theft and fraudulent transactions. In addition, OCR can be integrated with sophisticated security measures, like multi-factor authentication, to guarantee that the private details are shielded from meddling.
Diverse Use Cases of OCR
OCR technology improves the ROI for banks by automating the document processing tasks. Printed and handwritten text can be read, reducing manual effort and error. OCR is used by banks to achieve automation in processes, boost security, and offer an excellent customer experience.
- Automating Cheque Processing
OCR scans cheques and extracts data from documents without having to manually enter the details. It verifies account numbers, signatures, and amount in seconds, not wasting processing time and minimizing the number of errors. Checks can be cleared quickly, giving customers satisfaction and making operations efficient.
- Simplify KYC & Customer Onboarding
OCR can extract data from identity documents, such as passports and driver’s licenses. Onboarding is instantaneous. However, manual verification of the records takes time, and OCR speeds up the process. The benefit is that it increases security, prevents identity fraud, and complies with regulatory requirements.
- Enhancing Loan & Mortgage Processing
Loan applications require multiple documents, such as income proof and tax records. OCR helps reduce paperwork, approvals, and time from data extraction. Moreover, it eases organizing and verifying records related to financial matters. This helps banks process loans faster, enhancing the customers’ experience.
- Streamlining Invoice & Receipt Management
OCR is instrumental reading invoices and receipts so that the financial records in a business no longer require manual data entry, eliminating risks of errors. Banks use this to document expenses and payments of reimbursements as well as vendors. Financial accuracy is ensured with automation that speeds up transaction processing.
- Detecting Fraud & Enhancing Security
OCR allows banks to spot forged documents by analysing the handwriting and print styles. It verifies signatures, scans and otherwise looks for inconsistencies in scanned documents. This makes the security process stronger to secure the banks and its customers from financial crimes.
- Facilitating Account Statement Digitization
OCR converts physical account statements to digital records. It facilitates data retrieval and the service to customers. Scanning through paper documents is no longer needed to access transaction history. Digitization also allows banks to save storage costs and secure data.
How MBM Newtech Can Help
Advanced OCR is used to streamline KYC checks with OCR, automate bank statement processing, and improve loan application approvals. This solution reduces manual errors, improves accuracy, and complies. Moreover, OCR can be used for strength in security by eliminating fraud and enabling uninterrupted, secure banking transactions.
Part of the MBM Newtech range of products are custom data management solutions for banking, working together with industry expertise and the latest technology. Here’s what sets us apart:
- Continuous Integration – We guarantee a seamless integration of OCR systems with your existing banking infrastructure to power accurate and continuous data management. KYC checks with OCR are just one of the most useful outputs.
- Powered by AI and ML – While AI and machine learning are not magic tools, OCR technology uses them to provide best-in-class results that adapt to almost any document type.
- Scalable – All solutions are scalable, whether you are a small bank or a large financial institution.
Banks should use MBM Newtech’s document management and processing solutions to turn physical data strategic assets that drive innovation and competitive advantage. Work with us to make the most of OCR in banking – contact MBM Newtech now!
