Why OCR is not compatible with real digital transformation

Optical Character Recognition (OCR) has been around for decades, and is still a technology that banks regularly use to scan and process paper or PDF forms, such as loan applications or account service requests. Although OCR is a well-established data capture tool, it has a number of inherent issues that make it less than ideal when you consider true digital transformation.

We believe OCR keeps your business on board by thinking of forms inside the old “PDF form” – displaying the form as a static, fillable document. Asking a customer to manually fill out a blank form, or even to complete a fillable PDF online, which then needs to be scanned via OCR, isn’t exactly a digital or mobile-friendly experience. Not to mention, OCR systems are notorious for data errors that result in high NIGO scores (not in good shape), which leads to more work to fix downstream.

Here’s how you can think differently about data collection and forms in the context of initiating and automating banking processes.

How does optical character recognition work
Here’s how organizations typically use OCR solutions to manage form data:

  1. Customer, employee, or business partner downloads a PDF form or prints a paper form.
  2. They go through the form, gather information and fill in each field by hand.
  3. They send the form back to work, with the required documentation, as it enters the queue.
  4. An employee has to scan this form and OCR technology analyzes the information to convert it into usable data.
  5. This data is sent to back-office systems for customer management purposes – with humans needing to ensure the quality of that data either before or after.

How OCR Scanning Stops Digital Transformation
While this process seems simple and straightforward, it can go wrong in a number of ways.

The customer must find the right model
The modern customer journey means making things as quick, easy, and convenient as possible. Putting the onus on your client or financial advisor to find and download or print the correct form, in the correct language, feels like friction. Even if this form is a fillable PDF on your website, it’s not a truly customized experience.

Filling out forms is cumbersome and embarrassing
Nobody likes having to fill out forms, especially when they are long and require a lot of data. Bank model questions can sometimes seem complicated, especially for operations such as commercial lending. Unfortunately, for OCR scanning, this is a necessary evil. The scanner software and OCR software expect to see specific data in each field, and completing wrong or missing data may cause errors.

It takes a long time to receive and scan forms
In the digital age, consumers want to interact quickly and efficiently. Unfortunately, submitting a form again and then waiting for it to be scanned before processing can add several days to processing lead times. Meanwhile, your potential customer is tired of waiting and may choose a competitor.

OCR scanning can lead to data errors
No matter how well a form is filled out, or how good the OCR scanning hardware and software is, perfect scanning is not possible. This leads to inefficiency and duplication of effort in your business. Not to mention compliance errors. Getting back to the customer to make corrections or gather more information takes longer.

Data capture and digital transformation: Rethinking paradigms
Rather than relying on traditional models of collecting customer data in an operation, many banks are moving towards creating intelligent, targeted, pre-packaged digital interviews that are customized to the customer, state or jurisdiction, and business process — essentially enabling a two-way conversation designed for the digital world. What does this look like?

  • Ask clients “what do you want to do today” and direct them, rather than asking them to find and complete the correct form
  • Personalize the interview experience with information you already know in your system, and allow clients to confirm known data rather than re-enter it
  • Enabling customers to use more of their mobile capabilities, such as geolocation and cameras, to add photos
  • Eliminate the need for customers to discover confusing if/then phrases and simplify the journey with business rules governing relevant questions
  • Customers can enable the process to start on one machine and switch to another without starting over – and securely add supporting documents as needed
  • Automatically sync data to core banking and CRM systems, without the need for intermediate steps such as OCR
  • Automatically create personalized document correspondence, agreements or loan packages – linked with e-signature for quick closure and auto-archiving as needed
  • Consolidate workflows to update the right people and systems at the right time

This is a truly digital way of continuing to collect information from customers. Everything is easily provided online, you only ask the questions you really need, and because of the verification process, error rates drop to almost zero.

OCR is a one-trick game – all it can do is fetch data into your platform. But most banking operations require information to flow back and forth from the customer and back again in the form of agreements and correspondence. Speeding up this process can lead to savings in revenue and costs.

Don’t get caught up in the survey cycle – take the real leap into digital transformation, starting at the point of customer need. If you have dozens or hundreds of existing models, and need to take them to digital, Smart Communications can help. Read the white paper explaining why forms shouldn’t be four characters, then learn more about how our SmartIQ solution can help you turn your PDF forms into a truly interactive customer experience.

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