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Beyond Scanning: How AI is Revolutionizing Forms Processing

When your firm sets out to accomplish its growth goals, operational professionals must find opportunities to increase productivity, scale efficiently, protect the firm’s bottom line, and ultimately, maximize ROI. This, of course, presents quite a challenge — one which requires most COOs and their team to leverage today’s top-of-the-line software to accomplish.


One of the most prevalent operational inefficiencies in financial firms is the process of manually extracting data from client and vendor forms, including signatures and hard-to-read handwriting. Not only can this create a “guessing game” that leads to system-wide inaccuracies, but it often takes away time from valuable staff members.


The question is, how can your firm save money, improve operational efficiencies, and ensure forms are processed accurately? That’s where AI-driven optical character recognition (OCR) comes into play.  


Let’s take a look at what, exactly, OCR is and the role it plays in today’s modern, growth-focused advisory firms.


A Brief Introduction to Optical Character Recognition (OCR)


While the phrase “optical character recognition” sounds fancy and futuristic, its roots actually trace back to the early 1900s. Physicist Emanuel Goldberg received a patent in 1914 for a machine that could read characters on a page and convert them into telegraph code. As you can imagine, this initial iteration of optical character recognition technology was rudimentary and often inaccurate. It required constant manual oversight and intervention, but it was still a revolutionary step forward in business technology.


The next big leap in OCR technology was in the 1970s when inventor Ray Kurzweil developed and eventually commercialized a machine that could process printed text in almost any font.


Over the next few decades, OCR technology continued to catch on and in time, it got smarter and more accurate. Today, OCR can be used to convert virtually any font — including handwriting — into digitized documents. And with the addition of artificial intelligence, its capabilities continue to drive greater operational efficiencies in businesses everywhere, including within the financial services industry.


1914: Emmanuel Goldberg patents OCR technology

1970s: Ray Kurzweil develops omni-font OCR system

2000s: OCR goes mainstream

2020s: AI revolutionizes OCR capabilities


OCR in Financial Services


Traditionally, there have been two ways that firms decipher data on forms. Either a human manually reads through and rekeys the data or they rely on OCR software. If you’ve ever deposited a check by taking a picture of it with your phone, this is a common example of OCR software at play.


The problem is that most OCR software offerings cannot operate independently from human oversight. Case in point, the current industry benchmark for OCR technology is around 50% to 85% accuracy. While your firm may use OCR to free up some time, your employees or key leaders must still be actively involved in the process in order to complete the work. This, of course, costs time and money — not to mention, most financial professionals would much rather spend their time on other more client-focused tasks.


In addition, OCR software is difficult to establish and maintain, often lacking critical ongoing support from the provider (despite the high upfront cost of implementing it in your firm).


How AI & OCR Come Together


Artificial intelligence helps OCR software to go leaps and bounds beyond its original functions. Today, AI-enabled OCR software can decipher millions of form fields on handwritten, printed, digital, and even e-signed documents — all with virtually perfect accuracy.


To take it a step further, today’s AI-powered OCR software can automatically extract contextual insights alongside the original data, which gives operational professionals critical information about the relevancy of the data to the form itself. 


What Is OCR-as-a-Service?


On its own, OCR is a powerful tool that helps your firm save valuable time and improve accuracy, since it eliminates the need for manual data entry. But, as we pointed out earlier, traditional OCR solutions still require an involved initial set-up process as well as ongoing maintenance and oversight.


It would be your operations managers' or compliance professionals' responsibility, for example, to manage field mapping changes as your forms evolved. With such upkeep requirements, traditional OCR services could still require your team member’s attention — making it not such an ideal option for firms looking to streamline operations entirely.


What makes OCR-as-a-service different is that it eliminates the burden of your firm leaders building, configuring, maintaining, and operating all components of OCR and data extraction yourselves. Rather, a third-party partner would take care of the ongoing maintenance and upkeep on your behalf.


By incorporating our copyrighted naming convention into the form, we can provide data enriched with up to 26 points of contextual information.


For instance, while standard OCR can identify a first name and its value as "Fred," additional manual processing is typically needed to determine Fred's role on the form. With our service, the data you receive will include not only his first name but also his role, the form it originated from, and much more. This contextual richness ensures that your data is both actionable and accurate. Furthermore, we manage updates to the form, ensuring seamless processing.


In essence, our well-defined naming convention elevates OCR (or OCR + AI) by adding crucial context, enhancing the value and accuracy of the data.

Benefits of OCR as a Service


  • Reduced Costs: Eliminate the need to build, maintain, and operate your OCR infrastructure, saving on development, hardware, and software expenses.

  • Increased Accuracy: Achieve industry-leading accuracy rates (up to 99.9%) with a solution that combines OCR and AI. (Traditional OCR systems average 50%-85%).

  • Reduced Errors: Eliminate human error associated with manual data entry.

  • Improved Efficiency: Automate data extraction from forms, freeing up employees for higher-value tasks.

  • Faster Processing: Process forms at significantly higher speeds compared to manual extraction.

  • Scalability: Easily handle large volumes of documents without backlogs, allowing you to scale your operations efficiently.

  • Richer Data Context: Extract not just data, but also metadata, enabling smarter processing decisions.

  • Reduced Labor Costs: Reduce manual data entry efforts by 90-99%.

  • Flexibility: Process a wider range of forms with minimal setup or maintenance thanks to extensive field recognition capabilities.

  • Human Verification: Ensure data quality with a built-in system that flags data below a certain confidence level for human review.

  • Faster Onboarding: Onboard new clients quicker by processing forms at high speed.

  • Eliminate Repetitive Tasks: Free employees from tedious, repetitive tasks associated with manual data extraction.

The Automated Answer to Your Form Processing Challenges


As an operations professional, you may feel pressured from all sides to find new efficiencies, lower costs, and close new business faster.


When combined with AI technology and a service component, OCR software can help you streamline, simplify, and standardize the process of extracting data. 


FormXtract is an AI-enhanced data extraction service built to help your business operate more efficiently, and process business forms better and faster with rich insights and contextual information. As an OCR-as-a-service solution, FormXtract eliminates the need for your team members to conduct repetitive, time-consuming data handling. We’ve found that FormXtract can reduce labor and human involvement in the data extraction process by 90-99%.


Want to see how AI-driven OCR-as-a-service can help your firm scale more effectively?  Schedule a demo today


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