What is OCR? How does it work, and what are its use cases? — Tech Zimo

What is OCR? How does it work, and what are its use cases? — Tech Zimo

You might be familiar with OCR technology if you have been in the race of making automated document processing workflows. Moreover, with increasing digital advancement

Enterprises across the world are transitioning from paper-based documents to digital data processing. But, what is OCR? How does it work? And in which business process can it be utilized to leverage its benefits? Let’s dig into this article into what benefits OCR brings to the table.

An OCR system is a combination of hardware and software. The main goal of this technology is to scan the textual data and images from the physical document and translate the character within document and then utilize it for processing data or information. Organizations can use OCR to Fastrack data access and processing, from gathering to analyzing data.

For instance, let’s say the scanner identified the invoice total as $800, but in reality, it has to be $8000. A human might make mistake if they have to handle high volume invoices. But OCR with AI can identify the mistake automatically correct it in real-time without manual intervention.

OCR system works in three processes-

Image Pre-Processing

This step involves the processing of documents into images for analyzing data and light areas and categorizing them into separate elements.

Intelligent Character Recognition

The second step involves the identification of characters and converting them into ASCII code for further manipulations.


The final step includes the error correction by using Artificial intelligence. Also, artificial intelligence can be trained on the specific lexicon of words that will be found in the document.

However, using NLP, machine learning algorithm, and computer vision method offers an advanced version of OCR that is not limited to character recognition only. Using this combination of technology correct errors using probabilistic approaches and recognize patterns in training samples.

Legal Documentation

Regardless of industries, sensitive data is everywhere. Whether it’s a financial institution or IT organization, service desk agents have to go through legal documents for claims processing and others. Considering the time involved in extracting data for processing further operations, OCR is the savior. OCR limits the paperwork and extracts data from multiple systems with an easy view and sharing options. Also, OCR helps enterprises gain to create an in-house search engine to search information directly from the database.


Banking service desk agents often struggle with the humongous task of accessing data for loan processing, KYC, credit-debit card approval, money transfer, and others. Without OCR, manually verifying high volume data take a toll on employee productivity. Using OCR can benefit banking organizations by automatically reviewing the information and matching the details. In addition, combining AI with OCR reduces error, increases analyzing capability, enhances employee productivity altogether.


From processing invoices to inventory management, the retail service team is encumbered with the task of extracting data from multiple resources in multiple formats. Considering the manual intervention involved in extracting and analyzing data makes a perfect case for OCR. OCR technology can efficiently go through the keywords presented on the document, analyze them, and verify them without manual intervention. Also, retailers use serial numbers encoded with barcodes for their product descriptions. By using OCR, retailers can fast scan the barcode to get the serial number to track stock.

Health Records

Having one’s entire medical history direct on the table is all a patient wants from the organization. Rather than maintaining past medical records, X-rays, and other reports, having a digital record system could be a great help. Using OCR, healthcare organizations can digitally store past medical reports, data, and prescriptions altogether in a unified place. Along with enhancing data accessibility, OCR also helps maintain healthcare legislation and compliance policy.

The benefits of OCR go beyond digitizing documents and scanning the information. Combined with Artificial Intelligence (AI) and other cognitive capabilities, OCR can get the best deal for your business, manage and audit the mismatch at a much faster pace than humans. Also, who doesn’t want easy and efficient data processing and access? So what are you waiting for? OCR is an opportunity to lead in the digital transformation era; embracing is all you need.

Author Bio Vatsal Ghiya is a serial entrepreneur with more than 20 years of experience in healthcare AI software and services. He is the CEO and co-founder of
https://www.linkedin.com/in/vatsal-ghiya-4191855/ , which enables the on-demand scaling of our platform, processes, and people for companies with the most demanding machine learning and artificial intelligence initiatives.

Originally published at https://www.techzimo.com on April 27, 2022.

What is OCR? How does it work, and what are its use cases? — Tech Zimo was originally published in Chatbots Life on Medium, where people are continuing the conversation by highlighting and responding to this story.