The present age can be referred to as a zenith of technological development. The fast-paced proliferation of digital technologies and the rise of artificial intelligence has revolutionized everything. Every sector is widely adapting to the evolving digital environment. The fintech industry also continues to upgrade software solutions, and artificial intelligence is gaining much more significance in this sector. Financial institutions have widely transitioned to using such revolutionary software solutions to boost their overall performance and enhance customer experience. The use of character recognition technologies, such as OCR/ICR, for document verification during the KYC process is a notable example of this.
Online Character Recognition
Cyber crimes such as fraud and identity theft are soaring with the rise in advanced technologies. Potential criminals use various methods, like phishing, hacking, document theft, etc., to trap people. Moreover, they may use stolen data and information to commit highly punishable crimes, such as money laundering and terrorist funding. Manual document authentication is deemed outdated because of its conventional approach, and this is where character recognition software comes to the rescue. Therefore, the document verification process during customer onboarding must be digitized to safeguard business interests.
The primary benefit of OCR is that it can recognize letters and numbers and convert them into computerized data sets. As discussed, it is used widely in both non-financial and financial sectors to improve efficiency and boost security. Its use is rising rapidly, so much so that the OCR/ICR market is anticipated to grow to 40 billion US dollars by 2030. If your financial organization still needs to integrate character recognition software into your customer onboarding mechanism, it must do so immediately. Furthermore, ICR/OCR is vital to ensure your customers’ security and compliance with regulatory standards.
ICR and OCR – A Ground-Breaking Innovation in Fintech
The need to combat spiraling cybercrimes in financial institutions has led to the establishment of several SaaS companies. Such software-as-a-service firms offer solutions to financial institutions, specifically banks and cryptocurrency exchanges. ICR and OCR are among such solutions that aim to streamline business operations. OCR refers to optical character recognition, which recognizes text in images and physical documents. It converts any photo that contains written, typed, or printed text into machine-readable data. ICR technology uses machine learning to detect characters in a document and convert them into digitally editable content.
OCR is a relatively older technology, becoming popular in the early 1990s to digitize historical newspapers. However, it underwent technological advancements with time, and in the present digital age, OCR solutions work with utmost precision and efficiency. Automated OCR is widely used in document verification and attestation in multiple sectors, including airports, private enterprises, banks, digital asset companies, etc. Hence, ICR/OCR is a revolutionary fintech software solution that assures seamless customer onboarding and protects the customer database. It is crucial for financial organizations to ensure anti-money laundering and counter-terrorism funding compliance.
OCR/ICR Software & ICR’s Distinctiveness
ICR, or intelligent character recognition, is a more advanced and modernized form of optical character recognition. Although both software solutions are always mentioned side-by-side, ICR differs from OCR because of a few specifications. Optical character recognition works on a fixed amount of documents and requires human aid to operate. Contrarily, ICR can identify handwritten texts and many document formats. It does not require human assistance to function and is highly automated. One of its unique features is that it processes the data instantaneously within seconds, with near-to-perfect accuracy. Another distinctive facet of ICR is the deep learning capability that enables it to scan handwritten documents with any layout. Therefore, ICR is a powerful character recognition solution that streamlines a company’s customer onboarding process.
ICR and OCR Software: An Effective Tool to Deter Fraud & Prevent Financial Crimes
Data and identity theft have become the most committed offenses in cyberspace due to the rapid proliferation of cyber technologies and uncontrolled AI-powered tools. Databases of organizations, especially financial institutions like banks, are highly susceptible to security breaches. Cyber and financial criminals use the data in various ways to achieve their illicit ambitions. For instance, selling, leaking, or exposing people’s personal information on the dark web is one of the immensely detrimental outcomes of weak cybersecurity in an organization.
The situation worsens if it is a financial organization because that data can easily be used to commit financial crimes such as terrorist financing. According to an estimate, the security of about 15 million customer data records was violated globally in 2022. These astounding figures showcase the potential threat of fraud and identity theft in a financial organization’s lenient security apparatus. Therefore, ICR/OCR technologies are vital to secure customer onboarding and AML/KYC compliance.
In a Nutshell
To conclude, it is comprehensively illustrated that the ICR/OCR software in the document verification procedures proves to be an efficient tool for organizations. However, it is immensely significant for financial institutions such as banks and digital asset companies because these sectors are much vulnerable to financial fraud, money laundering, etc. The customers’ documents must be vigilantly checked using AI-backed ICR/OCR software solutions to protect customers from fraud. More significantly, your financial organization must adopt them to save itself from unknowingly becoming a medium of unlawful monetary transactions.