Currently, most enterprises have a workflow rampant with manual document-heavy processing.
However, businesses are quickly digitizing their document-processing workflows. 50% of B2B invoices across the globe will be processed without manual intervention according to a Gartner study. The reason? Manual document processing is more expensive than the cost of the documents themselves.
For example, the average cost of processing a single invoice was $10.89 in 2021. Manual document processing is also prone to human errors like fat finger errors. In a world where 90% of the data is unstructured, you need a tool that can automatically convert unstructured data into structured data to supercharge your productivity.
This guide explains how you can use intelligent document processing to save your business plenty of money, time, and resources.
What is Intelligent Document Processing?
Intelligent Document Processing (IDP) is a technology that automatically extracts unstructured data from multiple document sources, including images, online forms, and PDFs. IDP is also known as Cognitive Document Processing (CDP).
IDP converts this unstructured data into structured data using multiple technologies, including natural language processing (NLP), machine learning (ML), optical character recognition (OCR), and intelligent character recognition (ICR). Together, these technologies make IDP intelligent.
OCR is often used interchangeably with IDP. However, that’s not true. IDP uses OCR as one of the technologies to extract data.
How Does Intelligent Document Processing Work?
Here’s how a document is processed using IDP:
- Conversion: An IDP platform starts by capturing your document through a scanning device. Once it converts a physical document into a digital one, it starts ingesting data.
- Document image processing: The document’s image is processed for optimal OCR and archival.
- Reading text using OCR: OCR helps the machine accurately read the scanned document’s text.
- Identify language elements with NLP: IDP platforms use NLP to find language elements using methods like feature-based tagging and sentiment analysis.
- Machine learning algorithm classifies information: A combination of machine learning and other techniques is used to classify the information in the document.
- Extracting elements using AI: IDP uses AI to extract information elements like contact numbers, addresses, and names.
- Validation: IDP platforms validate information using third-party databases and lexicons for data validation. Data points are flagged when the platform can’t validate them so someone from the team can review them manually.
Top Intelligent Data Processing Use Cases in Banking
Reading and writing financial documents make up a large portion of a bank’s workflow. As a bank, you need to process data fast to offer best-in-class services to your customers without making errors.
IDP helps banks guarantee accuracy and efficiency to their clients. In addition to data extraction’s key role in a bank’s workflow, banks can also use IDP platforms for fraud detection.
Here are some of the most common use cases of IDP for banks.
Customer satisfaction with mortgage originators reduced by five points on a 1,000-point scale in 2021 according to a study by J.D. Power driven by record mortgage origination volume. Banks need to automate their mortgage workflow to scale as the demand grows. After all, customer satisfaction is one of the most significant differentiators in the mortgage industry.
The mortgage workflow involves collecting various documents. Extracting data from these documents is one of the major factors slowing down the workflow. This is where an IDP tool can help streamline your mortgage workflow.
An IDP tool helps you speed up the underwriting process with automation. It automatically reads and extracts relevant data and relays it to your bank’s credit evaluation system.
The P&C Customer Satisfaction Survey reveals that the claim filing process is the biggest driver of customer satisfaction.
However, the claims processing workflow can be complex. Claims data comes in various formats—customers might send data as word files, PDFs, and images. Plus, you might receive the data via multiple channels—you might receive it via email, chat, or over a call.
Unifying this data without manual effort is a massive challenge. Traditionally, banks used OCR to process physical documents. However, the lack of accuracy required manual review.
An IDP tool is a great alternative to OCR for claims processing. Thanks to technologies like NLP, computer vision, and deep learning, it provides greater accuracy than traditional OCR.
Customer onboarding is one of the most resource-intensive processes for a bank. Banks spend an average of $280 to onboard a single client according to Backbase—the cost can add up when you’re onboarding hundreds or thousands of customers every month.
Many of these expenses go towards processing documents, including the bank’s forms, credit reports, or tax returns. Sure, you can try automating this workflow. However, the automation will break down as soon as a new document type is introduced or you change your form’s template.
An IDP tool can help tame your customer onboarding costs. Your customers will appreciate a fast onboarding experience, and you’ll save money, increase productivity, and make an excellent first impression.
Financial Document Analysis
Banks handle thousands of financial documents every day. From financial statements to tax returns, carefully studying financial documents is critical to a bank’s operations.
Financial analysis is a cognitively heavy task. Why make your team spend time on mundane tasks like manipulating data when you can use an IDP tool to automate this process and enable your team to concentrate on their more complex deliverables.
Using an IDP tool helps analysts automatically structure and populate relevant financial data into their system. You’ll do your analyst team a favor by eliminating a lot of their manual work, allowing them to focus on analysis.
KYC Process Automation
KYC (Know Your Customer), Re-KYC, and C-KYC are critical for compliance. Banks might need to refer to a customer’s KYC details at various stages during a customer’s journey.
However, handling hand-written KYC forms is a hassle. Migrating a customer’s KYC data comes with challenges like human error and work overload. Committing errors when underwriting a mortgage or onboarding a customer costs money, but failing to comply with KYC requirements may increase the legal, compliance and regulatory risks.
Using IDP ensures accuracy, so you never have to lose your reputation and pay a fine for failing to comply with KYC norms. The McKinsey KYC Benchmark Survey found that by increasing end-to-end KYC-process automation by 20%, an organization could enjoy the following positive outcomes:
- Increased quality assurance by 13%
- Improved customer experience (by reducing customer outreach frequency) by 18%
- Increased the number of cases processed per month by 48%
The Bottom Line
Banks process a colossal amountnumber of documents and data each day. Getting new customer data into the system, processing claims, and analyzing financial statements are heavily data-driven tasks that involve dozens of documents from hundreds of customers.
The probability of committing errors is high. Banks also need a large team just to process documents and structure the data in those documents.
Banks need an IDP tool to automate this process and remove the risk of error from the process. It also integrates with applications to make migrating the data easier. An IDP tool also validates data and alerts team members in exception cases, when it requires a human to review accuracy.
It is important to select an IDP tool that offers the right solutions for your industry. Better yet, find a partner who can create a custom IDP solution tailor-made for you.
Why Choose Blanc Labs Intelligent Document Processing?
Blanc Labs partners with financial organizations like banks, credit unions, and fintechs to automate operations.
We can help you create robust automation solutions that minimize manual effort, reduce errors, and improve productivity. Our team helps you use the most advanced technologies including AI and ML to automate complex, resource-heavy processes like document processing.
Book a discovery call with us if your financial organization deals with plenty of documents daily. We’ll come up with a tailor-made solution to minimize the friction in your document processing workflow.