The Ultimate Guide to Optical Character Recognition and Its Uses 2022

Digitizing physical documents manually is a time-consuming task. Especially if you have to extract data from files, receipts, and other printed documents on a daily basis, doing these tasks by hand can be quite exhausting.

Plus, there is always a margin for error when you are typing each word in a digital document by hand.

If you want to make things easier for yourself, then Optical Character Recognition Technologies can help you a lot with that. 

In this article, we are going to walk you through the basics of OCR and its applications in different industries. 

What is Optical Character Recognition Technology?

Optical Character Recognition or OCR short, is the latest technology that helps identify characters written on printed documents and convert them into editable digital files. 

OCR technology helps make text easy to understand for machines that only understand digital data. The advanced text extraction features of OCR make it incredibly valuable for many government institutions and private industries.

How Does OCR Work?

OCR works in several steps to accurately extract the data out of a document.  Although the process happens in steps, it is still quite fast and efficient. Below are the steps involved in the process:

Step 1: Image Pre-Processing

In this step, the OCR technology enhances the quality of the image for better text extraction. In the pre-processing phase, OCR uses techniques such as De-skewing, Binarization, zoning, and normalization to enhance the quality of the image.

Step 2: Segmentation

In the segmentation process, the technology recognizes one line of text at a time. The technology identifies the text lines and the words that are included in those lines. 

Step 3: Character Recognition

The OCR technology breaks down a document into parts, sections, and zones for character recognition. Once the process is done, the OCR recognizes the characters in the document. 

Step 4: Post-Processing

This is the final step of the process in which the OCR technology improves the quality of the output. The technology detects the data and enhances its accuracy. 

Applications of OCR Technology


OCR is quite valuable for banks as it can help extract information from printed checks. Information such as handwritten dollar amounts and the signature of the account holder can be detected with this technology.

Online OCR can also help easily digitize the information provided in mortgage applications and pay slips. Doing these tasks manually is going to require a lot of time and resources. This is where OCR online comes to the rescue.


OCR technology such as image to text conversion can help healthcare providers easily scan and digitize all sorts of health documents such as printed reports, diagnostics, hospital records, and more. 

The process of digitizing these hospital documents is made simple with the help of OCR technology. Healthcare providers can benefit a lot from the OCR technology and the applications that it has to offer for the healthcare sector.


Legal institutions have to deal with a lot of printed paperwork including judgments, affidavits, filings, statements, wills, and more. In the past, these organizations relied on physical record-keeping which was not so efficient. 

Using OCR, all of the legal documents can be easily digitized, in a short amount of time. This helps streamline the access to legal documents because digital data is much easier to store and access. 


OCR technologies can help streamline stuff such as insurance claims digitization. Even when a person applies for insurance on a physical document, OCR technologies can help convert the printed text to the editable digital format. 

This is important because insurance documents contain sensitive data that needs to be kept safe and out of reach from unauthorized access. Digital documents stored in a secure environment are much harder to access than physical documents.


The tourism sector can benefit from the applications of OCR technology. For example, people can use an OCR device installed in a hotel to do auto check-in. This makes the process of traveling across the country much easier for people. 

Moreover, the hotel website or mobile app can embed OCR features which the customers can use to do a check-in, in without any kind of hassle. Along with that, hotels and restaurants can use OCR to digitize their older records to keep track of their progress over the years.


The problem with retail store vouchers is, that they get lost a lot. But OCR helps you tackle this issue by scanning the serial code with an OCR device. After that, you can use the serial code to redeem your vouchers, without any issues. 

Along with that, OCR helps make it easy for retail stores to keep track of their sales by scanning receipts and managing billings in a seamless way.  

Benefits of OCR Technology

Digitize Documents Instantly

Instead of spending hours manually digitizing documents, you can use OCR to instantly scan and convert the printed documents into editable digital format. You can convert the information to PDF, JSON, XLM, or any other format that you prefer. 

Faster Implementation

OCR technology is much easier to implement as compared with other latest technologies. For example, there are predesigned software solutions available out there that you can purchase and implement for your industry, without spending a lot of time and money. 

High Accuracy

Manual data extraction can be faulty and contain errors. Since OCR is a machine technology, there is very little potential for errors in the output. The accuracy of OCR technology has been great and it’s improving at a fast pace.

Fewer Mistakes

Manual entry mistakes get reduced a lot with OCR technologies. When it comes to doing repetitive data entry tasks, the process can be quite tedious. This can lead to mistakes during the data entry process. OCR helps you avoid these mistakes.

Final Words

OCR technology is the future of data digitization. Almost all the industries looking to digitize their documents are using OCR technologies. Since these technologies are easy to access and use, businesses are going towards them to streamline their repetitive data entry processes.

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