What is artificial intelligence (AI) OCR?

Portrait of Neha Gunnoo
by Neha Gunnoo
5 mins read
Last updated on

Remember the good old days of OCR? Well, it's had a bit of a glow-up thanks to its trendy BFF, Artificial Intelligence (AI). In this blog post, we will explore what AI OCR is, how it works, its applications, and advantages. By the end of this post, you will have a better understanding of this technology and how it is changing the way we process information.

What is OCR?

The global optical character recognition market is expected to reach USD 32.90 billion by 2030, growing at a CAGR of 14.8% from 2023 to 2030. - Press release, Grand View Research.

OCR software helps recognize and convert images of printed or handwritten text into editable and searchable digital text. It is an essential tool in the processes of automation, document processing, and digitization.

OCR tools are usually integrated with machine learning and pattern recognition algorithms.

Read more about what is OCR.

Limitations of traditional OCR

It's an undeniable fact that OCR solutions have revolutionized data extraction and streamlined business processes. However, conventional OCR engines have limitations.

  • OCR's computer vision technique converts data into plain text only, which means that the data remains unstructured and you can't export it to another application.
  • Traditional OCR cannot process documents in different formats and layouts.
  • It may struggle to recognize text in low-quality images, distorted or skewed text, or handwriting that is difficult to read.
  • The complexity of the document may affect the way OCR works; for example, it may not be able to read table data accurately.

Read about the differences between structured and unstructured data.

What are AI-powered OCR systems?

The integration of artificial intelligence with OCR has enabled organizations to leverage advanced capabilities such as deep learning, for faster data processing.

Compared to traditional OCR, which relies on preset rules to identify text, AI OCR analyzes data and learns from it. This allows it to recognize and interpret different fonts, languages, and writing styles with greater accuracy and even recognize handwritten text.

Learn how data extraction with AI works.

Benefits of AI-Enabled OCR Software

With the advent of AI OCR, businesses can scale up more quickly by automating data capture in more efficient ways.

Improved accuracy

It can recognize and interpret text with greater accuracy than traditional OCR systems because AI algorithms can learn from their own experiences and improve, making them more effective at recognizing different fonts, languages, and writing styles.

Better data quality

Since AI is a stronger technology, you can expect to have enhanced data quality with fewer errors and inconsistencies.

Greater flexibility

AI OCR solutions can easily extract data from a variety of sources, including scanned documents, PDFs, and images. This makes it a flexible tool that can be used in various industries and applications.

Convert unstructured text to structured text

AI tools process unstructured and semi-structured data into structured data. This data is then ready to be exported in other formats, such as JSON and CSV, or sent to other tools for further automation.

Difference between unstructured, semi-structured and structured data

Does AI OCR have limitations?

Just like any other technology, AI OCR has some challenges. It is often referred to as a "black box," which means that if the AI model fails, you have to retrain the entire model from scratch. AI OCR relies extensively on training to be able to function as required.

To overcome those limitations, you can use either Zonal OCR or Dynamic OCR

Applications of AI-assisted OCR

AI optical character recognition tools play a significant role in the digital transformation of any industry, including real estate, finance, or healthcare.


AI OCR is changing big data in the finance industry by processing large volumes of financial documents such as invoices, receipts, and contracts or by extracting metadata for payments. This helps to reduce errors and save time, making it easier to manage finances and comply with regulations.


The Edtech industry hasn't been spared from the evolution of artificial intelligence. Paper-based records, such as student transcripts and certificates, and textbooks can be easily converted into digital formats.

Parseur: The best AI OCR

Parseur is an advanced AI OCR for PDF data extraction. What differentiates Parseur from other AI-assisted tools is that it has a point-and-click platform and a simple automated process. Anyone can use Parseur!

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Try out our powerful document processing tool for free.

Summary: Traditional OCR Vs AI OCR

We can safely say that AI OCR is a disruptive technology compared to OCR-only.

Traditional OCR Zonal/Dynamic OCR AI OCR
Creates structured data No, only raw text Yes Yes
Adapts to unknown layout Yes No Yes
Requires training No Yes, light Yes, extensive
Processing speed Fastest Fast Slow, resource extensive

AI OCR services are opening new possibilities for businesses to digitize information through scanning, extraction, and verification. Looking to the future, we can expect AI OCR to continue to evolve and improve, with advances in AI technology enabling even greater accuracy and efficiency. With the rise of digital transformation, AI OCR is becoming an increasingly important technology for businesses and organizations, helping them to stay competitive in a rapidly changing landscape.

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