Optical Character Recognition (OCR) Market, By Type Software (Desktop-Based OCR, Mobile Based OCR, Cloud-Based OCR), Services (Consulting, Outsourcing, Implementation & Integration), Vertical (Retail, BFSI, Government, Education, Transport & Logistics, Healthcare, IT & Telecom, Manufacturing, Others), Regional Analysis (North America, Europe, Asia-Pacific, LAMEA): Global Opportunity Analysis and Industry Forecast, 2020–2027

Optical Character Recognition (OCR) Market Analysis:

Optical character recognition refers to the technology capable of recognizing and distinguishing between written as well as printed text characters from the scanned documents using a computer. Optical character recognition systems are developed using a mix of software solutions and hardware, which enables the conversion of physically scanned documents into machine-readable language. An OCR comprises of multiple elements like processing, optical scanning, feature extraction, location segmentation, and recognition post-processing. The optical character recognition system fist scans the text, then does a thorough analysis of it, and converts it into machine-readable codes. OCR systems have facilitated the smooth functioning of various industries by removing language barriers and making work efficient by saving time and cost. They have made data sharing, access, and storage extremely easy. Optical character recognition has brought a revolution in the document handling segment and is being adopted across the globe by
various industries, firms, and businesses. 

Growing digitalization, increasing automation, and rising investments in technology are the key factors driving the market growth

Organizations around the world are digitalizing there working routine by incorporating technologies and increasing automation of manual processes. Digitalization helps an organization massively by increasing the efficiency and accuracy of the daily activities. Similarly, optical character recognition has helped the organizations to save a lot of time, energy, funds, and other resources. OCR has majorly removed the chances of incorrect data by eliminating chances of manual errors, which are usually unintentional and caused by distractions, negligence, or excess stress. This helps the organization to save a lot of time, which earlier was consumed by employees feeding/typing data into the computers.

Further, it has facilitated the easy management of activities and decreased the transforming price of official papers into digital documents. This has helped organizations around the world to offer better customer service and ensured that all the data is safe. Also, digitalization has become necessary in modern times, owing to a vast quantity of data, and managing paper documents is excessively complex. All these factors
have contributed to the growth of the optical character recognition market.

Lack of accuracy and poor technological infrastructure are hampering the market growth

Optical character recognition has one major restraint in its growth, and that is a lack of recognition of human handwritten material. Different writing patterns and languages increase the complexity of the written document to be accurately scanned. OCR systems often end up feeding wrong data, which is somewhat similar in the design of original handwritten data. Further regions with poor technological infrastructure either don’t have the facility to support OCR systems or don’t have enough funds to acquire them.

Development and incorporation of new technologies to create lucrative opportunities for market growth

Technological advancements and upgradations will bring in the biggest transformation for the optical character recognition market. Developers are focusing on incorporating artificial intelligence (AI), intelligent character recognition (ICR), and big data technologies in the OCR systems. This will help the systems to study, learn, and understand the handwriting patterns and different styles in the same way that they are written. This will facilitate the optical character recognition systems to create more accurate and meaningful documents by decreasing the complexity of handwritten data. Further addition of cutting-edge technologies like machine learning and computer vision will create more such opportunities. This will help to increase data accuracy, efficiency, and facilitate better customer service. Also, the decreased errors would reduce the wastage of time, money, and energy on cross-checking the documents. Growing investments globally in the technology sector will further help to speed up the process of developing such technologies. 

Optical Character Recognition (OCR) Market, by Type:

Software segment will be the most lucrative till 2027

The software segment will have a dominating share in the global market, and it is expected to register a significant revenue during the forecast timeframe. The OCR software segment can be bifurcated into desktop-based, mobile-based, and cloud-based. Out of these, cloud-based segments are expected to hold the largest market share, whereas the mobile-based segment is expected to grow at a fast pace. The growing need for digitalization and reduce dependency on tangible documents to decrease cost and save time and energy has facilitated the growth of the software segment. The cloud-segment has become popular as it is highly efficient, doesn’t require space or setups, cost-effective, no maintenance, and ensures easy storage and access of all the files in one place. The mobile-based systems allow users to scan, store, and access documents from their own devices like mobile phones, tablets, and others.  This increases the mobility and convenience of carrying multiple data like bills, identification cards, files, invoices, letters, and other documents all on your mobile phones. Also, the users can extract meaningful data from various unstructured documents and create a database out of it for use in future times.

Optical Character Recognition (OCR) Market, by Vertical:

Banking, financial services and insurances (BFSI) sector to hold the largest market share

Banking, financial services, and insurance (BFSI) sectors are anticipated to hold the largest market share of the optical character recognition market during the forecast period. BFSI sector produces a vast amount of data on a daily basis. Most of this data includes transactional and financial information, which is extremely vital and must not be misplaced or leaked by any means. Optical character recognition systems allow BFSI sector employees to scan, store, and study various documents, receipts, cheques, invoices, bills, and other confidential data. This allows easy and secure management of complete data in one place and reduces the chances of errors in data or getting the information completely misplaced. OCR systems create digital copies of these data and store them in one place, which can be visited by only authorized people. This allows better customer service and increased safety and security of documents. These factors have allowed the BFSI sector to function smoothly because of which it has started investing massively in the optical character recognition market.

Transport and logistics sector to grow at a fast pace

The transport and logistics sector is expected to grow at a fast pace during the forecast timeframe. The rise in e-commerce, delivery systems, online selling and ordering of commodities,  and various other delivery services have massively increased the dependency on the transport and logistics segment. A properly functioning transporting and logistics organization would encounter fewer issues relating to delayed delivery, the wrong item delivered, or delivered at the wrong address. To ensure that such issues don’t occur transporting and logistics segment is heavily investing in the optical character recognition market. OCR systems help in scanning the tracking numbers and codes of the parcels, postal codes of delivery location, and other important information. This ensures that the information need not be written down manually. OCR hence helps in speeding up the process, eases tracking and shipping of packages, and drastically reduces cost. Also, opting OCR transport and logistics segment can deliver better customer service with high accuracy and eliminate chances of any faults. Due to such advantages, the transport and logistics sector has majorly started using OCR systems.

Optical Character Recognition (OCR) Market, by Region:

North America region to hold the largest market share

North America region is anticipated to hold the largest market share in the optical character recognition market during the forecast time period. The region has a robust technological infrastructure, which facilitates the growth of optical character recognition systems. Growing demand for automation of processes and reduce dependency on paper documents are driving the market growth. Further, increased demand for high speed and accurate solutions will boost the market growth in the region.

Asia-Pacific region to grow exponentially

Asia-Pacific region is expected to grow at an exponential rate in the optical character recognition market during the forecast period. The growing economic activities in the region is generating a humongous pile of data and information to be sorted and saved at a secure place. Governments and organizations have looked upon the OCR systems to solve these issues. Further increasing users of smartphones, the internet, and e-commerce has also facilitated the development of OCR systems in the region. Also, cloud-based and mobile-based solutions have become immensely popular for factors like high convenience and low costs. The development of technological infrastructure and advancements in present technologies will further create lucrative opportunities for the optical character recognition market in the Asia-Pacific region.

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Key Participants in the Global Optical Character Recognition Market:
Merger & acquisition and advanced product development are the frequent strategies followed by the market players

Some of the significant optical character recognition market players include IBM, Google, Adobe, Nuance Communications, Inc., Canon Inc., LEAD Technologies, Inc., Microsoft, ABBYY, SEAL SYSTEMS, Prime Recognition

Market Players prefer inorganic growth strategies to expand into local markets. Optical character recognition market players are focusing majorly on mergers, acquisitions, and advanced product development. These are the frequent strategies followed by established organizations. To emphasize more on the competitor analysis of market players, the porter’s five force model is explained in the report.

Source: Research Dive Analysis