Optical Character Recognition Market Size, Share & Trends Analysis Report By Type (Software, Services), By Vertical (BFSI, Transport & Logistics), By End Use (B2B, B2C), By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global optical character recognition market size was valued at USD 8.93 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 15.4% from 2022 to 2030. The optical character recognition (OCR) technology converts printed and physical documents into machine-readable texts. It extracts scanned papers, image-only pdfs, and camera images and repurposes them. OCR software extracts letters from images and translates them into words and then sentences, allowing access to alter the original text. Moreover, widespread adoption of OCR technology has been observed in BFSI, healthcare, retail, tourism, logistics, transportation, government, manufacturing, and other sectors. The growth of the OCR market is primarily attributed to the improvement in productivity and a rise in the penetration of automatic recognition systems. For instance, in November 2021, HT. KZ, one of the leading travel industries in Kazakhstan, deployed Smart Engine OCR technology that provides document recognition solutions. This technology helps scan its client's passport securely in less than a second through the AI software, which reduces the workload of managers to enter the passport data manually. This solution Combines AI with OCR capabilities.

Digitalization in business organizations has made all the processes faster and more accessible. As companies witness technological advancements, data is becoming a critical element for growth. When data is converted to digital form, it can be processed by computers and various devices with computing capacity, and this data is easy to share, access, and store. Companies established before digitalization became a norm in the enterprise sector have also started using tools, such as OCR, to convert their physical data into digital form. The technology also finds increasing application in BFSI and healthcare sectors for creating digital copies of checks, invoices, and other documents. For instance, banks in China utilize OCR software in conjunction with facial recognition software that can protect ATMs as some ATMs require the consumers to input their photo ID, which the program scans for the person’s name and face. They also use OCR software to review the paper applications and other papers that the customer may use to demonstrate responsibility or creditworthiness. Besides, in June 2021, Visionet Systems., a digital solutions provider to the BFSI, launched a new product named DocVu.AI, an AI-powered Intelligent Document Processing. It is a platform for handling a large amount of unstructured and structured data. Banks or financial institutions would easily search, analyze, extract, and manage data sets efficiently. With its AI and machine learning platform, DocVu.AI can meet the needs of the BFSI.

The OCR technology is also being widely used for converting information available in text form into speech with the help of text-to-speech technologies, thus making it accessible to blind and visually impaired individuals. Other applications of the technology include sorting out letters at post offices and documents in law firms and courts, preserving historical and cultural texts, personal identification, and processing invoices, orders, and other documents. For instance, in June 2021, IBM, a U.S.-based company, acquired Turbonomic, an AI-powered application. This acquisition is expected to use AI through machine learning, natural language processing, and optical character recognition.

Numerous benefits of optical character recognition technology have helped companies save time spent on entering data manually in computers, enhancing work management, reducing the cost of converting documents into digital form, and reducing manual errors, among others. It also offers other benefits such as improved customer service and increased documents security, significantly propelling demand across industries, including BFSI and retail. The increased focus of cognitive solution developers on integrating advanced technologies to improve accuracy is also expected to significantly drive the market in the near future. For instance, Envision, a smartphone app that helps blind and low vision users, introduced AI-powered smart glasses helping visually impaired and blind users to have hands-free access and make everyday life more accessible. These smart glasses will have optical character recognition capability.

Type Insights

The software segment led the market in 2021 and accounted for over 80.0% share of the global revenue. The software segment is anticipated to witness substantial growth over the forecast period. The OCR software segment can be divided into desktop-based OCR, cloud-based OCR, mobile-based OCR, and others. The growing need to digitize and reduce the dependence on physical documents to save cost, energy, and time has aided the expansion of the software segment. Further, the market has grown due to the increased adoption of augmented reality in platforms like healthcare, BFSI, and retail. For instance, in March 2021, Smart Engine, a Russian software development company, partnered with Promobot Thermocontrol, a robotics company, which developed a Promobot Scanner. This partnership would let Smart Engine deliver a high-end document recognition, increasing the form filling productivity by automatically retrieving data from documents. It also includes next-generation biometric passports with smart engine identification scanning and Green Engine Technology.

The services segment is expected to expand at a lucrative CAGR of 16.8% over the forecast period. Outsourcing services dominated the services segment in 2021. Business owners outsource their data extraction services to get synthesized information and utilize it for better decision-making. There are numerous companies offering outsourcing services for optical character recognition operations. For instance, Data Entry Inc. offers OCR cleanup services with a wide range of outsourcing OCR, such as OCR bulk volumes, OCR database cleanup, OCR data conversion cleanup, and OCR error control. For instance, in February 2022, nRoad, a U.S.-based company, launched its new product Convus, an OCR AI-enabled platform for organizations to overcome the challenges of extracting from unstructured data, such as photos, audios, videos, and text-based documents. Other implications of this tool include searching regulatory and legal documents for investments, reducing fraud risk during the loan process, intelligent contract verification, and detecting violations in the contract.

Vertical Insights

The BFSI segment led the market in 2021 and accounted for over a 15.0% share of the global revenue. The BFSI sector is anticipated to witness substantial growth over the forecast period. The growth can be attributed to the use of OCR, optimizing performance, and automating time-consuming operations. For financial services, it helps in document scanning, credit card scanning, and data entry to transform all the data into a format that a computer can recognize and understand. For instance, Appzillon, i-exceed’s low code digital platform, provides digital banking solutions for banks and financial institutions. For another instance, Citigroup. Inc., a U.S.-based banking and financial services corporation, uses Appzillon's banking solution to improve its process efficiency in corporate banking solutions. It simplifies and enhances the customer experience with its rich user experience with new advancements in the digital platform. Besides, in July 2021, Malaysia's CIMB Bank Berhad and CIMB Islamic Bank Berhad introduced an NLP (Natural Language Processing) chatbot for SMEs (Small and Medium Enterprises) customers to enhance their experience, instantly resolving their issues on all SME products.

Character recognition is anticipated to continue finding applications across various industries in the near future. For instance, in the Travel industry, OCR helps in data storage and security purpose, thereby scanning the passport to save personal data while booking tickets. Rather than noting it down physically, OCR makes the work easy by reducing the costs. Besides, Rossum. AI-powered OCR uses OCR machine learning and AI to capture data. It recognizes the invoices and allows the account payable professionals to liberate themselves from the monotonous grind of manually extracting invoices.

End-use Insights

The B2B segment led the market in 2021 and accounted for over 75.0% share of the global revenue. The B2B segment is anticipated to witness substantial growth over the forecasted period. The growth is attributed to the adoption of software solutions by various businesses to combine optical recognition technology with intelligent features to allow customers to extract data from archived forms. It will enable companies to organize their data digitally and make it usable and accessible. In addition, it eliminates the manual data entry process. For instance, in October 2021, Tata CLiQ, a Tata Groups e-commerce platform, uses Adobe to scale its business and offer a personalized shopping digital experience in its mobile application and website.

Business organizations are using OCR for information retrieval using searchable PDF format. Such software allows the conversion of image-only PDF files and paper documents into searchable files, including an invisible overlay containing searchable text to the scanned bitmap image of the paper document. It enables using a digital file system as a searchable database to find names, phrases, and keywords to help locate the information needed. Furthermore, government firms and officials use OCR solutions to scan legal documents, including driver’s licenses, insurance certificates, passports, and vehicle number plates.

Regional Insights

North America dominated the market in 2021 and accounted for over 35.0% share of the global revenue. This can be attributed to the presence of leading market players in the U.S. and the early adoption of new technology in the businesses, contributing to the regional market growth. For instance, in October 2021, AlphaSense Inc., a U.S.-based market intelligence company, raised a Series C funding round of USD 180 Million, bringing its total funding to USD 263 Million. Besides, in July 2021, CognitiveScale, an AI-powered digital system, released its latest technology, Cortex Fabric 6, a low code developer platform for the transformation, automation, and augmentation of digital experiences. This technology would enable businesses to build reliable AI applications more affordable and faster.

The Asia Pacific market is expected to exhibit the highest CAGR of 18.0% during the forecast period. Asia Pacific is anticipated to witness significant growth over the forecast period. The growth can be attributed to the significantly increasing investments in AI and related technologies. The growing technology industry in the emerging economies of Asia Pacific is particularly promoting the adoption of solutions with OCR capabilities. For instance, in January 2022, Axera Tech, a Chinese AI startup, has closed its Series A++ funding round worth USD 125.9 million to expand its business and develop AI vision processor chips. The company’s core product is widely used for smart retail, smart cities, smart homes, and smart communities. Besides, in January 2022, AIMMO, a Korean AI startup, has raised a Series A funding round worth USD 12 million to advance its technology and expand its business globally towards data labeling. The company is mainly focusing on autonomous driving and smart city.

Key Companies & Market Share Insights

Vendors in the industry are now integrating the capabilities and delivering advanced software within the hardware and software to enable OCR across business boundaries and meet the need. Besides, vendors are implementing partnerships, mergers, and acquisitions to compete in the market effectively. For instance, in December 2021, Adobe, a computer software company, partnered with Microsoft, a U.S.-based tech giant. This partnership will help enterprises enable their customer experience with Microsoft Azure, Adobe Experience Cloud, and Microsoft Dynamics. Furthermore, in April 2021, Microsoft acquired Nuance Communications, an AI and speech recognition-based company, and this acquisition would increase the presence of Microsoft cloud for healthcare. Some prominent players in the global optical character recognition market include:

• ABBYY

• Adobe

• Anyline GmbH

• ATAPY Software

• Captricity Inc.

• Creaceed S.P.R.L.

• CVISION Technologies, Inc.

• Exper-OCR, Inc.

• Google LLC

• International Business Machines Corporation

• IntSig Information Co., Ltd. Corporation

• IRIS S.A.

• LEAD Technologies, Inc.

• Microsoft

• NAVER Corp.

• Nuance Communications, Inc.

• Open Text Corporation

Optical Character Recognition Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global optical character recognition market report on the basis of type, vertical, end use, and region:

• Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Software

    • Desktop-based OCR

    • Mobile-based OCR

    • Cloud-based OCR

      • Private

      • Public

    • Others

  • Services

    • Consulting

    • Outsourcing

    • Implementation & Integration

• Vertical Outlook (Revenue, USD Million, 2017 - 2030)

  • Retail

  • BFSI

  • Government

  • Education

  • Transport and Logistics

  • Healthcare

  • IT & Telecom

  • Manufacturing

  • Others

• End-use Outlook (Revenue, USD Million, 2017 - 2030)

  • B2B

  • B2C

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

  • South America

    • Brazil

    • Argentina

  • Middle East and Africa (MEA)

    • Saudi Arabia

    • UAE