WTF is Intelligent Document Processing?

Source: Dev.to

What is Intelligent Document Processing?

Intelligent Document Processing (IDP) is a technology that uses artificial intelligence (AI) and machine learning (ML) to automatically extract, categorize, and process data from various types of documents. It functions like a super‑smart clerk that can read, understand, and make sense of even the most complex documents, handling everything from handwritten notes and scanned images to digital files such as PDFs and Word documents.

Example: A bank receives thousands of loan applications daily, each accompanied by pay stubs, tax returns, and identification proofs. Traditionally, humans would manually review each document, extract relevant information, and enter it into the bank’s system. With IDP, this entire workflow can be automated, freeing human resources for more strategic and creative tasks.

Why is it trending now?

• Data explosion: Companies process massive volumes of documents. According to IBM, the average company handles over 1 million documents per year.
• Digital transformation: Organizations seek to streamline processes, reduce manual errors, and boost efficiency.
• Advances in AI/ML: Modern AI and ML models can accurately extract data from highly complex documents.
• Lower costs: The price of implementing IDP solutions has dropped, making the technology accessible to businesses of all sizes.

Real‑world use cases

• Finance: Automates processing of loan applications, credit‑card applications, and other financial documents.
• Healthcare: Extracts data from medical records, insurance claims, and other healthcare‑related documents.
• Government: Processes tax returns, voter registration forms, and other official paperwork.
• Retail: Automates handling of invoices, receipts, and other business documents.

Case study: A leading insurance company used IDP to automate claim processing, cutting processing time from 10 days to just 2 hours, resulting in significant cost savings and higher customer satisfaction.

Common misconceptions

• IDP replaces humans: IDP is designed to augment human capabilities, not replace workers. It automates routine, repetitive tasks, allowing people to focus on complex, creative work.
• Only for large enterprises: While early adopters were large companies, many IDP solutions are now cloud‑based and affordable for small and medium‑sized businesses.

TL;DR

Intelligent Document Processing (IDP) leverages AI and ML to automatically extract, categorize, and process data from a wide range of documents. Its rise is driven by digital transformation, exploding data volumes, advances in AI/ML, and decreasing implementation costs. IDP is used across finance, healthcare, government, and retail, and while misconceptions exist, it serves to augment—not replace—human workers.