The rise of generative AI (GenAI) has marked a transformative era in digital innovation. Over the past few years, GenAI-based intelligent document processing (IDP) solutions have evolved from experimental projects to critical components of business strategies enhancing operational efficiency and customer engagement. This evolution is particularly pronounced in sectors with comparatively high digital maturity, where AI-driven solutions have become a cornerstone of competitive advantage.
Analyst firm Infosource anticipates that GenAI will play an even more pivotal role in reshaping industry verticals, driving deeper integration with customer-facing processes, and accelerating the shift towards autonomous automation. However, this technological leap is also poised to widen the digital divide between industry verticals, creating a landscape where the most digitally mature sectors pull further ahead, while others struggle to keep pace.
AI’s impact on the IDP market
Over the past decade, AI has significantly shaped the IDP market. Initially focused on basic document capture and data extraction, the market has transformed significantly with the integration of advanced AI technologies. These advancements have enabled more sophisticated classification of business inputs, validation and approval processes, allowing businesses to handle vast amounts of unstructured data with growing accuracy and efficiency. This has streamlined both back-office operations and front-office processes, improving customer experience and operational efficiency.
Generative AI offers significant opportunities for IDP solutions, particularly in data-intensive industries like banking and insurance, GenAI enhances the automation of mission-critical business processes, such as account opening, loan management, and claims processing. These sectors can benefit from the ability to process unstructured data with minimal training efforts, leading to faster and more accurate decision-making.
However, the adoption of GenAI has not been without challenges. The initial hype surrounding GenAI in 2023 has given way to a phase of disillusionment, as industries grapple with deployment challenges. This has caused slow growth in GenAI-based IDP solution investments, with intensity differences between industry sectors and geographies. These challenges are attributed to knowledge gaps at the end-customer level, slowly evolving strong ROI results, and the ongoing evolution of expertise among vendors and integrators.
Digital maturity as an enabler
AI technologies have been key in evolving information capture solutions over the past decade. They have enhanced rules and template-based software for business document ingestion, progressing to intelligent capture. Vendors focusing on these opportunities have enabled end customers to achieve higher digital maturity.
Sectors with high digital maturity, such as the financial sector, have strongly embraced AI based IDP solutions in the past few years. These industries have long been pioneers in digital transformation, driven by the need for efficient processing of vast amounts of data and stringent regulatory requirements. They have deployed GenAI-infused IDP solutions to enhance the ingestion of business inputs including complex document types, and automate critical processes, improving customer experience and operational efficiency.
Conversely, industries with lower digital maturity, such as legal and education, face considerable challenges in adopting GenAI. These sectors often rely on manual, paper-based processes and lack the expertise to implement advanced AI solutions. The disparity in digital maturity across sectors is influenced by infrastructure sophistication, investment access, and competitive ecosystems.
Opportunities across sectors
The impact of GenAI varies significantly across industry verticals. The banking and financial services sector, with its high digital maturity, is expected to see the strongest interest in GenAI-based IDP solutions. Banks can use GenAI to analyze vast amounts of transaction data in real-time, identifying suspicious activities and preventing fraud. Predictive analytics powered by GenAI helps financial institutions anticipate market trends and customer needs, offering personalized financial products and services.
The Insurance sector leverages GenAI to enhance risk assessment, predictive analytics, and decision support. GenAI can automate data extraction and analysis from insurance claims, reducing processing times and improving accuracy. Predictive analytics enables insurers to assess risks more accurately and tailor policies to individual customer profiles.
In contrast, sectors like healthcare and manufacturing, with medium digital maturity, are gradually expanding their use of IDP solutions beyond traditional use cases. In healthcare, GenAI can automate patient record processing, medical imaging analysis, and administrative tasks improving diagnosis accuracy and patient experience. In manufacturing, GenAI transforms production processes, supply chain management, and quality control, enhancing operational efficiencies and reducing cost.
For sectors with low digital maturity, such as legal and education, the adoption of GenAI-based IDP solutions will depend on organizational culture, expertise, and demonstrated return on investment (ROI). The legal sector faces challenges but also significant opportunities for automation in areas such as contract analysis, legal research, and case management. In the education sector, GenAI-based IDP solutions can tailor educational content to individual needs and automate administrative tasks such as grading and scheduling, allowing educators to focus more on teaching and student engagement.
The public sector, with its varying levels of digital maturity, presents unique challenges. While some government agencies are highly digitized, others still rely on manual, paper-based processes. GenAI can enhance public services by automating administrative tasks, improving data management, and enabling predictive analytics. For instance, AI-driven solutions can streamline the processing of applications for government services, reduce wait times and improve service delivery. However, the adoption of GenAI in the public sector is influenced by budget constraints, regulatory requirements, and organizational readiness.
Analyst predictions for industry growth
Infosource forecasts the strongest interest in GenAI-based IDP solutions in sectors with advanced digital maturity, such as banking and financial services, followed by insurance. Sectors with medium digital maturity level, like healthcare and manufacturing, are expected to quickly overcome inhibitors and leverage new automation opportunities. For sectors with low digital maturity, such as legal and education, the speed of deployment will depend on organizational culture, expertise and demonstrated ROI.
In most verticals, there is a wide range of digital maturity, with the public sector showing the most extreme differences between highly digitized agencies and those still operating manually. Infosource’s 2023-2028 growth forecast predicts a compound annual growth rate (CAGR) above the industry average for the Banking sector, further expanding its importance as a target market for advanced IDP solutions. Smaller verticals with above-industry growth rates include the energy sector, telecom & utilities, retail, and outsourcing service providers.
Expected impact on the digital divide
GenAI holds immense potential to transform industries by enhancing automation, efficiency, and customer experience. The integration of GenAI into IDP solutions offers significant opportunities for improving data classification, extraction, and process automation with minimal training efforts. These capabilities are particularly valuable in industry sectors with advanced digital transformation, such as banking and financial services, where it enhances risk assessment, predictive analytics, and decision support.
While other industries also stand to benefit, many will take longer to embrace IDP solutions that leverage advanced AI technologies. These sectors, characterized by lower digital maturity, start at a disadvantage compared to more advanced industries. They face higher hurdles, such as infrastructure limitations, lower knowledge levels in GenAI technologies, and cultural resistance to change.
This disparity in digital maturity and expected adoption of GenAI technologies is likely to widen the digital divide. Advanced industries will continue to thrive, while others struggle to catch up. It is crucial for organizations in less mature sectors to focus on enhancing their digital maturity, investing in infrastructure, and closing knowledge gaps to harness the potential of GenAI. By doing so, they can drive sustainable growth and innovation, ensuring they do not fall further behind.
Recommendations for end customers
Assess your digital maturity: Conduct a thorough assessment of your organization’s current digital maturity level, and identify gaps in infrastructure and data quality.
Close gaps in expertise: Invest in training programs to upskill your workforce in AI and automation technologies. Identify subject matter experts to lead GenAI implementations.
Prioritize high-impact use cases: Identify and prioritize use cases where GenAI can deliver significant ROI. Start with projects that demonstrate value within months like the automation of multi-modal input ingestion.
Enhance data quality: Ensure the reliability of data in content repositories used for validation, augmentation and automated decision making.
Assess vendors and integrators: Evaluate software vendors and integrators for their expertise in Advanced AI technologies and proven successes in implementing GenAI solutions.
Ensure regulatory compliance and ethical use: Stay informed about evolving legislative frameworks and compliance requirements related to AI and data processing.
Plan for continued updates and expansion:
Keep track of technological enhancements and best practices in your industry. Continuously evaluate the performance and impact of your GenAI implementations. Following these recommendations will help organizations harness the power of GenAI to drive digital transformation and stay competitive in their industries.
