Why Germany Lags Behind in Digitalizing the Credit Industry

Why Many Documents in Germany Are Still Evaluated Manually -- and How Other Countries Do Better

While the digitalization of the financial world has revolutionized the industry, in Germany, the manual evaluation of documents such as salary statements, tax assessments, or company balance sheets remains standard in many places. Despite the progress made by the German Credit Industry (DK) in recent years, Germany lags behind other countries like Great Britain, Switzerland, or Italy in the digitalization of the credit industry. What are the reasons for this, and what can we learn from these countries?

The Status Quo in Germany

In Germany, manual checks continue to dominate for various reasons:

Strict Legal Requirements: Regulations such as the Banking Act (KWG) and European banking supervision requirements demand high transparency and traceability. Automated processes in banks often don't yet provide the necessary security. 

Document Diversity: Submitted documents vary greatly: from scanned PDFs to machine-generated documents to unstructured data. This variety overwhelms many digital systems and requires manual interventions. 

The consequence is a hybrid strategy combining manual and digital processes. While this ensures quality, it is time and resource-intensive.

Looking Beyond Borders: How Other Countries Do It

A comparison shows that other European countries specifically use technologies like OCR technology for banks and AI to overcome regulatory and technical hurdles. Providers like Prestatech play a key role here.

1. Automated Compliance Despite Strict Regulations (UK and Switzerland)

In Great Britain and Switzerland, banks rely on AI-powered OCR systems to meet legal requirements. These tools extract relevant information, flag anomalies, and create traceable reports. This increases transparency and reduces human error -- an advantage in regulatory audits.

2. Efficient Processing of Different Documents (Italy)

Italy uses specialized OCR systems to handle the variety of submitted documents. While machine-generated PDFs are processed easily, handwritten or unstructured data still require manual interventions. Nevertheless, the technology significantly reduces effort.

3. Better Detection of Gray Areas and Fraud (UK, Switzerland, and Italy)

AI technologies can recognize complex relationships and patterns indicating fraud or irregularities. In Great Britain and Switzerland, AI-powered systems often show more precise results than manual checks and detect irregularities faster.

Why Does Germany Remain Behind?

The slow implementation of modern technologies in Germany has several reasons:

Investment Barriers: Many banks work with outdated IT systems, making modernization costly. 

Cultural Skepticism: The dependence on manual processes is deeply embedded in German financial institutions' structures. 

Regulatory Hesitation: German banks hesitate to use new technologies to avoid regulatory conflicts. 

Conclusion: What Germany Can Learn

The international comparison shows that technologies like OCR technology in banks and AI can not only overcome legal and technical hurdles but also improve credit assessment quality. Providers like Prestatech prove that strict regulations and document diversity are not insurmountable obstacles.

Benefits of Automated Solutions:

Higher Efficiency: Repetitive tasks are completed faster and more cost-effectively. 

More Precise Checks: Errors are minimized, and potential fraud cases can be detected earlier. 

Staff Relief: Given the shortage of skilled workers, personnel resources can be deployed more strategically. 

Germany needs to catch up in the digitalization of the credit industry. With technological investments, regulatory clarity, and cultural change, the German credit industry can also benefit from the advantages that other countries are already using. The path may be challenging -- but it's inevitable to avoid falling behind in international competition.