In response to increasing regulatory requirements, banks and other participants in the OTC derivatives market need to improve their ability to manage counterparty exposures and the corresponding collateral obligations.
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These increased regulatory demands, born out of the financial crash, have seen a rise in central clearing for OTC derivatives, the use of trade depositories, tightening of eligibility criteria, Basel III capital charges and a change of internal counterparty credit risk management practices to name but a few constraints, now pushing operations departments to their limits.
As a result, Artificial Intelligence (AI) and the automation of the process of reading and extracting key provisions and definitions from contracts is becoming an increasingly attractive option for operations and legal departments to meet their regulatory obligations.
The RAVN Extract for ISDA CSAs Solution
RAVN Extract, an application built on the RAVN ACE platform, combines elements of AI with information processing to deliver a platform that can read, interpret, extract and summarise the content held within ISDA CSAs and other legal documents. It converts unstructured data into structured output, in a fraction of the time it takes a human – and with a higher degree of accuracy.
Firstly, RAVN ACE can extract the structure of the agreement – the clauses and sub-clauses – which can be very useful for subsequent renegotiation purposes, particularly if you adopt renegotiation solutions that can leverage this structure.
It then further extracts the key definitions from the contract, including collateral data from tabular formats within the credit support annexes.
All this data is made available for input to contract or collateral management and margining systems or can simply be provided as an Excel sheet, XML file or any other structured form.
RAVN ACE also provides an in-context review and preview of the extracted terms to allow reviewing teams to further validate the data in the context of the original agreement.
Clients chose to work with RAVN as our ‘Applied‘ Cognitive Engine is thoroughly applied to the business. We listen to the firm’s issues and create a robot that specifically handles those issues within that domain. Our technology can be deployed as standalone solutions or some organisations chose to combine our products to complement each other, ensuring all needs are met.
There are various payment options – the technology can be delivered as a service, pay per document model or enterprise license.
Even where companies have a good understanding of their contracts and collateral, RAVN’s AI based data extraction can provide an audit service to compare the actual terms in the current document set and addenda with what has been manually abstracted, often over considerable periods of time. Due to the historic nature of some agreements, and from past experiences of other manual abstraction exercises, there are likely to be differences. The audit process can validate your data and provide assurances that your policies are based on accurate data.
Having extracted (or audited) the metadata, AI data extraction systems can then analyse the contract estate, identify the high credit risk relationships and as a result, quickly and easily scope the size of the repapering exercise required.
Benefits of Automated ISDA Data Extraction
- Automatically extract the terms of your OTC Derivative contracts (ISDAs/CSAs) for improved management and keep the cost of compliance under control.
- Rapid audit of your contract estate understanding to ensure it is truly representative. Save the time and cost of the manual alternative.
- Fast identification of the agreements that require repapering.
- Mitigate the risk and penalties for non-compliance with the latest EMIR, FSB and other regulatory changes.
Watch our Case Study on BLP’s use of RAVN ACE
See how RAVN ACE has benefited Berwin Leighton Paisner in terms of increasing efficiencies, mitigating risk, cutting costs as well as increasing staff morale.
- Our primary goal here is to leverage knowledge to accelerate business and deal decision-making and to harness the collaborative power of a multi-geography growth markets organisation. RAVN Connect is an important component in a differentiation we bring to our investors around how we share knowledge and get to more dynamic decisions on deal flow. Additionally, it helps us harness macro-economic, sectoral and functional knowledge flows seamlessly and is ultimately a major competitive advantage for us.Ovais Naqvi, Managing Director – Head of Market Engagement at Abraaj
- It's likely to save us tens of millions of pounds in lost revenue.Horia Selegean, Head of Revenue & Margin Assurance
- Sky are committed to using the latest innovations to ensure our customers receive the best possible viewing experience. RAVN’s AI component has allowed us to successfully automate the EPG review process which has dramatically reduced the review time as well as ensuring we maintain robust and compliant information">Angus Gairdner, Head of Content Planning Operations at Sky
- By adopting this innovative platform we are able to quickly focus on the high value and high risk contracts within large data sets, simply categorise and divide up tasks and ultimately provide a more responsive service to our clients. We are now looking to roll out the RAVN solution to live client matters within the firmLucy Dillon, Chief Knowledge Officer at Reed Smith
- The RAVN solution effortlessly made all of our operational content, valuable precedent and knowledge content discoverable within the firm’s chosen collaboration and Search platform, Microsoft SharePoint. As such, the disruption for users was negligible, yet the benefits from efficient search, preview and expertise location across a geographically distributed organisation have been significant.Jeremy Rooth, Director of Business Transformation & Knowledge Management
- RAVN Manage and RAVN Connect Enterprise supplement our current systems extremely well. With both systems, searches become even more efficient and documents may be retrieved significantly faster than before. The fact that the systems understand how people work together and are able to spot cohesion through entire cases is a real strength in our daily operations. In Bech-Bruun, this is a highly strategic focus area. Moreover, RAVN is a pioneer in the area and we consider this as the first step to full implementation of AI.Stefan Winqvist, CIO at Bech-Bruun
- RAVN ACE robot is 10 million times quicker than the manual labour it replacedMatthew Whalley, Head of Legal Risk Consultancy, BLP, Legal Futures Event Quote
- Our 'contract robot' can now finish in less than two seconds work which would have taken a team of people 100 days to complete.Matthew Whalley, Head of Legal Risk Consultancy at BLP
- RAVN were very good at adapting a technical product and speaking about it in a non-technical way. We explained the problems we were facing and they offered a solution and explained it in an easy-to-understand and user friendly way.Victoria Blanchard, Consultant at Berwin Leighton Paisner
- RAVN ACE is the most exciting new development we’ve seen for several years…a true next generation systemIndependent Legal IT Consultant at Inside Legal IT event
- RAVN is very competitively priced at the moment and provides a standardised Windows interface so it needs much less integration. “It’s really simple and mimics the tech people already use. I’m focused on systems that are intuitive to use – unless it’s very simple to use people don’t have the time to work it out and remember how to use it.Jeremy Rooth, Director of Business Transformation and Knowledge Management at Withers
- The RAVN solution allows us to leverage the inherent search capabilities that are now included with SharePoint 2013 and with the RAVN connectivity layer provided, we have the ability to extend to our broader information corpus as required.Richard Skinner, Applications Architect at Taylor Wessing