The challenge

The collateral industry has undergone a sea-change since 2016; the advent of uncleared margin reform has materially increased the volume and complexity of contracts that market participants must handle, coupled with such a challenging operating environment, regulators now placing more scrutiny on the ability of institutions to respond quickly and robustly to risk events.

A leading European investment bank was looking to transform its collateral contract data operations, focusing on:

• Increasing the quality of collateral data in their systems

• Capturing additional data points not currently input into margining systems

• Reducing the operational time and cost to process new contracts through automation

• Reducing operational, credit and legal risk

• Search and analytics capabilities of digitised documents and associated data

Our response

Likezero’s techniques are specifically designed to streamline contract data operations, allowing firms to swiftly access contextualised contractual insights and invaluable information for making critical risk decisions and building strong trading relationships.

We delivered a successful proof of value, demonstrating the software’s ability to handle document complexities and identify data gaps. This accomplishment led our client to choose Likezero for a full scale digitisation of their 9,000 Collateral Agreements (23,000 documents), and to integrate our software into their regular business processes.

We built a digital clause library that significantly expands the bank’s data capabilities and fully streamlines the processing of new documents  – there is no other software on the market that can achieve this for a bank. The banks teams are now able to concentrate on high-value, strategic activities that drive growth and success.

Agreement Types

Legacy and Regulatory CSAs, Initial Margin Agreements, Security Agreements, Account Control Agreements

Global Coverage

Including New York, English, French and German documents covered

Business outcomes

• Streamlined agreement processing: Newly executed agreements automatically processed and data available in the collateral system within 30 minutes, drastically reducing manual processing costs.

• Improved data quality: Validating data points, minimising errors and enhancing risk management.

• Advanced contract searching and analytics capabilities: Advanced search on new and existing clauses – to support credit and market events, and contract analysis.

• Scalable rollout: Rolled out to additional business units and expanded scope of documents i.e. Prime Brokerage.

Technical outcomes

• Managed cross-agreement relationships such as Replicate and Amend scenarios.

• Handled complexities of large multiple-entity umbrella agreements (legal entries under a single legal agreement).

• Auditability of extracted data to original document, including traceability of amendment history.

• Digitisation of complex collateral tables and intra-document complexities.

• Normalised data feed to downstream data store.

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