A leading global investment bank engaged Likezero to support its Prime Brokerage and Credit Risk functions by digitising and operationalising legal agreement data at enterprise scale.

The engagement began under demanding regulatory timelines, with a clear objective: transform legacy and newly executed agreements into structured, trusted contract data to improve visibility, strengthen counterparty credit risk management and support regulatory compliance.

The initial programme focused on Prime Brokerage and collateral-related documentation, where large volumes of complex legal agreements limited timely access to critical contractual information. The implementation covered thousands of legal agreements, hundreds of legal entities and multiple jurisdictions, requiring a scalable approach to convert unstructured legal content into structured, actionable data for credit, legal and operational teams.

Following the successful implementation and transition into business-as-usual operations, the bank expanded the programme to include additional ISDA documentation and wider agreement types across the organisation. The programme was delivered in partnership with senior stakeholders across Prime Brokerage, Global Markets Technology, Documentation Management and Credit Risk.

The challenge

Following an industry-wide regulatory review, firms have been mandated to improve contract management and data extraction. Initially targeting cash prime brokerage and synthetic equity financing, the regulators broadened scope to include all sales and trading activities. Regulators urge banks to enhance protection against exposure and bolster counterparty risk management.

• Extracting data from thousands of client agreements/documents is a formidable task compounded by their unstructured nature and the presence of complex entity structures within them.
• Master trading agreements contain multiple terms scattered across documents, making the extraction process intricate and time-consuming. Moreover, our client’s Prime Brokerage Business consists of multiple business lines, adding another layer of complexity to the task.
• The initial project had to meet aggressive timescales from the regulators.
• The programme required collaboration across multiple stakeholder groups with varying business requirements and data needs.

Our response

The bank was committed to addressing the regulator’s requirements in Q2 2024 by presenting a comprehensive plan for extracting data from both old and new contracts and utilising it for managing counterparty risk assessment and onboarding.

Under the sponsorship of the Global Head of Prime Brokerage, the bank initiated a program and ultimately chose Likezero after evaluating various options. 

Collaboratively, we outlined a strategy to digitise the clients’ existing agreements, including ISDA/CSA, GMRA, Swap, Prime Brokerage Agreements, and Credit agreements across their top Hedge Funds clients in multiple jurisdictions. This encompassed approximately 500 entities and 7,000 documents, consisting of original agreements and amendments. 

Likezero successfully extracted approximately 500,000 data points against the agreed data model.
The generated outputs facilitate the client in analysing outcomes, detecting discrepancies in contractual terms, and identifying necessary actions for remediation. 

Furthermore, we established a standard business as usual (BAU) operational process to incorporate new agreements or amendments continuously, ensuring ongoing data capture and reporting. Leveraging a clause library developed during the implementation phase, we automated and streamlined the ongoing operational procedures.

Business outcomes

• Successfully met the regulator’s expectations.

• Accelerated onboarding time.

• Improved contract and client risk management leading to reducing capital charges.

• Delivered an output of qualitative, accurate, and traceable client contract data.

• Enterprise-wide deployment supporting multiple bank entities, jurisdictions, credit, risk, sales & trading and legal divisions.

Technical outcomes

• Real-time data accessibility for legal documents.

• Traceable, analysable data in a single repository.

• Extendable data model.

• Integration with upstream and downstream systems.

• Clause library of all legal terms.

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