With trillions of dollars’ worth of financial contracts referencing LIBOR, with maturities past 2021, the greatest challenge for organizations as they transition away from IBOR will be in identifying all references within their organization and determining the total downstream impact.
Distilling the informational critical path, without losing the bigger picture.
IBOR transition is likely to be one of the most transformative programmes many firms have undertaken. Organizations need a clear understanding of how IBORs are utilized, referenced and should have suitable planning & resourcing in place to manage the transition.
Whilst the legal and operational challenges which this change will pose for banks are not unprecedented, they are wide-ranging and of a massive scale. LIBOR was once dubbed the “world’s most important number” and it affects millions of contracts, which will need to be reviewed, repapered, redrafted or renegotiated.
The highest hurdle organizations face, as they transition away from IBOR and develop their transition strategy, is in identifying all impacted products/contracts1 within their organization, developing an inventory of those referencing IBORs (both directly and indirectly) and consolidating impacted contracts into a repository for analysis, decision-making, remediation and repapering (where necessary).
JDX’s enterprise document digitization solution accelerates the roadmap to risk mitigation. We catalogue contracts in a repository, deploy Seal’s Contract Analytics platform powered by artificial intelligence/machine learning (AI/ML) along with JDX’s proprietary data extraction models, to digitize vast numbers of contracts into machine readable formats, extract relevant terms via customizable SME driven logic and tailored AI rules, to interpret those terms into a structured data set for downstream consumption.
JDX’s solution recognizes that AI’s effectiveness directly relates to the extent to which it was trained by Subject-Matter-Experts (SMEs) on representative sample documentation, SMEs are engaged to tailor the AI rules to the idiosyncrasies of their client.
JDX and Seal’s combined powerhouse document digitization solutions are designed to meet complex document digitization challenges in the financial services sector. It leverages JDX’s agile AI-building methodology, allowing customers to quickly pivot tactical documentation projects into a strategic digitization roadmap.
JDX announced a partnership with Seal Software on 4 February 2020.
1 all contracts must be reviewed for potential references to IBOR – ISDA masters/CSAs/confirms, loans, leases, credit agreements, IMAs, repos, etc.