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AI and Contract Management are the Solutions for Initial Margin Requirements Compliance

AI and Contract Management are the Solution for Initial Margin Requirements Compliance
AI and Contract Management are the Solution for Initial Margin Requirements Compliance

July 25, 2018 Paul Nelmes Contract Management   Risk and Compliance  

Conquering Margin Requirements with AI and Contract Management

Margin Requirement reform has been a major concern amongst global financial services firms for the past two years and it’s only going to get more challenging over the next two years. You may remember we addressed the topic of uncleared derivatives regulations back in 2016 when the regulation first came into force. These rules were brought into effect to prevent a repeat of the financial crisis that occurred in 2008/9. We discussed how it’s time for banks to “buckle down” and start the re-papering process for their credit support annexes. The fastest and most cost-effective way to do this is by integrating an automated system to support the process. Alternatively, you could spend a lot more by outsourcing it all to a third-party organization.

Now, the OTC derivatives market faces substantial challenges as the scope of Phases 4 and 5 of IM requirements means a huge increase in the number of ‘in-scope’ counterparties, the volume of agreements, plus added complexity, with the inclusion of custodians.

How Contract Management and AI Can Help

Exari has already proven to be successful platform for the earlier phases of IM regulation, supporting our customers and legal services partners, such as Document Risk Solutions and PwC to complete large-scale client outreach, contract re-negotiation and execution.

A key differentiator for the upcoming IM requirements is Artificial Intelligence. Exari previously offered an automated approach, but now with our AI capability, it’s even better! With an AI enabled engine, companies can now extract all the data directly from existing documentation and automatically capture and reconcile agreements, instead of spending hour-upon-hour reading and analyzing thousands of documents.

With the help of an end-to-end contract management solution you’ll be able to:

  • Manage and successfully complete counterparty and custodian outreach and data capture
  • Rapidly produce accurate and compliant agreements/documentation
  • Reduce or avoid costs of outside legal and consultants

If you are one of the entities that will be impacted by the Initial Margin rules you should consider Exari as your solution. With a complete contract lifecycle management platform, institutions can complete the necessary steps to become compliant with the Initial Margin requirements. For more information on how our solution can help you overcome these challenges, contact us now.


Paul Nelmes is Exari’s VP of Sales, Financial Services. @Paul_Exari