Delta Capita, a financial services business, technology consultant and managed services provider, has adopted Luminance’s AI technology to assist with LIBOR, IBOR and EURIBOR transition projects.
LIBOR, which is estimated to be embedded in up to USD340 trillion worth of financial contracts worldwide, is the most widely used benchmark for short-term interest rates. Nonetheless, its impending demise has generated calls to action across the global banking and finance industry as institutions are faced with the complex and arduous task of reviewing and remediating contracts tied to the LIBOR rate. To support their financial services clients with the enormous task of reviewing and repapering contracts, Delta Capital are using Luminance’s powerful machine learning technology to better understand risk exposure across their contracts and thus mitigate the impact of the transition.
Luminance is the only platform on the market that uses supervised and unsupervised machine learning to read and form an understanding of legal data, meaning that it is able to instantly surface key datapoints, clauses and anomalies without the need for lengthy machine training or configuration. By using Luminance, Delta Capita will be able to instantly surface critical LIBOR-related provisions such as LIBOR definition, Interest Rate definition, LIBOR fallback and Change in Law. Luminance is then able to learn from the interaction of the reviewer to generate additional insight. For instance, by tagging a clause like ‘LIBOR Discontinuation Event’, Luminance is then able to surface all other similarly-worded examples, ensuring nothing is overlooked in the review. Luminance’s unique synchronisation with Microsoft Word ensures that reviewers can then easily apply this insight in order to amend and remediate contracts, all from within the Luminance platform.
Ben Pugh, Head of Business Development at Delta Capita’s Structured Products business, says: “The effort and cost of reviewing financial contracts using manual methods is unfeasible for many of our clients with less than a year to go before transitions should be complete. Using Luminance’s revolutionary technology, we can help clients ensure a seamless transition away from the LIBOR, IBOR and EURIBOR benchmarks. Luminance’s game-changing technology provides real value out-of-the-box, exposing LIBOR-related risk across often vast data sets and can be used for assurance to check complete capture of all clauses as equally as it can for initial discovery.”
Clementine Fox, Luminance’s Head of Account Management, says: “The transition away from interbank offered rates such as LIBOR, IBOR and EURIBOR is an example of a problem that is best tackled with AI. Using Luminance, Delta Capita will drastically reduce the time of locating, understanding and remediating the volume of LIBOR, IBOR and EURIBOR-related documents from a few months to a matter of days, and at the same time will be instilled with the greatest confidence that nothing has been missed in their review.”