Delta Capita adopted technology from Luminance, an artificial intelligence platform used by accounting firms, to support its transition from London Interbank Offered Rate (LIBOR), Interbank Offered Rate (IBOR) and Euro Interbank offered (EURIBOR) projects.
LIBOR, estimated to be embedded in up to $ 340 trillion in financial contracts around the world, is the most widely used benchmark for short-term interest rates.
Delta Capita says it is using Luminance’s machine learning technology to better understand risk exposure across contracts and thereby mitigate the impact of the transition.
The financial services company will be able to instantly reveal essential LIBOR-related provisions, such as the definition of LIBOR, the definition of the interest rate, the LIBOR pullback and changes in the law. Luminance is then able to learn from the reviewer interaction to generate additional information.
Luminance claims that its unique synchronization with Microsoft Word ensures that reviewers can then easily apply this information to amend and correct contracts, all from within the Luminance platform.
It claims to be the only platform on the market that uses supervised and unsupervised machine learning to read and understand legal data.
Ben Pugh, Business Development Manager for Delta Capita’s Structured Products business, says: “The effort and cost of reviewing financial contracts using manual methods is unachievable for many of our clients with less. ‘one year before the end of the transitions.
“By using Luminance’s revolutionary technology, we can help customers ensure a seamless transition away from LIBOR, IBOR and EURIBOR benchmarks. Luminance’s revolutionary technology delivers real value out of the box, exposing LIBOR risk in often large data sets and can be used to ensure full capture verification of all clauses in the same way as for the initial discovery.
Clementine Fox, Account Manager at Luminance, adds: “The transition from interbank offered rates such as LIBOR, IBOR and EURIBOR is an example of a problem that is best solved with AI.
“By using Luminance, Delta Capita will significantly reduce the time to locate, understand and correct the volume of LIBOR, IBOR and EURIBOR related documents from a few months to a few days, and at the same time will be instilled with the utmost confidence that nothing. was not missed in their review.