NLP based Model for LIBOR Contract Analysis

IBORs (e.g. LIBOR) which serve the key function of price signalling are set to be replaced by Alternative Reference Rates (ARR) by end of 2021. The well entrenched nature of IBORs–USD 200-300T in exposure-across Loans, Derivatives etc. complicates this transition process.This transition event not only exposes institutions to financial risks (differences between IBOR & ARR) but also to reputation, conduct and legal risks depending on the institution’s approach to resolution. A single bank may have hundreds of thousands of contracts which need scrutiny for IBOR fall-back. Machine Learning based solutions can automate ~70% of contract review tasks with a high level of confidence. Through Intellect Capital Cube Analytics module(NLP based), we could facilitate evaluation of LIBOR contracts, thereby simplifying the efforts required in identifying contracts which needs attention. Our NLP based solution helps Financial Institutions to:

  • Automate ~70+% of contract review tasks
  • Have a dashboard view of LIBOR specific terms identified for decision analysis
  • Mitigate reputation and legal risks which may arise due to IBOR Transition.

 

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