Legal Data / Structure and Management
ISDA Master and Collateral Agreement documentation contains commercial terms with economic value and represent a potential source of expensive legal risk. Following the global financial crisis, regulatory reform has driven a deep dive into the detail of the documentation and the related data. Derivative documents can represent hundreds of billions of dollars of exposure.
Problem: Critical legal and collateral information was locked in documents stored as PDFs. Up to 1,200 data points per Agreement are common. The problem presented was to understand this structured set of information and integrate it smoothly into the legacy infrastructure of a financial institution.
What we did: Multiple stakeholders were consulted to identify relevant data points. The document data was possible to extract and identify using a combination of algorithms and human review. A key success factor was to structure the data in a meaningful way and to create new networks of information to query, search and utilise the commercial benefit.
Results: The Legal team was able to establish and manage a project to supply data to downstream users. Risks were made more manageable by integrating economic terms, collateral information and legal risk from documentation (unstructured information) into databases (structured data).
Top Tip: the right approach to data IS a game-changer. But it so often goes wrong. This is definitely an area in which you should 'begin with the end in mind'.