27 Feb 2018 | 09:11 am | 2 min. read
Project uses NLP and AI to save hundreds of hours of manual processing time
International law firm Pinsent Masons has advised ING and Commonwealth Bank of Australia (CBA) on the successful completion of a pilot RegTech program to simplify the processing of information and the implementation of the Markets in Financial Instruments Directive II (MiFID II).
The project, completed in partnership with RegTech provider Ascent Technologies, used Natural Language Processing (NLP) and Artificial Intelligence (AI) to interpret and convert 1.5 million paragraphs worth of copy from the Directive into a series of bitesize, actionable tasks appropriate for each firm.
Using Ascent’s intelligent technology, the banks were able to quickly identify items in the regulation that could be reviewed and actioned, saving hundreds of hours of manual processing.
The Financial Conduct Authority (FCA) – which understands the benefits of industry collaboration where there is no competitive advantage, such as compliance – observed the project. It also gave the FCA greater understanding of some of the potential applications of RegTech, NLP and AI, and how these technologies can help reduce the financial burden on firms that often comes with being more compliant.
Luke Scanlon, Head of Fintech Propositions, at Pinsent Masons, said, “We see great potential for RegTech solutions to assist regulated businesses in making their approach to remediation more efficient and effective over the long-term. From a legal adviser’s perspective, it means that more time and resource can be spent on helping clients develop regulatory strategy and understand the impact of, and opportunities to be gained from, regulation on their businesses.”
Ian Hollowbread, Director, Enterprise Office, ING UK said, “We are proud to have taken part in this pilot that brings major industry players, regulators and new technologies together, to explore solutions to challenges we all face today. We have seen a number of barriers to RegTech adoption, but also see its massive potential. Only by uniting the industry, RegTech and regulators, can we begin to bridge the gap between technological potential and the cost of becoming regulatory compliant.”
Supun King-Jayawardana, Head of London Innovation Lab, Commonwealth Bank of Australia (CBA), said, “RegTech is an exciting space. This pilot provides us with the opportunity to test the latest technologies against complex industry regulation. When RegTech meets financial services, we create an opportunity for banks and start-ups to collaborate and solve industry challenges. By working together, banks can share best practice in due diligence, experimentation costs, business knowledge and resources.”
Brian Clark, CEO & Co-Founder at Ascent Technologies Inc, said, “This pilot demonstrates the power of RegTech, and we’re pleased that our solutions proved effective at automating and enhancing MiFID II compliance processes. Ascent uses NLP and AI to help transform complex regulatory data into actionable knowledge. By automating their compliance processes with Ascent's first-of-its-kind technology, users can save significant time and money while reducing their regulatory risk. We were proud to work with ING, CBA, FCA and Pinsent Masons on this project and look forward to continued collaboration.”
Pinsent Masons has a significant reputation for innovation in the legal market and is focused on providing solutions to the business-critical challenges that our clients face – this often means moving beyond the boundaries of core legal advice. The firm has invested significantly in re-engineering how legal services are delivered – that includes developing and investing in alternative delivery models and services. Pinsent Masons has developed and deployed its own AI platform, TermFrame, which extracts, reviews and analyses key contract risks, and provide actionable risk reports. (www.innovative.legal/solutions/bringing-artificial-intelligence-to-life/).
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