How a large bank saved thousands of hours
of manual labor by automating credit agreement analysis
Customer
International bank exploring ways to improve efficiencies through automation
Goal
Improve credit risk assessment by automating the classification and interpretation of covenants
Challenges
- Wholesale credit agreements are complex, 100+-page-documents that are very bespoke
- Especially covenants use highly specific, use-case related formulations
- Some extraction types require fine-grained distinctions between options or covenants (e.g. redeem deal options, termination options) – the automation system needs to comprehend domain logic based on document structure and relations of extracted items
- Pricing-related tables contain many different parameters that are extremely difficult for automation systems to process accurately
- For all these reasons, the review of credit agreements was still done manually, which cost a lot of time and money to the bank, not mentioning the high error rate of such a mundane task
Solution
Leveraging the meaning-based capabilities of SemanticPro to extract key information from credit agreements and automate the classification of covenants, a pilot solution was built that can automatically:
- Extract key information from different types of credit documents such as loan agreements, notes, amendments, credit approved memorandums, etc.
- Classify covenants
- Cluster related documents to create a complete transaction overview
- Identify the covenant types and assess credit risk
Results
- Thousands of hours saved on manual review: the covenant structure can be extracted from loan agreements at the press of a button
- Significant reduction of operational risks through better insights about the credit portfolio
- Extracted information facilitates workflow prediction and capital allocation for different business lines
The Cortical.io Difference
- Short time to results: only a few days to setup the system and a small set of examples to train the system to the specific language used in the documents
- Highly accurate results for complex extractions and classifications
- Easy integration into the bank’s wholesale loan software
