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Kill the paper trail: finance document startup could save banks 50% on drafting negotiations

By FinBuzz

logo-FINBUZZThe fast-track cloud-based negotiations and documents startup ClauseMatch is one of the 15 FinTech startups selected to take part in Accenture’s 2016 FinTech Innovation Lab in London, reports FinBuzz.

ClauseMatch is a platform that helps streamline the workflow of documentation providing real-time editing, approvals and tracking in trade agreements for derivatives and commodities. ClauseMatch founders claim if ClauseMatch is implemented into the workflow of banks, it can bring the process of signing contracts to a whole new level, and even reduce costs by 50%.

The lab itself, launched by Accenture in 2012, is a collaboration between Accenture and 16 leading financial institutions, including Barclays, Citi, Goldman Sachs, HSBC and JPMorgan.

Common issues

Large organizations are constantly facing the same problems: agreements are forgotten, documents are lost, the people in charge vanish, ideas are bogged down in routine, bits of information are constantly being lost and searching correspondence takes longer than the actual work itself.

Those dealing with contracts, policies, and other documentation on a daily basis understand the current ineffective operational controls, unstructured data systems, and inability to respond to economic and regulatory events across various industries.

Large banks are no exception. It would seem that in the 21st-century internal communication within banks — the richest companies in the world (ICBC, China Construction Bank, JP Morgan Chase, Agricultural Bank of China, Bank of China, Wells Fargo among the top ten) — would be brought to a level of perfection. But in practice, when it comes to drawing up multi-million dollar contracts, bank employees begin to send drafts of word format documents to each other and individual employees contribute edits. As a result, often there are several versions of the same document, sometimes certified by the same people.

Word by word

ClauseMatch was created by a group of finance industry veterans, lawyers (including from Morgan Stanley), accountants and technical people who bring familiar interfaces and collaboration features from modern web applications and combine them with a granular approach to data management and extraction within documents. They created a single-platform solution for document authoring, templates, approvals, commenting, data points extraction, and fully digital and structured storage. Pre- and post-trade document lifecycles and data analytics are significantly improved.

Speaking in detail, the main participants of editing via ClauseMatch platform have complete control over who does what in the document: they see who is working on which paragraph, who makes which changes, can assign tasks, and much more. People can be added and excluded from editing. This means that different people can work on a document at the same time: each employee has clearly marked points that he has to look at. This effective real-time editorial sharing system cuts down on copies of the final version of the document, and also saves a whole history of the edits, where any changes can be turned on and off, before the final version.

It is also often the case when the contract is agreed and signed, but people change or just forget about it and nothing happens, however payments need to be made, etc. That is why ClauseMatch team created a convenient system for monitoring and searching for contracts and other documents.

But the main “trick” of the ClauseMatch system is statistics. The platform indicates how many contracts are ready, how many are left for review, how much time each person has spent on his part, who had a look and who didn’t, what time of the day each employee has a peak activity, etc. The next step is to implement electronic signatures.

Adapting technology 

In July 2015 ClauseMatch acquired ISO 27001 and ISO 9001 (internationally recognised best practise framework for an information security management system) as a part of the company’s ongoing mission to improve security and operational standards. In June 2014 ClauseMatch was among 11 Fintech startups, selected among 300 projects from 50 countries who have started to work in the Barclays startup accelerator. The team also won the global competition BBVA Open Talent Challenge, which is an annual Spanish bank BBVA run. ClauseMatch is still working with the BBVA on the introduction and development of its technology.

“Fintech startups accepted into these projects are chosen by banks themselves,” the ClauseMatch team told FinBuzz. “This means that the banks see direct application of technology we are working on for their selected projects. In addition, we are also negotiating with other banks and have already started working with four of them. As for the security, we have to add, that nowadays cloud technology is more safe than the one banks have, because companies like Google, who provide it, have a team who repels hacker attacks in real time, however banks mainly see the indications of the attack after it occurred.”

This story first appeared in FinBuzz.

Photo: Quinn Dombrowski

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