How are the banking and legal sectors embracing Artificial Intelligence and document automation software?
Whether we like it or not, we are moving towards a more seamlessly automated era in both business and domestic life – with technology such as Amazon’s Echo “Alexa” already becoming part of daily routines. As Artificial Intelligence (AI) continues to shape and accelerate the way we handle information and process data, this advancement is also leading to an increase in business efficiency.
According to a recent study by Accenture, Artificial Intelligence has the potential to boost rates of profitability by US$14 trillion in gross value added (GVA) by 2035. In statistics published in the same report, the Financial Services industry alone can capitalise on AI technologies to “relieve workers from mundane, repetitive tasks such as generic customer queries and mortgage reviews” - benefitting from US$1.2 trillion in additional GVA by 2035.
When initially invented, there were fears that Artificial Intelligence could take complete control and dominate content production like the novel-writing machines in George Orwell's 1984. However, this technology is proving itself as a being game-changing, with an upturn in adoption of Artificial Intelligence demonstrating that any initial fears around have been effectively overcome.
Technological progression is nothing new and nothing to fear - ever since the industrial revolution of the late 1700s, the world has seen factory jobs replaced by robotics, typewriters replaced by PCs and many more examples of technological advances. It has often been assumed that roles held by humans are somewhat safe, protected and irreplaceable for tasks that are data, intellect and language-driven – such as the creation of contracts and other legal documentation. This is still true to a certain extent, but many barriers around logic are becoming overcome through smarter use of document automation.
Advanced productivity tools in the Artificial Intelligence landscape within the legal world have led to increased optimism and positivity, as technology now has the power to parse documents and sift through them in the search for relevant information to perform basic human tasks. This Artificial Intelligence technique is known as natural language processing and is used to scan, extract information and then accurately only predict information that is only relevant to certain legal cases or claims.
This positivity around data-rich business boosting Artificial Intelligence is backed up by legal giant, Baker McKenzie, who state that: “despite previous bouts of hype, a number of commentators believe that renewed interest in AI is justified. Continual and rapid advances in computing power, as well as dramatic declines in the cost of computing have led to an explosion in the amount and availability of data – all of which becomes fodder to optimise Artificial Intelligence algorithms.”
Trust in Artificial Intelligence driven technology has continued to develop over the past decade, with a number of multinational banks and law firms embracing this technology. Some of the world’s more innovative companies in these sectors have already rolled out automatic contract analysis and automatic document production tools. Data can now be routinely extracted and documents created quickly and in an error-free format – helping to achieve compliance and minimise risk.
Dana Remus, a professor at the University of North Carolina School of Law, and Frank Levy, a labor economist at the Massachusetts Institute of Technology, studied the main automation opportunities that are available to lawyers at large law firms. Their paper concluded that putting all new legal technology in place immediately would result in an estimated that technology could free up lawyers’ hours by 13%.
Their research also suggested that basic document review has already been outsourced or automated at large law firms, with only 4% of lawyers’ time now commonly spent on this task.
There are a number of software companies providing the pioneering technology to enable the integration of machine learning and automated document production and analysis – these include: Kira, Cognitiv+, eBrevia, Luminance and Leverton.
One of the world’s top ten law firms has recently rolled out an innovative example of using Kira and HotDocs together for a matter involving a client facing thousands of dispute-related claims. Kira automatically extracted information from an internally developed case management system, pushed key information to HotDocs which then generated the documents the client needed. The law firm’s innovation team found that the combination of technologies created an agile and complete solution by harmonising an approach of both Artificial Intelligence and document automation.
Another successful example of similar automation technology being harnessed includes MarginMatrix, a joint venture between Allen & Overy and Deloitte, which automatically drafts legal documents to help banks comply with new financial regulations. The tool reportedly cuts down the time taken to manually handle 10,000 contracts (on average that any major bank holds) from over 15 years in lawyer hours to just 12 weeks.
This automation and machine learning approach has also been rolled out at JPMorgan Chase & Co., to analyse financial deals. The COIN program, for Contract Intelligence, does the repetitive task of interpreting commercial-loan agreements that, until the project went online in June, consumed 360,000 hours of work each year by lawyers and loan officers. The software reviews documents in seconds, is less error-prone and never asks for annual leave.
Commercial banks and law firms are under more pressure than ever to “churn out” contracts, loan agreements and complex documents, which increases the risk of incorrect information and data errors. By using Artificial Intelligence and automatic generation of contracts and agreements, the difficulties in creating legal documentation are reduced and the rate of production increased dramatically.
The world is also constantly demanding delivery models that are cheaper, faster, better. Recent developments give us a lot to be positive about in the coming years to make this happen and we must realise that complete automation will not happen overnight. Blending existing practices in document automation with Artificial Intelligence will continue to reap rewards in efficiency. Co-existence is the best way forward and AI is not here to steal your job, well at least not for some time to come…
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"How are the banking and legal sectors embracing Artificial Intelligence and document automation software?" First published on Company Connecting January 2018