Deloitte has partnered with Recommind, a information intelligence provider, to deliver a managed service to investment banks for over-the-counter (OTC) International Swaps and Derivatives Association (Isda) agreements.

The offering is a SaaS platform which handles the process of sifting through thousands of counterparty agreements to identify the data traders need to drive profits, including eligible collateral, interest rates, termination events, netting, thresholds and independent amounts.

“The notional amounts outstanding of OTC derivatives stood at over $690bn at the end of 2014. Supporting this are countless contracts and millions of data points, which until now have largely been handled manually by large teams within organisations. That process is not only time intensive but the margin for error is huge," said Bob Tennant, CEO, Recommind.

"We launched Perceptiv Derivatives Contract Analysis, a sophisticated machine learning technology, to reduce manual processes, improve regulatory compliance and reduce costly human error.”  

The product will consist of a Deloitte service wrapping around Recommind’s Perceptiv Derivatives Contract Analysis technology. The partnership aims to offer investment banks  a combined managed service of technology and consulting.

Regulations such as Dodd-Frank, Emir and Basel III require investment banks to have a much more granular view of their data. This requires a change in the way information is managed within large financial institutions, says Katelyn Brown, partner at Deloitte MCS. 

“OTC derivatives contracts in particular are made up of hundreds of data points. Errors that creep in during manual processes not only lead to regulatory headaches but also substantial financial losses," said Brown.

"Working with Recommind will allow us to improve the way our customers’ OTC Derivatives Contracts are managed, speeding up the process and eliminating human error to optimise profit and mitigate risk.”