The International Swaps and Derivatives Association (ISDA) has announced that Ark 51, an artificial intelligence (AI) and data analytics service developed by legal services provider DRS, has used the Common Domain Model (CDM) to convert information from ISDA’s regulatory initial margin (IM) and variation margin (VM) credit support annexes (CSAs) into digital form.
Ark 51 is a contract and risk management system that uses AI to extract key data from legal agreements, including IM and VM CSAs. The CDM transforms that data into a machine-readable format that can be quickly and efficiently exported to other systems, cutting the resources associated with manual processing.
“The CDM is a brilliant concept that enables data to be transformed into a digital output – this aligns well with our Ark 51 platform, which extracts data from PDF documents. It is important to continue the community-driven effort to further develop the CDM and digitize documents for data analytics purposes,” said Paul Hands, CTO of DRS, in a statement.
DRS is the latest entity to adopt the CDM, a free-to-use data standard for financial products, trades and lifecycle events, to reduce the operational, liquidity and counterparty risks associated with key collateral management processes. As well as digitizing key elements of regulatory IM and VM CSAs, ISDA has demonstrated how the CDM could be applied to collateral representation, margin and settlement processes, margin call issuance and response messages, and cash collateral interest processing.
“We are delighted that Ark 51 has mapped its AI capabilities for IM and VM CSAs into CDM output. This will allow firms to better analyze CSA-related data, and the output can be used to streamline the onboarding of legacy documents to new technology platforms, increasing efficiencies and reducing operational risks within the collateral management ecosystem,” said Scott O’Malia, chief exec of ISDA, in a statement.