Taking the Pain Out of Regulatory Review: A Practitioner’s Perspective

Regulatory review projects can be a nightmare for the regulated bodies having to undertake them, and a significant challenge for the individuals within businesses tasked with supporting them. But with Seal Software, there is a new approach to eliminate the pain and disruption.

By way of introduction, I recently joined Seal as a legal services director, advising our clients in their contract review processes. This blog post helps explain why I did.

With a background in both law and project management, I find myself ideally suited to assist large Financial Services institutions in locating, cataloguing and reviewing their contract portfolios within large regulatory review projects. Such projects are caused by the forever changing regulatory landscape that directly impacts these types of organizations, such as BRRD article 55, QFC reporting, SR 14-1 and Living Wills for the global SIFI banks, Vendor Compliance, and many others.

The main challenges such projects present to these organizations are fourfold:

  1. Do we know how many contracts we have?
  2. Do we know where they are?
  3. Do we know how many of them are relevant to the regulatory issue under review?
  4. Finally, how many of these will require some action (such as repapering, renegotiating, notifications, etc.).

These challenges can get much worse the older an organization is, or the more it has grown over time — especially if it has done so via mergers and acquisitions.

Rarely are these types of projects popular. Often the organization has vaults full of forgotten hard copy files usually in the basement and in poorly-managed digital file management systems. The reviewers often must go through the onerous process of “anecdotal knowledge harvesting,” that is, interrogating any current colleagues who may have been involved with the contracts in the first place. Rarely is that straightforward and reviewers find themselves moving from department to department, desperately trying to get the full picture of the organization’s contractual landscape.

But no number of meetings, interrogations, and enquiries will save these projects from going through the immensely time and resource consuming task of having to individually review vast volumes of documents. These include many that are (a) not contracts at all, (b) not relevant to the regulatory issue in hand, or (c) already fully compliant. To do this, most organizations engage law firms or LPOs (Legal Processing Outsourcers) to provide the necessary personnel, as they cannot take sufficiently trained staff — in high enough numbers — off their day jobs to handle this time-consuming work.

Well, to be quite honest, when I was a contractor on these kinds of projects (… and being paid by the hour or day), this was a great situation. Protracted and slow moving projects with plenty of logistical challenges equated to healthy and lengthy income streams!

But, as time went by, my perception began to shift. It became tiresome and monotonous to chase people to locate relevant document caches and then to sift through the, quite often irrelevant, document sets. Also, I sensed the inefficiency to the companies I was working for, and the massive burden it was to the people I was working closely with, adding to their already heavy workloads. Add to this the factor of looming regulatory compliance deadlines and associated penalties for not meeting them, it is easy to see just how painful this is.

But it doesn’t have to be this way. As I spent more time on these projects, it became clear the key to making these projects less onerous and more efficient lay in software.

Now, don’t get me wrong, every organization carrying out these regulatory review projects today is employing software to some extent, if only at least to capture, categorize, and structure their findings, and they all have at least some form of digital document retention system. Such systems, however, do not save you from having to review each document individually, and from sifting through mountains of data searching for the right contracts and hoping that none of them have been accidentally labelled incorrectly or have been filed digitally in the wrong directory or repository.

This is where Seal Software makes a real difference. It was the firm belief that there was a better way of doing it that made me want to join the team at Seal. It was the excitement I felt — from the perspective of an end user — that made me want to be part of that difference. I kept thinking when watching the demonstrations on Seal’s YouTube videos how much I could have benefited from Seal in those various projects I’d worked on.

With Seal Contract Discovery there’s no more need for “anecdotal knowledge harvesting.” Just point the software at all your shared drives and data repositories and it will find and identify all your contracts in your system. It converts them into fully searchable PDFs (even those crooked and old hard copy scans), and extracts and indexes the data within those contracts using many pre-defined extraction policies. This makes the data easy to search, sort, and analyse, allowing you to instantly identify those contracts that are relevant to your review project and their relevant information at your fingertips.

Seal Contract Analytics allows you to find specific terms and language that are unique to your organization. This can be for a regulatory review project or any other business need or event. Users can create custom extraction policies, and train the system to extract the data they are looking for. This helps by allowing you to more clearly define your relevant data sets, and by identifying clauses and contracts that may be already compliant and don’t need attention.

Not being an IT expert by any stretch, the terms “artificial intelligence” and “machine learning” were a little daunting at first. But these terms, and the clever technology they represent are what’s inside the software, just like the engine of a powerful, yet easy to drive modern sports sedan. You don’t need to know how the engine operates, just what the primary set of switches and controls do. Seal Analytics is the same, and is designed for the business user, not a highly-trained legal professional or data scientist. It’s as easy to navigate and to learn as any Microsoft Office product. After just a couple of weeks, I am very comfortable and building my own extraction policies.

From my practitioner’s perspective, Seal Software is exactly the technology that regulatory review projects have desperately needed of all these years. The solution dramatically reduces the time, cost, and disruption on the organizations having to undertake them. It even improves morale and employee engagement, removing the need to painfully dig in haystacks for needles. Personally, I am thrilled to now be helping organizations improve their contract review processes, instead of billing them for the excessive time it used to take before Seal Software.