AI Assistant for Contract Review under DORA Regulation

Berenberg, which is one of the oldest and one of the top privately owned banks in Europe, wanted to have a quicker and more authoritative method of assessing its ICT third-party service provider contracts to the necessities of the Digital Operational Resilience Act (DORA).

Challenge

A solution had to be found using AI to allow verifying hundreds of ICT contracts fast, automatically, and reliably. Nevertheless, to do so, a number of challenges were to be overcome:

• Complex contracts: IT and outsourcing contracts are usually full of specialised or ambiguous language.

• Time pressures: Legal departments had to spend too much time doing manual reviews which increased the cost and time to make decisions.

• Inherent risk of non-observance: There is the danger of not complying with DORA due to missing or mis-placed clauses that would expose the bank to regulatory measures.

• Several addenda: Often separate addenda are added to contracts which complicates the contract even more.

Business Needs

As DORA compliance is getting obligatory by January 2025, Berenberg required a solution that would:

• Automate review of contracts: The systematic detection of inconsistencies between contract conditions and the model that complies with the requirements of the DORA.

• Ensure alignment with DORA: Reduce the amount of time spent on manual review, maximize accuracy.

• Minimize expenses and inaccuracies: Process the critical parameters to construct and support the Register of Information required by DORA.

• Subsidize the Register of Information (ROI).

• Rapidly renegotiate the contract with ICT with ICT service provider by producing addenda proposals so that they can be more rapid in reaching an agreement on standard and custom terms.

Solution & Results

The system finishes reviews in minutes- by scanning rapidly Word, PDF, or scanned documents, which is an improvement of reviews by 70 %. Additionally, 80 % of the manual labor has been done away with, and legal and procurement departments have been enabled to concentrate on more valuable activities. 

In the validation phase, the team of Berenberg proved the accuracy of the identification and comparison of the elevant clauses were 90-95% and guaranteed stable and steady reviews. 

In order to fulfill the criteria of transparency as required by DORA, the pertinent parameters of the contract are automatically pulled out towards the required Register of Information (ROI) which streamline the currently existing compliance and reporting procedures. 

The system generated addenda automatically. much less time taken to negotiation on ICT contract. duration between 2-3 weeks and minutes. 

The user interface and the intuitive nature of the results presentation makes the process of reviewing the contract by AI assisted, allowing both the legal department and the procurement department to effectively evaluate contracts.