Legal Data and Financial Markets

Date: 29 August 2019
Author: Shaun Murray

As the technological evolution rumbles on, legal and technology firms have started to decipher client needs around legal data. A number of providers have created solutions and are competing in a market where legal data, and how it is used for margin and collateral purposes is undervalued.

First movers are initially trying to solve regulatory issues with the additional requirement that the ecosystem needs to evolve, and evolve quickly. Users are advocating for market infrastructure that is scalable, practical and accessible for all. The outstanding question is whether the market is ready to work together in a collaborative fashion to realise the secondary benefits that such an approach would bring.

The impact of legal data on pricing, capital, settlement fails, dispute management and processing efficiency is inextricably linked to cost management. Understanding the failure points for each technological disruptor is critical in building the consensus that is required to accelerate the direction of travel and bring the selling point to a quick conclusion.

Legal agreements for derivatives and securities financing have substantively evolved in the last four years while the technology to support and improve the negotiation process, the time and effort required has not. We are at a crossroads, the next 12 months will be critical as suppliers jockey with clients to win business.

Is this the right approach though, can there be more than one winner? There can and there should, with the caveat that connectivity must exist if barriers are to be broken and technology is moved to the bosom of legal as a friend rather than a foe.

With the right solution, institutions will, for the first time optimise their business based on AI reading their legal data alongside the trade, pricing and market data that has already been harnessed.

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