With the upcoming deadline for transitioning from interbank offered rate (IBOR) to new risk-free rates (RFR), now is the time to develop a transition plan for your IBOR-related products and financial instruments and get the support you need to execute it.
RGP offers wide-ranging Financial Services expertise and can help you accelerate your IBOR migration to meet the 2021 year-end deadline without interrupting the business. We use data-driven insights powered by our human-first approach to maximize efficiencies and deploy cohesive business processes and AI-enabled applications to deliver successful IBOR transitions.
Our team offers extensive IBOR expertise and includes certified program and project managers, ex-regulators, and legal, risk, controls and regulatory reporting advisors who bring a “sleeves up” approach to execution. Simply put, we enable expedited IBOR change while reducing costs and helping create sustainability.
In our experience with IBOR transition and other significant risk and regulatory initiatives, it’s important to balance business-as-usual activity with “keeping the lights on,” while you make needed changes to the operating environment. Emerging risks we see as the 2021 IBOR deadline approaches include:
- More than $200 trillion in assets associated with IBOR-linked contracts and 20% are set to expire after 2021 with varying fallback language and record-keeping dispersed across organizations.
- There’s continued uncertainty across various countries’ jurisdictions due to limited provision of regulatory guidelines, unclear market consensus and lack of standardization.
- With the potential for transitioning to one or more rates (SOFR, SONIA, ARR, etc.) with variable timing, market volatility and liquidity risk will likely increase.
- Existing operating models have significant impacts across processes and documentation in both legacy and new business covering:
- Legal and client contracts
- Client outreach and communications
- Business operations and technology
- Finance and accounting
- Regulatory and management reporting and analytics
- Managing the IBOR transition can be costly and laborious, especially when you’re addressing IBOR-related changes across your organization with limited human capacity to dedicate to the initiative.
We provide strategic, program and technical advisory solutions to help you anticipate risk, manage, and accelerate your IBOR initiative while delivering successful outcomes. Our subject matter experts can act as an extension of your team(s) and/or partner with you to mitigate risk and reduce operating expense with intelligent automation, tailor-made for the IBOR transition. Our IBOR services include:
- IBOR Transition Diagnostic: Execute IBOR transition in-flight review/audit to evaluate whether the existing approach has major risks or gaps and identify opportunities to optimize the initiative.
- IBOR Transition Management and Client Engagement:
- Digital Transition Management Office: Our LaunchPM digital-in-a-box solution provides governance tracking and real-time reporting on your IBOR transition spend, progress, issues, dependencies, and quality completion, and facilitates communications and operational readiness.
- Business Analytics and Insight: We use human-powered functional analysis of risk impact as regulatory guidelines evolve, providing insights to guide your business decisions and execution.
- IBOR Transition Client Engagement: We provide change management, education, and training to support your team’s execution of a structured approach to the IBOR transition and successful client engagement.
- Conduct Risk Management Framework: Augment the existing risk management framework and address conducts risks relating to the IBOR transition.
- IBOR Intelligent Contract Repapering Automation in Partnership with e.IQ platform:
- Process Intelligence: Pre-defined and adjustable IBOR process templates accelerate “re-papering” exercise, process modification and anytime APIs ecosystem integration. This highly scalable and cost-efficient platform can support processing of more than one million contracts in 12 months.
- Workflow Automation: Flexible and dynamic business rules help you control the business operations flow and align with evolving business processes.
- Machine Learning & AI: AI-based automation is configurable and dynamic for key terms extraction and legal clause comprehension using NLP. It also provides Next-Gen IBOR metadata definition, contract data analysis and machine learning, using pattern recognition and highly scalable complex algorithms from a pre-defined data library.
Wondering where to start? Here are three important questions you should be answering today. We’re ready to help.