CEO and Founder of Robin AI, Richard Robinson, details AI’s capabilities to revolutionize credit lending processes
In short, speed. We want law to move at the same pace as business, and AI can make that happen. People have the impression that companies are attracted to AI because of its cost efficiency, but in truth, it’s speed that’s motivating people to explore this new technology. Credit specialists operate in a fast-paced environment. If you want to be in the deal, you must move quickly, and AI can be an invaluable asset.
They’re huge. DDQ processes have gone from taking weeks to taking seconds. AI can significantly accelerate DDQ completion by looking at historic questions and retrieving relevant information from across a whole suite of documentation. These advances have been driven by the recent progress in language learning models (LLMs). LLMs can provide human-like levels of accuracy, so speed doesn’t come at the cost of quality. The more knowledge it has, the more accurate the product. Once given the language for alternative assets and credit lending, AI can offer the same high-quality information-gathering that lawyers do.
In the closing stages of a fund, AI can be more comprehensive than typical office systems. Previously, firms were managing documents in spreadsheets, pouring through 100-page side letters, LP agreements, and complex obligations. AI is cheaper, much faster, and eases workflow. Before Excel, accountants had to do calculations by hand. The rise of AI will be a comparable transformation for unstructured text-based data. By synthesizing large amounts of documentation, AI will quickly have a similar impact on the legal industry as Excel did on accounting.
Transitioning companies into this new form of workflow will be an obstacle, particularly with concerns around data security and privacy. It can be difficult to get companies to buy into a new way of working, but AI has transformative potential. It’s important for software vendors to give clients the confidence and comfort that their data is secure. That said, regulatory intervention will also be a hurdle. As a society, we tend to be bigger advocates for regulation than innovation. I’m hopeful that the potential of these technologies will outweigh the downsides, and confident that regulatory concerns won’t stop this wave of innovation.
In this respect, credit lending isn’t unique. Every domain with a lot of transactional documentation will see a massive acceleration in the use of AI. We’re already in conversations about AI gaining the language capabilities to translate documents or help firms understand legal nuances in different jurisdictions. As these systems’ legal and reasoning knowledge improves, deal transactions won’t require hiring a law firm or even speaking with a lawyer. AI’s legal capabilities are catalyzing advancements in credit lending, and the future is limitless.
About
Richard Robinson is the CEO of Robin AI, a leader in legal AI for private markets. Richard is a corporate lawyer turned entrepreneur who previously worked at global law firms like Clifford Chance. Built in partnership with Anthropic, Robin AI combines LLMs with proprietary machine learning models, data, and deep legal expertise to transform the way that private capital firms handle their contracts and obligations. The secure technology is trusted by market leaders to manage confidential documents like side letters to help mitigate risk, improve investor relations, and reduce administrative burden.
This article originally appeared in Private Debt Q1 2024: Preqin Quarterly Update. The opinions and facts included in the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin and Robin AI accept no liability for any decisions taken in relation to the above.