I wonder how many Contract Analysis vendors use their own software to help run their business?  At Logical Construct we do.

What started as specialist software for digitising collateral agreements and managing counterparty contract risk is also used by us internally for supplier contract lifecycle management and ensuring we effectively manage our ISO certification and policy adherence.  

Starting with solving the most complicated challenges and later adding support for the typical contract analysis needs is far easier than going the other way. Imagine taking some generic software for managing the (relatively) simple challenge of analysing supplier contracts and trying to use it to deal with Umbrella contract structures and multi-layered collateral!

Logical Construct continue to invest in improving their software to meet the ever growing contract data analysis and management needs and we’re pleased to be drinking our own champagne to prove how much we believe in what we’re creating for our customers.

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In his recently published paper The Coming AI Hackers, Security guru Bruce Schneier takes a look at how artificial intelligence will be applied to hacking. This means hacking everything from IT systems to economic, social and political systems – and how AI systems will first be used to hack us, and then will themselves become the hackers. The full paper is around 50 pages long but is very readable (and well worth the time). Given the work going on at the moment to develop standards that could lead to ‘smart’ derivatives contracts (containing executable code), some of the examples he gives in the paper seem relevant.

We’re asked to imagine feeding national or even global tax laws into an AI system. The tax law consists of formulas for calculation of the tax due, but there is often ambiguity and this makes codification problematic – giving us a basic level of defence against the AI systems (and, as he comments in the paper, guaranteeing that “there will be full employment for tax lawyers for the foreseeable future”!). 

However, when applied to areas where the rules are “designed to be algorithmically tractable” (he gives the example of the financial system), providing the AI system with all the relevant information and giving it a goal of “maximum profit legally” will result in new hacks, some of which are likely to be beyond human comprehension – we won’t even realise they are happening.

This might sound like science fiction, but with rapidly advancing technology it could become a reality “within the next decade”. The regulators and policy makers responsible for mitigating systemic risk to the financial system certainly won’t be short of work either.

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