Importance of Contract Lifecycle Management (CLM) in the Finance Industry

contract management (clm) for finance industry

How To Streamline And Automate Financial Workflows Using Contract Lifecycle Management (CLM)

CLM or Contract Lifecycle Management is a tool for financial institutions to create and implement smart, well-ordered, and dynamic management systems for contract workflows. AI-powered contract management, in particular, offers a centralized automated process to create, execute, modify, and store contracts pertaining to the institutions’ business processes. 

Implementing a smart contract management system into their workflow can aid financial institutions to adopt efficiency, speed, and convenience to the process. 

What is CLM?

CLM or Contract Lifecycle Management is an intelligent contract management software that automates various types of business contract agreements. It offers an automated process that manages the lifecycle of contracts/agreements that fall under a business. 

CLM spans all the different processes associated with the lifecycle of a contract, right from its initiation through negotiation, validation, obligation management, amending, auditing, reporting, and subsequent archiving. 

Contract Management Challenges in the Financial Sector 

  • Tracking & version control: Hundreds of thousands of finance contracts need to be constantly updated/amended during their lifecycle. Such requirements may arise due to instances such as changes to regulatory obligations, deletion of irrelevant provisions, replacement of clauses, etc.
  • Lack of visibility: Due to the non-existence of a centralized, digital storage solution, there are chances of poor contract visibility across the departments of the organization.
  • Poor contract access: All-time availability of records from different geographies is poor due to the lack of a digitized contract storage system. This can lead to flexibility and adaptability challenges. 
  • Security risks: High-risk pertaining to the security of the customers’ and the business’ sensitive data. 
  • High TAT & low predictability: The potential time delays that come along with physical contract management add unpredictability to the business process. 

CLM: A Smart Solution For Efficient Contract Management 

By using all-in-one smart CLM systems, financial institutions can effectively manage their contract and agreement workflows. The entire process becomes quick and efficient, thanks to the automated system that manages contract lifecycles. CLM aids in reducing risks along with providing a more advanced compliance management framework. 

Contract lifecycle management systems enable financial institutions to automate their contracts, spanning from creation to archival. Business document management becomes hassle-free, efficient, and quick with the presence of smart CLM. 

Contract Lifecycle Management Process Flow

contract management (clm) for finance industry

  1. The business requests a fresh contract that can be easily created and drafted using readily available templates. 
  2. The parties are allowed to negotiate the clauses based on business requirements through digital collaboration. The real-time collaboration and commenting feature offered by smart contract management software providers such as SignDesk can help businesses approve their contract workflow faster. 
  3. Digital document signing and stamping facilities provided with the CLM software enable users to quickly and conveniently execute business agreements with eSignatures.
  4. A central digital repository offered by the CLM provider helps businesses securely store their contracts. They are easy to retrieve, making the entire contract management process quick and efficient. 
  5. Contract performance is tracked using smart contract analytics to offer executives key insights for decision making
  6. Features such as renewal and expiry notifications can help enterprises manage their contracts hassle-free.
  7. The business’s profile is created on the CLM software to make the entire process seamless and easy to access. 

How Can Finance Institutions Utilize CLM to Expedite Their Contract Workflows?

  • An AI-based solution can pave the way for the efficient management of financial services contracts. The system can ensure finance firms never miss any contract commitment by effectively maintaining contract timelines.
  • This in turn can avoid these institutions from being penalized due to missed or delayed timelines. 
  • Financial enterprises can stay up-to-date on the changing requirements by effortlessly modifying clauses in order to make the business financially beneficial.
  • Reminders and alerts provided by the finance contract management software can help these institutions stay on top of price changes and payments. 
  • Financial companies can expect increased legal compliance in their contracts. This is possible due to the use of a common contract drafting and managing tool combined with consistent terms and conditions throughout the contracts. 
  • Businesses can have better control over risk recognition issues with the help of an automated contract management process. 

CLM For Finance – The Bottom Line

The use of smart contracting in financial services can offer many benefits across the various departments of the organization. It allows them to collaborate seamlessly while drafting or negotiating contracts, adding efficiency and speed to the process. In addition, using automation in contract management facilitates quick searches and retrievals, along with offering clear organization of the plethora of documents concerning the institution. 

Finance firms can make use of AI-powered CLM software services offered by SignDesk to accelerate their contract administration. The robust security feature offered by such tools can ensure data confidentiality which is essential for the financial industry.

Contact one of our sales professionals to learn more about how our contract lifecycle management works.

Get a free trial now!

Leave a Comment

Your email address will not be published. Required fields are marked *