InsolvencAI

What does future technology mean for the Insolvency Industry?

For most people, the very mention of AI will produce visions of either Terminators fighting through the streets and offices of Los Angeles or Tom Cruise manipulating a virtual evidence board with haptic gloves in Minority Report to analyse images, video and other material that doesn’t physically exist. 

 

The reality is rather more prosaic but nonetheless exciting. You can see the first fruits of this next phase of the technological revolution every time you glance at your smartphone or tablet. 

 

Google Drive, Microsoft Onedrive and Dropbox are some of the most popular cloud computing solutions for huge amounts of personal and business data storage while Spotify, Netflix, Audible and Amazon Kindle use the same technology to bring a near infinite amount of entertainment in the form of music, podcasts, video and ebooks.  

 

Users can access YouTube, Twitch, Mixer, Anchor and many other publishing platforms with  free tools to create and distribute their own content. The top YouTubers regularly pull in millions more viewers than the most popular TV shows. 

 

Everybody benefits from these advances but what are the implications for business and specifically insolvency practitioners from the latest wave of the digital evolution? 

 

Along with cloud computing power, what benefits and challenges will artificial intelligence (AI), machine learning and augmented or virtual reality (AR/VR) technology bring to our industry?

 

Head to the Clouds

 

Capturing and converting huge amounts of raw data into easily understandable, user-friendly data like infographics or real-time charts to identify trends with a business would be highly advantageous. Various apps and analytics exist already to help dig down and manage this “big data” and are becoming ever more sophisticated. They could be a great help with business rescue and recovery strategies as well as providing vital information for assisting with disclosure and discovery investigations later. 

 

E-discovery of this kind is becoming more accepted within the industry and will soon be commonplace. Algorithms can parse and search masses of information very quickly and can increasingly understand context so can locate pertinent pieces of information and bring it to the Insolvency Practitioner’s attention. Systems can be cross referenced with existing legal and financial databases to identify precedent and correct practice so they can always make sure their actions and decisions are fully compliant and legal.

 

A sufficiently advanced AI could advise the insolvency practitioner what forms and documents are required, when they’re due and confirm that all legal and appropriate obligations and compliance have been met. This correspondence could all be created, sent, tracked and filed electronically for as long as required. 

 

Robson Scott 2.0

Robson Scott continuously seeks out new ways to increase our efficiency and improve our performance for clients and everyone else we deal with during the course of our business. 

 

Eamonn Wall, Robson Scott’s MD and chief driver of technology said: “Professional services is unrecognisable as an industry from 15 years ago, and that’s been driven mainly by technological changes and compliance. Robson Scott continues to invest in advancements that streamline the processes for our clients, and our back office”

 

Congratulations – you are the winning bidder

 

Disposing of assets for a fair market value to repay creditors can be time intensive for an insolvency practitioner but AI and technology can cut through the red tape. 

 

If some of the assets are hard to quantify and transfer such as intellectual property, patents, domains etc, specialist online commerce platforms and auctions can source appropriate buyers and be valued correctly. 

 

An Insolvency expert called Eddie Senatore gave a specific example in a recent LinkedIn article. He said: “The use of AI in the insolvency industry is obvious. Not just from managing day to day administrative matters but also compliance.

 

“Correlations on the length of external administrations with specific reference to asset types or creditor class and size or correlations between types of recoveries or litigation types, timing, costs and returns or perhaps dividend returns, adjusted for time value of money or rate of return on time invested.”

 

“AI could be used to undertake an analysis of insolvency firms and liquidators, the number of cases under their stewardship, average length of time, costs and returns. Over time the AI could assist in the allocation of appointments, independently based on administration type and liquidators’ current workloads.”

 

Ultron and Associates LLP

 

Technology opens up other new arenas for insolvency companies that haven’t existed previously if they are agile and visionary enough to take advantage of them. One example is the growth and ubiquity of voice activated digital assistants such as Google Assistant, Siri and Alexa. 

 

More and more questions are being asked of and answered by these AI’s with information coming from the web and directly from companies who recognise them as a growth area. There is no reason in future why insolvency expertise couldn’t be directly imported into the system as the technology makes it easier for companies and sole traders to seek insolvency advice from their assistant.  

 

Not that they would be able to dispense it but like many complex queries today, the assistant could provide a summary and snippets before providing the contact details of their friendly neighbourhood insolvency practitioner.  

 

Clients are increasingly using technological solutions as a first resort and some businesses are moving online entirely then it’s a logical step for the insolvency industry to follow and use those very same tools and solutions to stay connected and relevant in the digital marketplace. 

 

The sophistication and automation of processes continues apace. In the US,  apps such as Upsolve allow the full automation of personal insolvency and bankruptcy filing for individuals. 

It’s important to note that AI and other tools are not advanced enough to replace an experienced human insolvency practitioner nor do they have subroutines that replicate professional judgement or empathy and intuition. 

 

AI’s aren’t going to take over and become a digital judge and jury at this stage but in the hands of an expert insolvency practitioner can be an invaluable tool – literally augmenting our ability to continue to perform a great service.