Norway’s Maritime & Merchant Bank (M&M Bank) is tapping into artificial intelligence (AI) to speed up its ship-finance operations.
The Henning Oldendorff-backed lender is teaming up with law firm Simonsen Vogt Wiig (SVW) and law tech company Hunit to test the use of smart legal contract (SLC) loan facility agreements.
This is a first for shipping through the use of distributed ledger technology and is expected to deliver reduced operational costs and improved risk management for banks.
The system will be based on contract terms developed by SVW and converted to SLCs using Hunit’s AI-powered tools.
M&M Bank’s clients will benefit from simplified processes, streamlined monitoring and improved contract fulfilment, the lender said.
Borrowers will use Hunit’s secure SLC web portal.
The pilot scheme will cover the submission, logging and approval of documentation, monitoring of interest rates and calculation of payments, post-closing reporting, covenant monitoring and more.
This eases the administrative burden and enhances risk control while incorporating innovative features such as continuous vessel location monitoring against the evolving global sanctions environment, the bank added.
Further finance pilots are planned using the same technology.
M&M Bank chief executive Halvor Sveen said: “As a specialised lender focused on the merchant marine sector, Maritime & Merchant Bank is able to make targeted use of important innovation to improve the services we offer our clients.
“We believe that smart legal contracts represent a transformative advance and look forward to introducing them into client services.”
Christine Rodsaether, a partner at SVW, said: “Many aspects of commercial lending have not changed in decades, despite serving an increasingly digital global economy.
“We see smart legal contracts as a product that we gladly offer as an amendment to our legal expertise in order to meet the needs of our clients.
“As a client-focused law firm, we need to integrate and fit into the client’s legal process.”
M&M started its operations in 2017 and has since financed about 160 vessels to the tune of nearly $1bn.
Lending is secured by first-priority mortgages on ships.
German shipowner Oldendorff and Norwegian investor Endre Rosjo each own 25% of the bank.
