Financial institutions manage constant risk, but key financial and compliance details in contracts often go unseen. Contract intelligence helps surface these insights for better decisions.
When Silicon Valley Bank (SVB) collapsed in March 2023, many companies discovered that clauses in their contracts restricted them from diversifying their banking relationships. These limitations left them vulnerable, unable to move funds or establish new banking partnerships when they needed liquidity the most.
SVB wasn’t an isolated case—it was a wake-up call. Financial institutions operate in an increasingly complex risk environment, navigating economic shifts, regulatory changes, and operational disruptions. Yet, as the SVB crisis revealed, many organizations lack full visibility into the agreements that define their financial commitments and safeguards.
Contracts play a critical role in shaping financial stability, but without real-time insight into their terms, finance teams may miss risks that impact liquidity, compliance, and long-term strategy.
Contracts contain key financial commitments, from payment obligations to termination clauses, that can directly affect a bank’s balance sheet. Without a way to quickly surface these details, organizations risk missed cost-saving opportunities or unexpected liabilities.
Contracts contain critical financial insights, yet too often, this information is only surfaced when issues arise.
The financial sector operates under constant regulatory scrutiny. Ensuring compliance requires more than occasional contract reviews—it demands instant access to key regulatory clauses across agreements.
For example, an article originally published on Nasdaq, "Managing Risk for Financial Institutions With Contract Intelligence," highlighted how contract limitations can complicate bank acquisitions and regulatory interventions:
"Although the bridge bank is authorized to receive the existing vendor contracts the banks held, that doesn’t apply to contracts that contain limits on transfer.”
When regulations shift or financial disruptions occur, institutions need immediate insight into contract terms that could affect business continuity.
Jake Sussman, senior director of product management at Workday and former chief operating officer and founder at Evisort, also emphasized the importance of accessible contract data for compliance and risk management:
“[Finance professionals] must leverage contract data at both an aggregate and granular level to build more effective risk management strategies and remain compliant with internal policies and external regulation.”
Contracts don’t just define financial transactions—they shape relationships with vendors, partners, and customers. Without visibility into contractual obligations, organizations may face:
Operational disruptions due to overlooked restrictions
Reputational damage from non-compliance or contract disputes
Financial loss from clauses that limit flexibility or response time
The collapse of SVB serves as a cautionary tale of what happens when contractual limitations are not fully understood. Many companies only realized too late that their contracts restricted them from accessing alternative banking partners, leaving them exposed to significant financial instability.
Risk management in financial services has always been essential, but today’s challenges demand a more proactive, data-driven strategy.
Financial institutions that embrace contract intelligence can strengthen compliance, improve forecasting, and make more informed decisions.
Contracts contain critical financial insights, yet too often this information is only surfaced when issues arise. Financial institutions that embrace contract intelligence can strengthen compliance, improve forecasting, and make more informed decisions, leading to greater financial stability and resilience.
As the Nasdaq article emphasizes:
“It is imperative to have easy, searchable access to these contracts in order to ensure organizations are following specific requirements of both domestic and foreign regulatory laws on an as-needed basis.”
The financial institutions that embrace this shift, leveraging contract data as a strategic asset, will be better positioned to navigate uncertainty and drive long-term success.
Learn more about the power of Workday Contract Intelligence.
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