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Maximize transaction integrity in Structured Finance with our new Data Validation

The lack of integrity in ABF transactions can have severe repercussions, from legal and regulatory issues to reputational damages and financial losses. Therefore, it is important to implement robust controls and governance mechanisms to mitigate these risks. This is where Cardo AI’s Data Validation comes in to help. 

What’s in it for you?

  • Gain more success in building strong relationships with investors. Swift action for loan originators means faster funding for your clients.
  • Respond to regulatory requirements far faster and more accurately, safeguarding against reputational damage and financial penalties.
  • From days to seconds. Slash your report verification time and reduce operational costs.
  • Enhance your data intelligence across all investment strategies and leverage data from ABL transactions. 

Why does it matter?

From calculating borrowing bases to managing cash flow waterfalls, every decision in today’s ABF landscape depends on the reliability of your data. Consider the volume of data involved: calculating available draw amounts, monitoring performance triggers, and activating contractual protections—all require an understanding beyond basic error detection. While data health checks offer a valuable first line of defense, they often fall short in the face of ABF’s complexities. Investing in Data Validation is an investment in confidence and efficiency. 

How does it work?

Cardo AI has introduced a two-step control process to guarantee the highest standards of data quality:

Step 1 – Data Health Check It meticulously reviews each dataset to ensure compliance with specific transaction contracts. By identifying and rectifying discrepancies early, DHC helps maintain seamless transaction flows and supports consistent data reliability.

Step 2: Data Validation Checks It delves deeper, focusing on data consistency over time. It scrutinizes changes from one period to the next, confirming their validity. Leveraging a vast library of use cases, this step ensures continuous data integrity. Advanced Data Validation: Ensure accuracy and consistency in data processing through comprehensive validation algorithms. Our data validation process includes three components:

  • Asset Level Reconciliation – Our platform independently predicts asset values at the start of each period, aligning them with received data. This includes recalculating outstanding balances, assessing days in arrears and performance status, and verifying cash flows and interest payments for accuracy.
  • Consistency Checks – Cardo AI’s system detects adjustments in reported data, including changes to anticipated cash flows. This ranges from simple date inconsistencies to deliberate alterations affecting asset performance or borrower concessions.
  •  Portfolio Level Reconciliation – Cardo AI extends validation beyond individual assets to the portfolio level. This includes reconciling portfolio changes over time and matching reported cash flows with actual bank balances. Our approach directly compares with live bank data, preventing costly errors or delays in reporting and payments often missed in standard health checks.

What happens with Mismatches? Every time a mismatch is identified, we not only pinpoint it but also offer a clear explanation for its possible cause, ensuring users can directly review all the affected data. These mismatches can be quickly handled through a streamlined workflow. This includes notifying the data provider of the discrepancy and solving the issue by overriding the data. Cardo AI makes it easy for any data provider to access our platform. This means the entire data management process—from syncing and checks to fixing any issues—can be carried out independently.

Cardo AI's data validation feature visualized inside our structured finance platform

Use case 1

Our client, a dynamic asset manager, is revolutionizing the way real estate instant buyers secure funding through an innovative asset-based facility. They were struggling with Excel calculations and time intensive verification processes. Cardo AI Data Validation has streamlined the entire borrowing base calculation, empowering them to expedite drawdown requests and make informed decisions in seconds, not days. Thanks to our AI-driven validation, they have gained more accuracy and agility in their financing operations. With real-time insights at their fingertips, they have been able to rebalance advance rates and optimize contractual provisions, all while focusing on driving new transactions and extracting insights from their data.

Use case 2

Our client is a European digital lending platform for SMEs powered by asset-backed notes. Backed by a diverse group of investors across 10+ unique transactions, they navigate a complex landscape of limits and triggers. With Cardo AI Data Validation, loan classification management has ceased to be a hurdle. No more waiting for investor checks or lengthy validation periods. With our solution, portfolio data has been seamlessly uploaded onto the platform, instantly triggering checks and enabling originators to take action. Investors could effortlessly track progress through a dedicated dashboard ensuring transparency.

Ready to take your data validation to the next level? Request a demo here to see the new functionalities in action.