The benefits of AI-driven contract automation such as increased productivity, lower risk, improved data management, and cost savings have already been established. In 2023, businesses will continue to employ contract automation extensively to speed up the contracting process and lower manual errors.
Here are the five major contract automation trends to look out for in 2023 when selecting your CLM Software:
1) Integration In Smart Contract Automation
In 2022, OpenAI’s ChatGPT created a massive feature in the legal drafting space with contract lifecycle management software readily integrating this AI for its uber-smart features. Current trends in contract automation point to a spike in the use of the new ChatGPT3 to offer a user-friendly and well-integrated CMS solution.
Alongside AI, companies are rapidly migrating towards a cloud-based contract management system. Thus, the integration of a secure cloud in CMS platforms becomes mandatory in 2023. Integration with other enterprise systems and mobile compatibility are also some of the most anticipated features of a contract lifecycle management checklist.
2) Role of AI in Contract Lifecycle Management
AI and ML are majorly used in CLM to find key clauses in agreements and contract reviews. However, with the rapid evolution of AI, algorithms can now find patterns and connections within the contract to extrapolate data and help make better business decisions.
Furthermore, the increasing use of the “drag and drop” option will allow organizations to manage multiple documents for processing in their convenient ways. This will ensure seamless automating and streamlining of contract data extraction processes alongside classifying contract data as per user convenience.
3) Increasing Importance of NLP in Simplifying Contract Jargon
Natural Language Processing (NLP) clubbed with AI breaks down the contract jargon to help you understand and comprehend the subject like a human would. AI and NLP can aptly extract and classify contract metadata while dramatically cutting down the time needed to manually process the same.
NLP will continue to gain momentum in simplifying complex data, making way for fine-tuning and better prompting easier to incorporate on CLM platforms.
4) Improvements In Blockchain
Smart contracts will continue to be in action with their seamless usability and encrypted transaction records. However, hybrid smart contracts integrated with blockchain and off-chain systems are also likely to gain popularity. These contracts get you the best of both worlds, allowing the execution of more complex and flexible agreements.
The interoperability between blockchains is another such trend expected to be in motion. It will no longer be difficult for different blockchain platforms to interact and create new types of smart contracts.
5) Data Privacy And Regulatory Compliance
Digital contracts are often questioned for their safety limitations and data breaches over anything else. In the ever-changing world of digitization and documentation, contract management software with high-security standards and privacy policies are a must to have.
Preventing data breaches and ensuring compliance with changing legislation is an essential criterion for businesses to look out for in 2023. Security certifications, penetration and vulnerability testing, and encryption in transit and at rest are some indispensable security measures to have in your CLM software.
With the rising demand for automation software, contract lifecycle management systems are readily adapting to the trending technologies to ease the hassle of managing contracts at the organizational level. The pain of managing contracts is common to every organization irrespective of their size, and the use of AI/ML technologies will increase efficiency, reduce risk, improve data management, and cost savings.
As your company expands, the number of stakeholders and complexities with contracts increase dramatically. InkPaper’s CLM platform helps you stay updated with these new features and improve the performance of your overall organization.
