Supernova Award Category

Data to Decisions

The Problem

Our  Credit Rating organization and operation was generally viewed as a hurdle in the Sales Process. We provided tactical risk services. It was manual, inefficient and therefore expensive.

Credit ratings for our clients were manually compiled. We did not have an aggregated view. Each review took 120 minutes review time. We had “inches and pounds of paper”.

We did not have ratings for private companies and limited data sources.

The Solution

The ideal solution we were looking for would have the following characteristics and the solution we eventually identified from RAGE Frameworks did.

• robust forward-looking ratings and estimated default probabilities for public companies and private placements
• Real Time update to ratings effectively making the rating continuous
• Ideally the real time rating should be a leading indicator of CDS spread changes and bond prices in a significant number of companies being covered
• In addition to secured creditors, focus on the unique needs of unsecured creditors
• Provide ratings for private companies based on information supplied by HDS
• Ratings must be  independent and objective; ours is not an ‘issuer pay’ model
• High degree of automation, enabling us to scale efficiently

The results

Our Credit Rating organization is now viewed as an enabling and consultative partner. We have lifted our sights to strategic risk management and we now have a cost-effective, automated solution.

We have an aggregated real time heat map highlighting risks, with on-demand risk-rating and one page credit reports, bringing down out review time to 20 minutes.

We now have live models to run “what if” scenarios. And we have an independent unbiased view from outside of the 3 core Ratings agencies. 
now have early warnings for all companies, including private companies. We have access to as many sources as we desire. We also have near real time risk indicator movement based on current global events.

Metrics

1. Credit organization moved from tactical group to a consultative value added group.
2. 120 minutes review time to 20 minutes
3. Monthly/quarterly ratings to continuous ratings
4. No real-time monitoring of global events to comprehensive, complete, real time risk monitoring.
5. Ratings for private companies
6. Dependence on issuer-pay Credit Rating agencies to independent ratings

The Technology

Real Time Intelligence (RTI) from RAGE Frameworks, a Genpact Company.

Disruptive Factor

RTI from RAGE Frameworks is a new paradigm for credit risk assessment using patented Artificial Intelligence and Machine learning technologies.  Applying traceable statistical methods to arrive at bankruptcy prediction algorithms that are significantly superior to other published work and applying proprietary computational linguistics to interpret media reported global events, both come together to create a unique solution for providing continuous credit ratings.  RAGE has adopted a two-stage approach to continuous credit risk assessment. Results from validations of RTI with CDS spread changes strongly validate the power of this paradigm.

Shining Moment

The technology aside, RAGE’s ability to work with us to actually solve our business problem is something that stands out.