Written by Chartis Research.
As winner of seven category awards and placing fourth overall in the RiskTech100® 2020 rankings, Moody's Analytics continues to assert itself at the forefront of risk management with its technology solutions.
"We are gratified that Chartis continues to recognize Moody's Analytics as a leading risk technology provider," said Steve Tulenko, President of Moody's Analytics. "With our solutions, clients are simplifying, digitizing and automating their processes, operating more efficiently, and making better and faster business decisions."
New Category Win: Banking
Presenting the Banking award to Moody's Analytics recognizes the extensive global adoption of its solutions, which help banks with - among others - lending, regulatory and accounting standards, and balance sheet management.
The past year has seen a number of noteworthy developments for Moody's Analytics in this sector, starting with the addition of major new automation and commercial real estate (CRE) functionality to its CreditLens credit lifecycle management solution. Integration into the CreditLens platform of the Moody's Analytics QUIQspread tool allows clients to automate one of the most laborious aspects of credit decisioning - the collation, extraction and input of financial data. The solution's new CRE capability provides access to powerful CRE functionality directly within the CreditLens platform while delivering deeper insights to inform CRE credit administration.
The company also recently launched Reporting Studio, its first reporting-as-a-service solution, which allows clients to address regulatory reporting requirements without the need for on-premises software deployment and maintenance. Deploying this solution in the cloud means a lower total cost of ownership and increased scalability - and reduced demand on clients' reporting teams.
Moody's Analytics will remain focused on solving the challenges its banking clients face. New and existing accounting regulations - along with increasing imperatives for operating efficiency - mean flexibility is prized. The convergence of risk and finance functions, especially in terms of liquidity and credit integration, also poses its own unique challenges that the company is rising to meet.
Comprehensive CECL Capabilities
The global provider is winner of the Current Expected Credit Losses (CECL) category for a second year, reflecting the comprehensiveness of its cloud-based ImpairmentStudio platform and its broad CECL-automation capabilities. It combines the company's rich credit risk data with its best-in-class analytics and deep experience in impairment accounting to help firms identify the risks and opportunities presented by CECL.
The ImpairmentStudio platform is designed to automate and streamline complex internal CECL processes required to meet the new accounting standards. It helps clients improve their efficiency while producing usable business insights. The company feels it is important for institutions to look beyond initial deadlines and compliance requirements to how CECL efforts can help strengthen their overall risk infrastructure and risk management frameworks.
Continuous enhancements to the solution over the past year have provided customers with greater flexibility, as the company has been certain to maintain the latest functionality for the continually changing accounting guidance. This is best exemplified by enhancements to pre-configured reporting capabilities, including roll-forward and attribution analysis, and integration into the solution of additional Moody's Analytics data and models. The platform covers all asset classes in scope for CECL, including loans, debt securities, off-balance exposures, trade receivables and reinsurance receivables.
The flexibility offered by Moody's Analytics' CECL offering is a vital strength. While the accounting guidance is not expected to change materially over the coming years, the company foresees that the industry itself will drive a significant amount of change as institutions begin to conform to industry norms. In anticipation of this, the company has ensured that its CECL solution is able to immediately adapt to industry changes, giving customers confidence that its platform will continue to evolve along with their requirements.
Model Validation Award Retained in 2020
In an increasingly challenging financial environment, there is an ever-greater need to validate and monitor credit risk models. Moody's Analytics retains the Model Validation award, triumphing for a second year for the breadth and robustness of its market-leading model validation solutions. Encompassing the lifecycle of risk and finance modeling, the company demonstrates deep expertise in developing risk models and software across market risk, credit risk, stress-testing, liquidity risk and asset and liability management (ALM) functions.
Moody's Analytics' model validation solutions cover retail as well as commercial asset classes, for both internally developed and third-party models. Among these offerings is the cloud-based CAP solution. Powered by industry-leading proprietary data, a wealth of risk modeling experience and proven modeling frameworks, the CAP solution lets firms build, validate and monitor tailored models quickly and at scale.
The solution's flexible approach means that model deployment and integration tools within the software publish models as application programming interfaces (APIs) that can integrate with internal systems and other solutions from Moody's Analytics. It can also enable an interactive and collaborative environment throughout the modeling lifecycle, addressing the challenges of change control and documentation.
Clients are also able to build more robust models by augmenting internal data with proprietary Moody's Analytics data specifically tailored towards their portfolios, or specific segments of their portfolio. Both capabilities use the vendor's frameworks for model development, validation and monitoring of probability of default models.
Continued Leadership in Credit Risk for the Banking Book
2020 marks the fourth straight year that Moody's Analytics has won the RiskTech100® Credit Risk for the Banking Book category. Clients worldwide turn to Moody's Analytics for solutions to their complex credit questions. The company's combination of data, analytics and expertise allows it to deliver those solutions, and differentiates Moody's Analytics from its competitors.
Moody's Analytics' wholesale and consumer credit offerings, together with its credit assessment and origination solutions, enable firms to assess and manage their credit risk exposure over the entire credit lifecycle. As exponentially more information becomes accessible, customers are looking for efficient ways to manage the influx, and many are now also seeking to incorporate signals from alternative data into their credit decisioning and analytics.
The company has responded by designing solutions to help customers achieve those goals. One example is its new Credit Sentiment Score tool, which uses natural language processing and textual analytics of news media to identify signals of credit impairment in companies. This saves customers substantial time in sorting through news articles by extracting actionable insights from them.
Balance Sheet Risk Management and Enterprise Stress Testing Category Wins
Moody's Analytics has won the Balance Sheet Risk Management category for the second year in a row on the strength of its RiskConfidence balance sheet management platform. Banks worldwide use this integrated platform to manage their enterprise-level ALM and liquidity risk and for a range of regulatory and business needs.
The company has also taken top spot for its enterprise stress-testing solutions. Anchored in its modeling expertise, Moody's Analytics' stress-testing solutions help banks meet their stress-testing challenges while extracting business value from the results. By understanding the potential impacts of different scenarios, its clients are able to meet regulatory requirements while also making more informed business decisions.
Moody's Analytics has focused on enhancing its scenario engine to go behind the standard market data shifts and include, for example, the capacity to stress-test behavioral models and balance sheet forecasts. The company feels its capacity to compute analytics at the transactions level to prevent the loss of any precision helps set its offering apart from those of other vendors.
Having ALM/interest rate risk in the banking book, liquidity, fund transfer pricing, International Financial Reporting Standard 9 provision and hedge accounting all computed from a golden source of transaction guarantees the consistency of results. The Moody's Analytics RiskConfidence platform also enables heavy industrialization of balance sheet processing, from day-to-day or month-to-month, which is another clear differentiator.
Inaugural Winner: Pricing and Analytics - Credit
Moody's Analytics has been recognized for its customized credit pricing and analytics solutions, winning the RiskTech100® inaugural award in this category. These solutions address many complex requirements, including dynamic challenges in pricing assumptions, pricing scenario adjustments, intraday rate movements and granular cashflow analysis.
Moody's Analytics also stands out for its integration capabilities with third-party pricing providers. Its Structured Finance API has been integrated with many specialized pricing, ALM, trading and risk analytics providers. Such partnerships enable market participants to access Moody's Analytics structured fixed income data, credit, cashflow and pricing models.
The computationally intensive nature of evaluating large numbers of structured finance securities, alongside the goal of making its solutions more modular, scalable and high-performing, means Moody's Analytics is in the process of moving its analytics engines to the cloud. Additionally, it has a number of pilot projects leveraging artificial intelligence and machine learning to help improve its content coverage and its customers' turnaround times.