A Fintech Bank Utilizes Ratings and Rating Research to enhance Its portfolio and risk processes

An expected economic slowdown in the year’s second half, while interest rates remain elevated, will test business volumes, asset quality, and financing conditions. This, alongside potential geopolitical spillovers and a continued credit divergence, made this client boost its credit risk data sources.^*

This U.K.-based online fintech bank offers a wide array of banking services for retail customers and businesses. The astounding expansion and increase in business from retail clients globally paired with an increasing valuation led to the creation of an in-house investment and Credit Risk team. The team needs to monitor, report and select appropriate investments that would generate appropriate returns. Given the increasingly challenging financial and economic market landscape of the past few months, the team felt they needed more robust processes for investment selection and credit monitoring. They wanted to acquire  additional data that would help in assessing potential strengths and weaknesses across industries and specific entities.

Pain Points

With the objective of strengthening in-house investment selection and credit risk monitoring and reporting processes the teams decided to strengthen their data sources and analysis processes to take a closer look at the creditworthiness of entities they had an interest or relationship with. Specifically, they wanted access to:

—  High-quality credit ratings at both issuer and issue level from a leading credit rating agency, and the ability to receive these via various delivery mechanisms.

—  Access to leading research on macroeconomic, credit and industry trends, as well as entity-level research.

—  Productivity-enhancing workflow tools to easily zero in on areas of interest and be alerted to relevant rating actions and research publications in real-time.

—  The possibility to easily integrate this data with other datasets and platforms for ease of use and comprehensiveness.

The company had an on-going relationship with S&P Global Market Intelligence ("Market Intelligence") and were aware that Market Intelligence provided access to credit ratings and research by S&P Global Ratings.

The Solution

Specialists from Market Intelligence described RatingsDirect^®, the official source for S&P Global Ratings credit ratings and research, and RatingsXpress^®, one of the leading industry's largest databases of credit ratings.  RatingsDirect^® combines extensive credit ratings intelligence with comprehensive market data, credit risk indicators and dynamic visualization tools, all on a single platform. Complementing RatingsDirect^®,  the specialists also described RatingsXpress^®, a database of S&P Global Ratings’ extensive issuers and fixed income issues credit ratings delivered via API, Cloud or Feed. Together, these capabilities would provide the investment and credit risk teams with:

	Deep insight into entities and securities rated by S&P Global Ratings	S&P Global Ratings is synonymous with quality credit ratings, deep analytical expertise and astute forward-looking opinions. Coverage includes over 9,000 issuers and 89,000 securities across the globe with global, national and regional scale credit ratings on the issuer and issue level.[1] Delivered to the client via desktop and API to streamline different use cases and allow for databasing
	Unrivalled credit ratings research	With over a century of rating experience, research and proven methodologies, S&P Global Ratings’ analysts provide independent and objective credit opinions with local perspective within a global context. Users can leverage top stories and the latest sector highlights tailored to specific risk management needs.
	Access to credit-adjusted financials	Analyst-adjusted financial statements are available for 900+ global banks, 2,700+ corporates and 11,400 U.S. municipals. This enables users to improve the clarity, consistency and comparability of credit risk analysis with pre- and post-adjusted financial statement data.
	Dive deeper	Anticipate and be ahead of any market developments and potential ratings actions with our newly updated CDS market derived signals, Outlook, Upside, and Downside Scenarios, and Financial Thresholds. Access digitized corporate, banks, insurance and sovereign scores and factors giving users more granularity into the ICR process.
	A robust desktop platform to monitor developments	With an AI-powered integrated search function, users can quickly locate the information needed to research an issuer or topic of interest. There is also a clean and simple layout for the desktop platform, which combines alerts and other tech-forward productivity tools, unrivaled market analysis and 24/7 customer support. In addition to desktop access, credit ratings and research are available via a data feed, cloud-based solution and an API.

Key Benefits

Members of both teams had an opportunity to test RatingsDirect and comprehend the technical delivery of RatingsXpress and were impressed with the quality and coverage of the information and the productivity-enhancing tools that made it easy to utilize the capabilities. They subscribed to both services and are now able to:

• Uncover an issuer’s credit story, its rating history, outlook and potential drivers of upgrades/downgrades to further evaluate creditworthiness.
• Quickly visualize the ratings distribution of issuers and use filters to obtain a tailored view by sector, location, ratings type and more to dig deeper.
• Create customized push alerts for critical credit ratings changes to easily monitor exposures.
• Review the underlying scores and factors behind a final credit rating
• Dive into industry or sector research articles, macroeconomic insights and credit trends
• Enrich your databases with access to a direct ratings feed straight from the source for internal databasing in in-house systems
• Create risk management benchmarks and ensure analytical comparability among counterparties