Waters Rankings: Best Credit Risk Solution Provider—Moody’s Analytics

Moody's Analytics

Back in 2015, Moody’s Analytics caused something of a stir when it replaced Numerix—one of the Rankings’ most consistent winners over the past decade—as the recipient of the credit risk solution provider category. But on closer inspection, that win shouldn’t have come as too much of a surprise, given that the New York-headquartered firm won the award in 2011, thanks to its RiskCalc offering, a credit risk platform that furnishes capital markets users—both buy-side and sell-side firms—with a range of credit risk functions, including the probability of default, loss given default, expected losses, and various other credit measures. 

Mehna Raissi, who manages the single obligor credit risk solutions product management team at Moody’s Analytics in San Francisco, explains that RiskCalc services a variety of customer use-cases, even within the same organization. “It could be the risk department using RiskCalc for counterparty risk management, the treasury department using it for transfer pricing purposes, or the accounting department using it to calculate their mandated IFRS/CECL expected credit losses,” she says. “RiskCalc is also used in portfolio management for ongoing monitoring and benchmarking purposes or at the executive level for looking at the portfolio and where the company has exposures and what industries might be good places to increase or reduce investment.”  

In terms of the challenges facing Moody’s Analytics clients, Raissi explains that there are two: the variety of the risk tools used across the business, and, inevitably, data. “There are inconsistencies in the different risk management tools being used across departments,” Raissi says. “Our customers need a common language across their organization to understand credit risk exposures at various stages.  The other challenge is data—it’s always a challenge. It sounds simple, but the data collection process is critical. We’re focused on ensuring that the appropriate data is collected and that it can be easily updated and monitored with our credit risk models.”

Last year, Moody’s Analytics made significant changes to RiskCalc by including an LGD (loss-given-default) component to provide a recovery at default solution. It also added scorecards, peer analysis reporting, updates to a number of country models, and launched the ability to access RiskCalc via an Excel add-in. “We’re continuing to build out Excel add-in templates that address specific client use-cases such as vendor management risk or early warning monitoring,” Raissi says. 

Moody’s Analytics is also currently updating the RiskCalc website, scheduled to go live at the end of 2017. “We are improving the RiskCalc solution to encompass self-service capabilities, meaning the ability for a user to log-in, easily understand RiskCalc, select the modular components that apply to their needs, and understand the value and what to do with it,” she says.

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