Best Counterparty Data Provider: Fitch Solutions

Monitoring and managing counterparty risk has become more important than ever in a world of increasing cross-border payments, regulation, and macroeconomic and political risks. This year’s award for Best Counterparty Data Provider goes to Fitch Solutions, a vendor that has continuously enhanced the data and analytics in its Credit Risk Solution to provide a powerful platform of actionable intelligence.

Paul Whitmore, product lead for the Credit Risk Solution, says: “Over the past few years, we have conducted hundreds of interviews and put significant time and effort into understanding what our clients’ needs and pain points are in counterparty risk. Fitch Solutions has a wealth of data—hundreds of financial line items on banks, insurance companies, corporate ratings and corporate hierarchy—and clients want solutions that make sense of this data, which is what our Credit Risk Solution does.” 

The service has been available on the Fitch Connect platform since 2017 and boasts one of the longest-running bank fundamentals databases in the market. It has particularly strong coverage in Europe and the emerging markets—a valuable resource as developed market interest rates stagnate, keeping many investors searching for yield. 

The Credit Risk Solution catalogs nearly 50,000 public and private institutions globally, with up to 30 years of historical records. Coverage includes more than 36,000 banks in 200 countries and 12,300 insurers in 150 countries. 

Last year, the vendor launched Early Warning Signals, a series of user-configurable data panels containing key risk drivers with single-entity trend analysis capabilities, customized charting for multiple risk dimensions, and market signals for credit default swap pricing and implied ratings. “This allows users to quickly identify signals, both of deterioration and improvement in credit, and if further analysis or action is needed,” says Evan Shenkin, head of product management.

In addition, Fitch’s new user data management tool allows clients to input their own data into Fitch Connect, for use alongside Fitch’s data to increase coverage or provide a different opinion for their analysis. 

Fitch will make a raft of enhancements to the service over the coming months, including a bank scorecard, which will capture data, derived works and descriptive text from Fitch’s bank rating criteria, and use its viability rating criteria in a judgment model. This will allow users to apply Fitch’s criteria to unrated entities, generating a consistent view of an entire portfolio’s credit risk. 

Fitch will also introduce equity pricing, third-party ratings and a portfolio-level dashboard, which will help clients assess risk for all entities they monitor. “We are consolidating this data to give analysts a full 360-degree view,” Shenkin says. 

Read more about the Inside Market Data & Inside Reference Data Awards 2019 winners