AFTAs 2022: Best new technology introduced over the last 12 months (analytics)—Moody’s Analytics

Overview

EDF-X applies Moody’s Analytics’ credit risk models to pre-score the financial resilience of more than 425 million public and private companies. Even with limited or no financial data, EDF-X can generate risk measures by leveraging payment behavioral data or firmographic information for any company. EDF-X supports a range of credit decisions for financial institutions and corporates by providing Moody’s Analytics recommended views, with the option for users to create custom dashboards and incorporate their own data.

What problem does it solve?

Capital markets firms need to be able to identify the riskiest exposures in their portfolios as early as possible in order to avoid potential losses from defaults. While risk models have existed for decades, incorporating timely inputs to derive actionable insights for public and private companies continues to be a challenge. EDF-X provides a dataset and global coverage to help users determine which exposures they should worry about and when they should take action.

How does it solve the problem?  

EDF-X is an early warning system designed to detect impending credit issues as early as possible. It incorporates Moody’s Analytics coverage, timeliness and transparency to provide the credit monitoring information for market participants. It includes: 

• Forward-looking, point-in-time risk measures
• Decision rules that trigger alerts
• An analytic framework to turn insights into action
• The Early Warning Score, which is increasingly important in times of recession as it optimizes customers’ time by identifying their riskiest exposures

Future developments  

Moody’s Analytics recognizes that clients want to run their own scenarios and consume the output in different formats and frequencies. Through EDF-X, the firm continues to collaborate with clients and partners to enhance the offering and introduce new capabilities such as what-if analysis and custom scenarios.

Why they won

Moody’s Analytics follows up its recent success in this year’s BST Awards where it won the best buy-side compliance product (KYC) award by winning this highly competitive category in this year’s AFTAs, thanks to its EDF-X offering that allows firms to identify their greatest potential exposure as early as possible so they can take action before risks occur. The really smart thing about EDF-X is its ability to extrapolate credit risk measures with limited or even no financial data, a heretofore fraught task even for the most sophisticated capital markets firms.