IMD & IRD Awards 2023: Best counterparty data project or initiative—S&P Global Market Intelligence

Overview

Assessing a company’s credit risk can be challenging and time-consuming. Differing filing obligations and inconsistent availability and quality of data mean credit analysts have a number of obstacles to overcome in making their assessments. S&P Global Market Intelligence addresses these challenges with Credit Analytics, a suite of analytical solutions to help buy- and sell-side firms, lenders, insurers, and corporations to manage and monitor credit risk exposure across portfolios, suppliers, and counterparties.

The solution

Credit Analytics combines financial data, market data, and alternative credit risk indicators with credit modeling expertise, credit-specific data, and automated data extraction and spreading tools to deliver a range of credit risk solutions. The solutions are available via a range of data delivery options, including API, datafeeds, containerized solutions, and Snowflake.

Credit Analytics’ newest model is RiskGauge, which covers 50 million public and private, rated and unrated, companies worldwide, including small- and medium-sized enterprises (SMEs), and 9 million companies with financials. For each of these companies, it provides analytical models, data and commentary.

Secret sauce

RiskGauge provides its assessment of a counterparty’s creditworthiness using a range of proprietary models to generate a single credit score rating from 1 to 100. The models include:

• CreditModel: leverages financial and macroeconomic data to generate a quantitative credit score that statistically matches a credit rating issued by S&P Global Ratings
• Probability of Default (PD) Model Fundamentals: incorporates financial and business risk to generate a probability of default value for public and private corporations of any size
• PD Model Market Signals: uses market movements to produce early warning signals for credit surveillance and monitoring of credit risk trends
• PaySense Model: identifies potential delays of trade payables using historical trade payable data and macroeconomic factors
• MaxLimit: identifies maximum exposure limits by analyzing a customer’s financial and industry risks, and a supplier’s risk appetite

The credit assessment is delivered in a RiskGauge Report, a business credit report that details the model outputs and provides a descriptive context of the score to help users better understand the drivers of risk. Relative performance is also assessed by benchmarking the company against peers across a number of risk indicators.

Recent milestones

• 50% increase in Credit Analytics users over the last 12 months
• Active users of RiskGauge reports have consistently exceeded 4,500 users per quarter since launching in 2020

Future objectives

The now completed integration of IHS Markit and S&P Global Market Intelligence has allowed the firm to add new datasets to the Credit Analytics suite. New additions include economic and country risk assessments and ESG indicators, which will enable S&P Global Market Intelligence to:

• Show the credit impact of key global issues on counterparties
• Demonstrate how key ESG indicators affect financial performance and creditworthiness

Why they won

S&P Global Market Intelligence’s Credit Analytics offering has delivered the win in the best counterparty data project or initiative category for the New York-based data and technology provider. As one would expect, Credit Analytics’ bread and butter is its ability to accurately and transparently measure firms’ credit worthiness, which it does by allocating scores out of 100 through its recently developed RiskGauge model. Assessing credit worthiness―essentially measuring counterparty risk―is a perennial challenge for capital markets firms, and while there is no silver bullet that ticks every box in this regard, the Credit Analytics platform provides users with much needed accuracy, transparency and peace of mind.