“Disrupting Credit Analysis for Corporate Lenders”
First A.I. company to automate interpretation of annual reports and accompanying footnotes
Singapore, 30th May 2019 – Banks can now manage large risk exposures and allocate capital to corporations and large enterprises more effectively – thanks to an advanced technology developed by award-winning A.I. start-up, MyFinB.
Large corporations typically make up a third of an average bank’s loan portfolio. The significant exposure means that banks face major risks if any of the corporate borrowers go bust or face balance sheet duress. Corporations have been experiencing a lot of uncertainties lately – emanating from events such as the digital disruption, increased geopolitical risks, economic uncertainty due to trade wars and increased regulatory pressures, just to name a few. The World Economic Forum revealed that the global economic growth declined by 3.3% in the early part of 2019; adversely affecting corporations worldwide and thus heightened the credit risks associated with financing them.
To address the aforementioned issues, MyFinB has successfully developed an expert system specially designed for banks with large corporate loan exposures. Consisting of 16 modules, the system is called Ultimate+ and automatically analyses financial statements and footnotes to give reviewers insights on the performance of competitors, key risks faced by the company and prescribe action plans. What is unique about Ultimate+ is that it is able to predict scenarios and prescribe remedies in under an hour. This automated, cognitive approach saves lending institutions substantial savings in terms of resources deployed and time taken to produce a detailed credit report with recommendations. This is especially the case when banks typically process between 100-500 corporate applications per month, supported by a small team. Because of this augmented ability, banks will be able to conduct the risk analysis of customers at lower costs, with quicker turnaround time in processing large amounts of data and risk variables.
According to Founder and Group CEO, M Nazri, “A lot of complexities have emerged arising from changing business models, technological disruption and unpredictable geopolitical risks. Banks need to take into account many variables and uncertainties and factor into their risk assessment models. They must also be able to process “hidden” messages found in annual reports and announcements and make sense of all interdependent variables. It is crucial to use A.I. to decipher this information quickly and delve deeper into the business strategies and management actions of corporations.”
“Banks need to manage their margins and risks by not over-extending their resources and at the same time, not omitting risk factors under a tight timeline for processing credit applications.”
Most recently, MyFinB has launched Ultimate+ as part of a pilot project for a local Singapore bank. Ultimate+, when fully adopted, can help banks significantly reduce operating costs, lower their risks and improve their net interest margins through effective risk-based pricing strategies using A.I.
Within this quarter, Ultimate+ will be made available on cloud platform to other financial institutions, consulting firms and large enterprises in Singapore, followed by the ASEAN regions, India, Australia/New Zealand and Central Asia as part of a Phase 1 launch.
MyFinB is also partnering with pre-accounting solutions provider, Skopos, as part of the offering. Skopos will focus on providing detailed breakdown of revenue and expenditure items as drivers of financial performance. The data from Skopos will then be fed into MyFinB’s post-CFO expert system to generate the Ultimate Plus reports.