Moody’s, the credit analysis and performance management platform, has launched a new Early Warning System using generative AI (genAI) to monitor investors’ portfolios and alert them of any impactful headlines.
Monitoring the welfare of an investment has historically been a time-consuming and often arduous task, requiring employees to be constantly checking headlines and alerts about any impactful news that may affect the stock’s value. With the new solution launched by Moody’s, risks, alerts and assessments can all be conducted using tech.
The Early Warning System solution integrates the client’s own proprietary data with Moody’s CRE datasets. It offers an enhanced capability to quickly perform a stress test on their portfolios and identify potential risk exposures. Alerts will also transmit when changes occur within Moody’s CRE data, such as substantial new listings on portfolio properties or in tenant’s credit profile.
“With our GenAI-powered Early Warning System, we’re empowering clients to anticipate and prepare for potential future outcomes by connecting the dots between complex circumstances and possibilities and ensuring what they see is most relevant to them,” said Luis Amador, general manager of commercial real estate at Moody’s.
“By automating risk assessments and analyses, what once took hours or days to calculate manually is reduced to mere seconds or minutes. This transformative technology helps our clients make more informed decisions faster and with greater confidence.”
How would it work?
In its announcement, Moody’s showed several examples of how the solution could be leveraged in previous news. For instance, Macy’s announced several department store closures across the US this year, making headlines as a result.
If this type of news broke today, Moody’s clients with that tenant in their commercial real estate portfolio would be alerted by the new Early Warning System.
The capability will allow clients to determine whether this news would impact their net operating income, debt service coverage ratios, and loan-to-value ratios using this groundbreaking automated portfolio intelligence system.
This comes at a pivotal inflexion point for the industry. The COVID-19 pandemic sent shockwaves across the economy in 2020 and ushered in a new era of working. Despite being four years removed from the pandemic’s onset, uncertainties linger for certain property types such as office as hybrid work models became the norm and space demand dwindled as a result. Now more than ever, CRE industry professionals focus on identifying and mitigating risks and rely on innovative technology solutions to do it.
Going forward
By combining the firm’s focus on exponential risk with its investment in genAI, Moody’s CRE is making other powerful developments, including how clients interact with Moody’s CRE data and complex financial models to transform their risk management practices.
It is also providing clients with instant answers to queries about their portfolio. In turn, this democratises access to complex information and makes it readily understandable and accessible to a wider audience. This includes analysts, stakeholders, and regulatory bodies
Lastly, it reduces the need for manual search and analysis through dense documentation. As a result, users are able to focus on higher-level analysis and decision-making.
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