S&P outperforms Moody’s and Fitch

S&P outperforms Moody’s and Fitch
Alex Proimos / Flickr

This year the Big Three credit rating agencies have started to change their conservative approach to business. Moody’s, S&P and Fitch are competing against each other not only in the ratings industry but also in technology of the future – artificial intelligence (AI).

Fitch was the first among them to announce it will use AI in business for analyzing news. Moody’s invested in Parisian startup QuantCube Technology. Now clients and invest managers can get real-time predictive analytics.

However, the biggest step towards implementing AI was made by S&P who paid the largest price for an AI company ever. Rating agency acquired Harvard startup Kensho Technologies Inc for $550 million. S&P believes that machine learning will make complex financial analysis as easy as search process in Google.

Even though the Big Three do not abolish their well-established rating schemes and business analysis, we see that as analysis is becoming more and more complicated, traditional methods do not guarantee successful investments. That is why implementing AI for rating agencies seems unavoidable. We will see which tech the companies will use to steer clients and which agency will manage to do it in the most cost-efficient way.

TFH AI Analysts