Summary
Credit plays a key role in finance. However, many financial institutions are still using outdated approaches from the 1990's, 1980's and earlier to manage credit risk. This is out of place as we witness breakthrough technologies rapidly changing the world. The time has come to ‘Move the Credit Frontier Forward’ and Criat now offers the credit management technology of the future.
Criat was founded in Singapore in March 2017. The name “CriAT” sketches the formative profile of the company. “Cri” stands for the Credit Research Initiative (CRI) of the National University of Singapore (NUS) – where the start-up team was incubated - and “at” stands for Analytical Technologies in the field of credit risk – Criat's core specialization.
Criat believes that going deeper in credit analysis is the optimal way to empower risk and portfolio managers with the most valuable insights to support smart credit risk management and investment decision processes.
Description of fintech solution
Achieving high-quality credit analysis through modern technologies is a big challenge for in-house specialists and for traditional risk consultants and solution vendors. For example, two distinctive features of Big Data for corporate credit risk analysis– time dynamics and high dimension – lead to serious technical challenges even for many experienced Big Data specialists. The challenges of transforming Big Data into Smart Data and finally to Actionable Insights have been the Criat team’s focus for many years. During this time, the team has successfully researched, developed and applied a unique blend of innovative AI and Big Data analytics with the established econometric/statistical methodologies in order to tackle the challenges facing corporate credit risk.
Many start-up companies armed with Big Data analytical knowledge have emerged recently in the credit sphere. However, most of them are limited in credit risk knowhow and only able to provide tools and models to simply separate good and bad credits. In contrast, Criat has many years of experience and unique knowledge in understanding and finding solutions to the deeper credit risk issues facing financial institutions. We integrate in-depth domain knowledge and superior analytical technologies into our proprietary credit solutions. These sophisticated solutions have already been successfully employed by prominent multilateral financial institutions, including the IMF, the World Bank and other global banks and insurance companies.
Criat is dedicated and committed to working at the forefront of corporate credit analysis – Deep in Technologies, Deep in Innovation, Deep in Applications.
Describe your key innovations
The Forward Intensity Model was developed by Criat co-founder Prof Duan Jin-Chuan and was published in Journal of Econometrics in 2012. It has been used by NUS-CRI for PD production to serve global clients for more than 10+ years.
The Forward Intensity Model forms the building blocks of all the products at Criat. In essence, it depicts a firm’s default as the First Jump of a Double Stochastic Poisson Process. ?The likelihood of the “jump” is established by measuring the relationship between economic, capital market and corporate credit-related variables, and the occurrence of future default events. This allows us to publish a term-structure of future default probabilities at different horizons.
Our innovations have also been focused on generating analytics based on the underlying model. Our suite of analytical toolkits that help extract novel insights, early warning signals and investment insights help our buy-side clients in optimizing their portfolio, keeping risk management at the forefront of their decision making
Solution Lifecycle
Commercialized
Founder's Background
Professor Duan is the Chairman and a co-founder of Criat. He is also a professor emeritus of the National University of Singapore (NUS). Prior to his retirement in June 2023, Professor Duan helmed the Asian Institute of Digital Finance and held the Jardine Cycle & Carriage Professorship. Among his many accomplishments, the Credit Research Initiative (CRI) stands out. CRI is a public good undertaking via developing and maintaining a digital platform for assessing credit risks. Since its launch in 2009, CRI has been continuously providing daily updated individual corporate default probabilities on a global scale. A world-renowned expert on derivatives pricing and credit risk analytics, Professor Duan is an academician of Academia Sinica and a fellow of the Society for Financial Econometrics and serves on the advisory council of the International Association of Credit Portfolio Managers, among others. He received a PhD in Finance from the University of Wisconsin-Madison, once helmed the Risk Management Institute at NUS, held the Manulife Chair Professorship at the University of Toronto, and taught at the Hong Kong University Science & Technology and McGill University.
Dr. Weimin Miao is the CEO and Co-founder of Criat. He is passionate about solving problems and optimizing solutions pertaining to modern credit risk practitioners' pain point. Dr.Miao did his Bachelor in Statistics from Peking University, Master in Operations Research from University of Chinese Academy of Sciences, and PhD in Mathematics from National University of Singapore (NUS). After graduation, he has been working with the world-renowned scholar Prof DUAN Jin-Chuan in the area of credit risk to date. Prior to co-founding Criat, Dr. Miao worked as an NUS senior research fellow and led the Credit Research Initiative (CRI) team of over 40 researchers to promote the research on credit risk. Notably, Dr.Miao co-developed the BuDA solution with Prof DUAN Jin-Chuan and the IMF senior economist Dr Jorge CHAN-LAU for IMF’s macro-financial linkage analysis in policy work.
Founded (Years of Incorporation)
2017
How are you funded today?
Series A
Number of employees
40
Presence In Region
America
ASEAN
Asia
Europe
Global
India
North Asia
Oceania
Other
Technology
Artificial Intelligence
Data automation
Machine Learning
Natural Language Processing (NLP)
Risk Assessment
HQ Country
Singapore
What are the top 3 key benefits your solution will bring to the Asset Management Industry?
Monitoring Investment Universe:
1) Identify signals using early warning indicators that provide daily-updated list of top movers for portfolio rebalancing
2) Monitor Economy-sector level trends to identify credit cycles to understand market risk and improve position entering
Filtering Opportunities based on Risk Appetite:
1) Set pre-defined filters on your investment universe (based on entity or security) to figure out which bonds are over/under valued based on their intrinsic risk profile
2) Screen for low-risk, high-yield investment opportunities based on user-specified risk appetites (easy and intuitive traffic-light signals for riskiness)
Benchmarking performance against industry/sector aggregates:
1) Input user-specified benchmarks to measure relative risk on portfolio peers – use to identify top risk contributors for risk parity and other investment strategies
2) Use as macroeconomic indicator and model inputs for sector and economy level credit cycle benchmarks – a more granular and frequently updated dataset compared to anything else offered in the market.
Tell us more about your past client engagements to date and your market penetration?
Criat serves top-tier financial institutions (incl. banks, insurance, asset management firms etc.) and provides them with forward-looking credit measures, models, analytical tools, and market-driven insights. This helps them embrace new technologies and improve their risk and investment capabilities. We have a strong presence in South East Asia, China, and the US (with prospects and pipeline extending into EMEA and ANZ). Our solutions have been implemented both on a partnership level, as well as a collaborative endeavor between us and our clients to facilitate the creation of bespoke risk management solutions.
Do you have any case studies of your solution? If yes, please share it in less than 200 words
We are currently working with one of the largest buy-side investment organizations in South-East Asia by providing a suite of risk management and investment decisions solutions to their organization. We focus on generating early-warning signals for their investment portfolio that is heavily concentrated in APAC region (with lack of coverage in the region being a pain point for them with other solution providers). Our Early-warning signals have helped mitigate large-losses on their portfolio with on-time position rebalancing, especially to their exposure in the China Market. We are currently working on upgrading our offerings to be expanded to the wider firm.
