Singapore's best and brightest have founded a fintech to help banks with their credit risk assessment.
Businessmen often think of universities as ivory towers stuffed with irrelevant and fusty academics.
But for Dr Weimin Miao, the CEO of CriAT, universities and scholars have a lot to offer businesses.
“Our founding team has five members, all coming from the National University of Singapore with many years of experience in the credit risk area,” Dr Miao says.
“We market tested a lot of cutting-edge credit technologies in an academic setting and proved they could be successful to come up with high-quality credit products.
“We had been approached by many financial institutions in Singapore, Taiwan and China who desired deep credit risk solutions. So we decided to move from academia to make a commercial entity.”
CriAT is a Singaporean fintech and consulting firm that offers deep credit analytics. After the GFC discredited many established risk managers, banks and financial institutions started looking for new voices to advise them.
It was here that Dr Miao saw an opening that could be plugged with new credit analytical technologies his team used at NUS.
“We’ve seen a lot of new big data technologies come in recently. But more of the traditional risk modellers did not really use them,” he says.
“What we have been doing is transferring these new technologies into a real credit product to meet the needs and desires of the market.”
Data is critical for CriAT and determines whether its products will work well.
For example, China is an attractive market for the Singaporean company. But because Chinese data is often unreliable, CriAT will have to make an extra effort to handle the data carefully. Australia, by contrast, has large and reliable data sets, making it easier for CriAT to offer high-quality products.
“Australia is attractive because it has great databases. In China it's often the opposite: the data needs a lot of work.”
The company is flexible about who its clients are. It focuses on the corporate credit assessment and steers clear of consumer finance and personal loans.
To date, its major clients have been Asian banks.
“Banks have been under a lot of regulatory pressure to advance their risk management practices. Our early warnings and stress testing products have been very popular with them.”
Going forward, the company hopes to continue making inroads into China, and has recently set up a joint venture with Zonda Credit Services to try and find a fintech solution for assessing the creditworthiness of Chinese SMEs.
CriAT has also made friends with KPMG.
“We have engaged with KPMG for a strategic alliance. We will deepen and broaden their credit risk solutions to satisfy their clients and be our product distributors,” Dr Miao says.