Case study: Digital innovation in credit analysis at a major European bank

About the company

A leading European banking group operates an extensive domestic network and serves approximately 14 million customers globally. The group offers a comprehensive suite of financial products and services, including retail and corporate banking, wealth management, and insurance. Beyond its local market, the bank maintains a significant international presence across Central and Eastern Europe, the Middle East, and North Africa. The internal ratings team, part of the Credit Risk function, plays a crucial role in assessing and monitoring the creditworthiness of counterparties.

Background

The bank has embarked on a strategic and structured approach to GenAI adoption as part of its broader digital transformation strategic objectives. GenAI is viewed both as a driver of operational efficiency and as an enhancer of organizational capabilities. Initiatives include establishing an innovation lab with research partners to focus on GenAI development and deployment, integrating GenAI into select operational processes to improve speed and accuracy, and positioning GenAI as a tool to augment employee capabilities. Currently, the bank is actively implementing and scaling these GenAI initiatives, moving from pilot projects to broader deployment across the organization.

The challenge

The bank, a longstanding Moody’s customer, manages a substantial and diverse portfolio of corporate entities and financial institutions. Traditionally, producing credit memos for much of this portfolio was a highly time-consuming and manually intensive process, requiring extensive data collection, analysis, and coordination. To alleviate this burden and free up internal resources, the bank outsourced credit memo creation to a third-party provider. However, despite outsourcing, the process still took considerable time and did not fully leverage available data and insights from Moody’s solutions. Seeking greater efficiency, faster turnaround, and improved integration with Moody’s proprietary data, research, and risk analytics, the bank evaluated whether Moody’s Agentic Solutions could serve as a viable in-house alternative that would match or exceed the quality, speed, and consistency of the existing workflow.

The solution

To address the challenges associated with credit memo creation, the bank conducted a Proof of Concept (POC) using Moody’s Agentic Solutions. The goals were to automate and enhance the credit memo process, reduce reliance on external vendors, and embed Moody’s intelligence directly into the bank’s decision-making framework. Key objectives included replacing the third-party provider, streamlining efficiency by minimizing manual work and turnaround times, elevating the quality and consistency of credit analysis, and integrating actionable insights directly into internal workflows.

Moody’s Credit Memo agentic solution stood out in several important ways:

• Collaborative and responsive approach: Moody’s worked closely with the bank to understand its unique requirements, engaging in ongoing dialogue and adapting the solution to evolving needs. 
• Robust data estate: The solution provided access to a wide range of proprietary, relevant data, including Moody’s Ratings and Research, entity firmographics, ownership, financials, company filings, and more, delivering credit memos well-supported by comprehensive information. 
• Ease of integration into internal workflows: Moody’s solution streamlined integration of insights into the bank’s processes, supporting more informed and timely decision-making. 
• Support for AI-driven expansion: The pre-existing interest in GenAI within the bank facilitated a smooth evaluation and adoption process, positioning the organization for future technology-driven enhancements. 

The successful execution of the POC showcased the technology’s strengths, solidifying the partnership between the bank and Moody’s. However, the initial POC also identified areas for improvement, such as limited template flexibility that did not fully address the diverse requirements of the bank’s portfolio. In response, the implementation strategy was refined: the initial deployment focused on developing a highly customized template for a prioritized segment of their portfolio. This targeted approach ensured the template was attuned to the segment’s specific nuances, delivering more relevant and actionable analysis. The focused rollout serves as a blueprint for future expansion, with next steps defined for sector-specific development of specialized templates as the initiative scales across the bank.

The outcome

Moody’s Credit Memo agentic solution delivered substantial benefits to the bank, notably by producing high-quality first drafts in a fraction of the usual time. This efficiency significantly reduced the time analysts spent on data gathering and memo drafting, enabling them to focus on deeper analysis and higher-value activities. While the ratings team spearheaded the initiative, other teams, including underwriting, also experienced improvements, thanks to customizable templates that support multiple functions and foster consistency in credit assessments.

• Accelerated credit memo creation: The solution produced first drafts in less than 15 minutes, cutting down the usual two-week period required for initial credit memo preparation. 
• Cross-functional benefits: Customizable templates supported both the ratings and underwriting teams, aligning processes and boosting consistency across departments. 
• Greater GenAI usage: The intuitive interface and user-friendly design led to widespread usage and faster implementation among teams, surpassing the bank's typical rate of adoption for new solutions. 
• Growing workflow automation: This solution is leading the bank’s adoption of GenAI, quickly fostering collaboration on new opportunities to streamline processes, free up resources for more strategic tasks, and boost overall productivity. 
• Performance continuity: This solution bridges knowledge gaps, maintaining quality and consistency as workforces evolve. 
• Improved decision-making quality: Consistent, data-based insights strengthen the bank’s capacity to make well-informed credit decisions. 

For more information, visit Moody’s Agentic Solutions.