Bengaluru, 21st May 2024 –Jagdish Sheth School of Management (JAGSoM) today announced that the Indian Patent Office has granted Patent No. 528993 for its innovative technology that tracks and predicts changes in corporate credit ratings in real-time. This rare achievement highlights JAGSoM’s leadership in developing solutions that reshape the financial industry.

The technology behind the patent allows companies and financial institutions to track future changes in a company’s credit rating in real-time or creditworthiness in real time–whether it’s getting better (upgrade) or worse (downgrade). Building such a technological patent into credit rating systems can allow financial leaders and decision-makers to gain creditworthiness insights very quickly, almost as a company’s financial situation changes.

This cutting-edge system is designed to revolutionize the way financial institutions and investors assess credit risk. Unlike traditional credit rating models, JAGSoM’s patented technology incorporates not only a company’s financial data but also analyzes real-time news and sentiment analysis to forecast rating changes every quarter rolling window with up to 90% accuracy. This gives lenders and investors a significant advantage in decision-making and risk mitigation.

The patent is the culmination of eight years of development by renowned JAGSoM professors, Prof. S. Chandrasekhar and Prof. Moovendhan. Dr. Chandrasekhar possesses nearly 50 years of experience in academia and industry, with expertise in machine learning and predictive analytics. Dr. Moovendhan, with over 25 years of experience, specializes in strategic management and data analysis.

Key Benefits of the Patented System

This patented system offers significant advantages to the financial sector. Lenders can make proactive decisions about loan portfolios, reducing potential losses. Investors use an early warning system to identify potential credit-related risks and opportunities, allowing for faster, more informed decisions. The technology enhances portfolio optimization, enabling diversification across varied asset classes and spreading risk more effectively.

Current credit rating models often rely heavily on financial data and are updated less frequently. JAGSoM’s patented system addresses this by analyzing real-time company news and sentiment, providing investors and lenders with a faster and more dynamic understanding of potential credit risks. This innovative approach reduces delays in information and allows for more proactive decision-making.

This technology also offers significant advancements in risk management for financial institutions. By providing early warning signals and more accurate predictions of loan defaults, banks, and other lenders can proactively improve their portfolios and minimize potential losses. This tool also aids in diversifying investment portfolios, reducing overall risk exposure.

Commercializing Innovation

JAGSoM plans to commercialize this breakthrough technology. Their vision includes building a secure, user-friendly platform that will help financial institutions harness the power of predictive credit rating analysis.

“JAGSoM has plans to commercialize the invention of this patent which will help the Financial Institutions in proactive risk management and optimization of portfolio returns with least expected risks. GSOM is very keen on developing the platform to showcase the potential of patent commercialization. This will be hosted on a secure platform with a highly friendly user interface,” said Dr S.CHANDRASEKHAR, Senior Professor of Digital Business and Analytics in a statement.