The Silicon Review
With the increasing market orientation of the economy, investors value an orderly evaluation of two types of risks, namely business risk arising out of the open economy and linkages between money, capital and foreign exchange markets and payments risk. With a view to protect investors, who are the main target for unlisted corporate debt in the form of fixed deposits with companies, credit rating has been made mandatory. Given the slump faced by economies globally and the rise in the number of defaulters, it is about time that there is a credit ratings system in place to ensure smooth operation for the entire chain. This is where TheMarketsTrust comes in to provide a simple system of gradation of corporate debt instruments and assist lenders to form an opinion on the relative capacities of the borrowers to meet their obligations. With a primary focus on emerging market, TheMarketTrust Ratings will facilitate the financial inclusion of more than 300 millions of corporates where the current credit gap for both formal and informal SMEs is estimated as high as US2.6 trillions.
TheMarketsTrust aims to service banks, insurance companies, large and small corporations and other issuers of complex securities as an independent Credit Bureau.
Combining Big Data and Machine Learning to achieve productivity
TheMarketsTrust is building the first real-time rating platform of the world where ratings are produced in near real-time by using advance models that are designed by a team of subject matter experts. Using artificial intelligence (AI), big data analytics and market news analysis, and combining quantitative and behavioral models, it completely automates the quantitative and qualitative assessment of credit risk on any class of financial instruments. In this way, it addresses the need for cost effective, unbiased, accurate, timely and predictive ratings. In so doing, it is solving the asymmetric information problem as well as the issuer & payer conflict of interest and protecting investors by sending them early warning signals on financial market crash.
Leveraging technology and financial expertise to deliver customized solutions
At the core of its service offering is its innovative risk management platform, Leopard Solution. Leopard Solution is a data driven platform that integrates and analyses market data, financial data and unstructured information to derive valuations, credit ratings and risk measurements of complex securities,and Corporates.
TheMarketsTrust received the support of the European Commission through the Horizon 2020 program for its R&D activities and was selected for EU funding in one of the most competitive categories “Open Disruptive Innovation”. Since 2015, its high potential has been recognized by two major banks: The Swiss UBS and the Spanish BBVA. The company has also been invited as finalists for its highly competitive innovation initiatives aimed at identifying promising RegTech companies.
On the organization side, it has been strengthening its team to 24 collaborators from 8 different nationalities. On top of that, it formed four strategic partnerships with EU Universities from IT, BE, Au, and Pl in the field of Mathematics, Big Data and High Performant Computing.
In 2016, the company completed its first Proof of concept (POC). Moreover in 2017, TheMarketsTrust has opened its first subsidiary in London City. Private investors can expect from 10 to 30 times ROI for a period of 5 to 7 years, possibly following an acquisition by a major financial technology or data vendor.
Business Model that improve transparency in the market
TheMarketsTrust works on the basis of framework contracts with issuers. The duration of such contracts is between 1 and 5 years, a common practice in the Credit Rating industry. For the contract duration period, the company will receive fixed monthly payment installments. This amount is defined according to the number of securities the issuer requires support for.
Additional sources of revenue are derived from services offered to issuers and financial players on subjects such as: design of bespoke scoring machine learning algorithms; integration of specific modules from our platform into banks systems, asset management firms and other buy-side institutions, on a license basis.
“Consequently, due to the strong technological basis of our rating service, we are able to achieve a high degree of automation in rating assessments and on-going monitoring”, the company said. In addition, it believes that the issuers of securities value its fully data-driven approach to rating assessment. Thus, TheMarketsTrust provides clients with the tools to better understand and improve their ratings by adapting business strategies to objective KPIs.
Bringing back the trust to the financial market The company was incorporated in May 2014 at Luxembourg. Its market size is estimated at 104 Billion US dollars where it is targeting 5% of market share within the next 7 years. To support its growth and global expansion, it plans to reach out to venture capital investors and legal entities over the next 5 years with the objective to raise 250 Million US dollars.
Knowing the leaders behind Market Trust
Evangelos Papadopoulos (CEO) has a PLD 14 from Harvard Business School. He is an IT Architect with over 20 years of experience aligning IT to the business strategy for large complex organizations. During the last 14 years, he has designed and implemented critical components using real time technologies for several major stock exchanges, leading development teams of up to 200 employees.
Frédéric Le Dinahet
(Deputy-CEO) has a PLD 14 from Harvard Business School and MBA from HEC Paris. He has over 10 years of experience in large multinational organizations as finance and controlling director. During the past years, he has implemented major operational and legal reorganizations at global organizations, including IT reshuffling. He has been a regular advisor to C-level executives in business development and strategic implementation.