Bonds

A municipal fintech platform for asset management firms, banks, insurance companies, and municipal advisors is being developed by Assured Guaranty’s new subsidiary, AG Analytics.

The platform intends to deliver best-in-class technology and turnkey solutions to replace fragmented data resources used by municipal asset managers, analysts and other market participants.

“Many asset managers are using too many systems to do one job,” said Justin Land, CEO of AG Analytics. “The municipal market needs better research tools.”

For one credit research report, an asset manger typically need six to eight systems, he said. “But this fintech platform would allow for ‘one-stop shopping’ where analysts, portfolio managers and traders have one system fully integrated with the information just parsed out based on the user profile.” 

Assured Guaranty created AG Analytics “to develop software and data technology for municipal asset managers that brings credit analytics and financial, environmental, and governance data into one place to make credit research more scalable.”

Assured Guaranty’s underwriting department already uses the core software and underlying data that will be integrated in a dynamic data-driven tool built inside the AG Analytics platform to assess potential risks to obligors in its guaranteed portfolio.

This tool examines obligor-level risk and resilience for the public finance sector. AG Analytics intends to continue to develop its platform to include a wide range of fintech tools that streamline data-intensive analysis for municipal experts.

The platform is designed to be a “data-agnostic system,” meaning clients can add their data and model it. “It’s important for us to build a system that any user with their own data, whether proprietary or they want to buy it from another source, can put in the system,” Land said. “I don’t know of any municipal credit analytics software that allows you to do that; they tend to be closed systems.”

Land sees the new municipal fintech platform as the future of the industry.

“We’re seeing fees continue to fall in fixed-income and the municipal space, especially in investment grade,” he said. “And you either use technology to improve margins and reduce the expenses or your profitability declines. The workflow and triaging and connecting that to market data is going to create powerful tools and ways to look at municipal credit and trading in avenues that haven’t been explored yet.”

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