Moody's Gen AI Tool Alerts CRE Investors on Risk-Posing News
One of the Big Three credit rating agencies Moody's has released a potentially revolutionary way of managing commercial real estate (CRE) by implementing Gen AI as an Early Warning System for portfolios.
This innovative solution marks a significant leap in how AI technology is being applied to risk management and portfolio intelligence in the CRE industry.
“With our Gen AI-powered Early Warning System, we're empowering clients to anticipate and prepare for potential future outcomes by connecting the dots between complex circumstances and possibilities and ensuring what they see is most relevant to them,” said Luis Amador, General Manager of Commercial Real Estate at Moody’s.
Acting in tandem with the tools available to investors, the system will work as an early warning system for its users so they can make decisions across their portfolios.
Early warning AI
This Early Warning System utilises Gen AI to monitor headlines and alert clients to breaking news that could impact their portfolios.
Gen AI is already well acclaimed for its ability to monitor and detect, and for this reason it is seeing use in industries like the cybersecurity field.
Yet, where it excels is reading and understanding words. Therefore, by integrating clients' proprietary data with Moody's extensive CRE datasets, the system can rapidly perform stress tests based on the information it receives from the news and identify potential risk exposures across the clients’ data.
The application of Gen AI in this context represents a significant advancement in AI capabilities.
AI systems, although widely used in management of CREs, largely relied on pre-programmed rules. Gen AI can, however, generate new, contextually relevant information based on vast amounts of training data.
In the CRE sector, this translates to an unprecedented ability to process and analyse complex data sets in real-time.
For instance, if news broke about a major retail tenant closing multiple locations, the Gen AI-powered system would not only alert affected clients but could also generate a comprehensive analysis of potential impacts across their individual portfolio.
The speed and efficiency of Gen AI are particularly crucial in this application.
A study by MIT Technology Review found that Gen AI models can process and analyse data up to seven times faster than traditional machine learning models.
In the context of Moody's Early Warning System, this means that what once took hours or days to calculate manually is now reduced to mere seconds or minutes.
Moreover, the Gen AI system's ability to learn and improve over time sets it apart from traditional analytics tools.
As it processes more data and receives feedback from users, the system becomes increasingly accurate and nuanced in its alerts and analyses.
The Early Warning System also showcases Gen AI's potential to democratise access to complex information.
By providing instant answers to queries about client portfolios, the system makes sophisticated financial models and risk assessments accessible to a wider audience within organisations, including analysts, stakeholders, and regulatory bodies.
Gen AI's specific applications
A report by PwC suggests that AI technologies, including Gen AI, could contribute up to US$15.7tn to the global economy by 2030.
By harnessing the power of Gen AI to provide real-time alerts, automated risk assessments, and instant portfolio intelligence, Moody's Early Warning System demonstrates just how it can be leveraged to create tangible value in a specific industry context.
From detecting cyber threats and delivering tailored ads to providing CRE alerts, Gen AI is poised to revolutionise various sectors comprehensively.
******
Make sure you check out the latest edition of AI Magazine and also sign up to our global conference series - Tech & AI LIVE 2024
******
AI Magazine is a BizClik brand
