FinTech in Credit Rating Agencies: Evolutionary or Revolutionary?

Abstract

CRAs became even more critical in the global financial market since their judgment has a significant impact on the outlook of the rated entities, which can be countries, institutions or companies. The combination of finance and technology resulted a concept which is known as Financial Technologies (FinTech). FinTech drove and encouraged financial institutions to change and differentiate the way of providing their services. In this thesis, the primary focus is to explore the impact of FinTech on CRAs. Given the importance of CRAs, exposing many criticisms about their credibility and secrecy about their methodology may lead investors to seeks alternative ways to obtain information/opinion for the entities. Furthermore, considering the growth of FinTech and its rapid development, resulted the research question of if the impact of FinTech on CRAs will be evolutionary or revolutionary? FinTech is relatively a new term, and there is limited research about its effect on CRAs. In this thesis, an exploratory study will be conducted in order to contribute to the existing information about the potential impact of FinTech on CRAs. Accordingly, this study aimed to answer the research question within the scope of qualitative methodology and using the empirical data has been gathered from the professionals in the finance sector through combination of structured and semi-structured interviews.