The financial assessment company Corporate Scorecard is planning to challenge established ratings agencies with a much cheaper product and what it describes as an independent business model.The company has been providing government and corporate clients with financial assessments of customers, suppliers and business partners for the past 24 years. Last month it gained Australian Securities and Investments Commission approval to operate as a licensed credit ratings agency.Corporate Scorecard has a different business model to Moody's, Standard & Poor's and Fitch, and it will market that difference aggressively.The company's general manager of ratings services, Brad Walters, said standard practice was for corporate debt issuers to commission a rating, which they used in their marketing to investors.Waters said this process involved a conflict of interest that has been the subject of much critical attention from groups such as the US Securities and Exchange Commission in the wake of the financial crisis.Corporate Scorecard will not accept a commission from an issuer. It is offering its services to the buy side - lenders, investors, insurers and portfolio managers. The group's other selling point is the cost of ratings. Walters estimated that a Corporate Scorecard rating would cost around one-tenth of a rating from one of the established agencies.Walters said: "We have a quant process that relies on a lot of technology. We have a lot of data that allows us to report on the historical and current financial position of the company and do some forecasting. We run scenarios on volatility."We use high-end specialists and do not have a business model that requires lots of analysts to look over the company and talk to management."Our customers like the quant approach because they feel it is objective."Corporate Scorecard has been benchmarking its financial assessment against the other ratings agencies for years. Its assessments use the same 21 notches from AAA to C that Standard & Poor's uses. Corporate Scorecard has a licence to do wholesale ratings. Walters said the company was open to the idea of doing retail ratings but had yet to make a decision on that question.It is also looking at the asset-backed securities market. It has no immediate plans and is not likely to rate mortgage-backed securities - an area where it has no background. But it might rate issues backed by commercial loans or leases.Walters said he saw plenty of opportunity: "The business landscape is changing. There is more interdependency in business because of the increase in the use of partnerships and alliances. "We have a role to play in helping companies understand their counterparty risks."The other change we have seen is the emergence of a new suite of financial risks. For 15 years we had a benign credit environment and easy access to money. Now there is competition for capital and a new focus on leverage ratios, liquidity and volatility."