MEXICO - Finance
President & CEO, CIAL Dun & Bradstreet
Sergio Hernández has more than 20 years of experience in corporate financial services and fintech. Within his professional experience, he has directed three relevant companies in Mexico related to the sector, with great success. Sergio is responsible for CIAL Dun & Bradstreet’s operations in Mexico.
I have an extensive background in financial, corporate and business services, and I have also run three companies. Before the pandemic, I became interested in fintech trends and the merging of technology and financial services. During the pandemic, I left Coface and started researching fintech either to join a project or start my own. I was fascinated by CIAL Dun & Bradstreet for being well capitalized, investing heavily in technology and data science, and focusing on its services for any fintech company. We have a product that we deliver through technology platforms that any company can incorporate into a fintech or traditional credit model. Another thing that interests me about the company is the size of the Mexican and Latin American market because it was underserved. However, due to the pandemic, technological adoption has accelerated through these business models.
Mexico is our largest market in Latin American, followed closely by Brazil. The third reason I became interested in the company was because of its purpose. It goes beyond return to investors or capital and has to do with helping the development of Latin American economies. It is a company that can have a major impact on trade, movement, and business growth. We are fully committed to the Mexican market. We serve all industries. Our product helps when it comes to seeking credit, though we serve all sectors. One of the main ones is finance, though we also work in manufacturing, service industries, and construction, among others.
Credit and regulatory services. Many often confuse Dun & Bradstreet and CIAL Dun & Bradstreet. The first is a huge global company. Several years ago, the company devised a strategy to divest its international operations and sell them to stocks, that could give more attention to international markets. They achieved it with 15 operations around the world but kept them close through a long-term licensing scheme. These partners have the right to use their framework and database that we all share with millions of international companies. From that sale, CIAL Dun & Bradstreet was born. We were born as leaders in Latin America, but also with the competitive advantages of Dun & Bradstreet. We have an unparalleled database, a powerful brand to seek out the companies we are investigating, and technology and products that give us a powerful base for further growth. When we bought and created CIAL, the shareholders took a new approach to Latin America, and we started to make changes around two axes: investment in technology and people. We went from a traditional model to a company with a technological platform where data providers and users interact. Thousands of companies, mainly SMEs, come to us every year to obtain credibility reports. We offer a D-U-N-S number that gives them the certification of establishment and credibility worldwide. Through our platforms, they extract raw data and create their analytics, ratings, extract tools to create and filter credit policies.
In a company, research is more traditional as there is public data through data science. This is cost-effective in Mexico, as the public data structure is lacking. We have about 60 analysts calling companies and analyzing them. That brings us to product verticals. Our value offering is focused on four verticals, and we are about to create a fifth one. The first is information data for use in sales and marketing. Many companies in Mexico buy hoovers to define their market, segment it, classify companies, and do targeting. The second vertical is credit, and we have multiple platforms from a framework contract to a host-to-host solution where large financial institutions can access our databases, acquire business data, and initiate it into their own systems, algorithms, and everything in between. Industrial companies that consume customer data and make commercial credit decisions use our CIAL 360 platform. The third vertical is compliance. Basically, the type of information that our clients buy is information that enables them to be conform with regulations, avoid tax evasion, and so on. The fourth vertical is supplier. It is the same as credit, but in reverse. As a result of the pandemic, there has been a massive supply chain disruption. All the great buyers have to continually verify that they are not running out of product. We do a supplier registration, but we are part of the investigation. We do the work for the great buyer, and every supplier carries a verification.
We have the most important ones: large manufacturing companies and food and beverage companies, among others. Companies can have thousands of suppliers, and many of them may be small, and companies need to know if they have a legal establishment. As a result of the Mexican Anti-Corruption Law, one can be responsible due to ignorance.
It is a product that evaluates companies in terms of their compliance with sustainability, defined as environmental, social, and governance (ESG). ESG is becoming increasingly relevant in decision-making by investors and the regulatory authorities, among others. We, together with Dun & Bradstreet, decided to create a product to measure payment compliance. We would be the only company to offer this service in the country. In Mexico, banks hire small consultancies that evaluate the company. We want to make it accessible, scale it, and lower the cost in order to obtain the ESG of any company. In the US, sustainability is more common in all areas. As Mexico has a strong link with the country, both need sustainability knowledge, which is why we decided to launch the product simultaneously. It will be extremely promising and will have a positive impact on the economies where we work. The biggest challenge is to measure ESG, to understand who is responsible, which industry is better than another, and so on. Those are the indicators we are trying to define through the amount of data and algorithms we have.
The time of the Mexican and Latin American market is favorable for our business. We can help provide certainty when making decisions in a difficult and volatile economic moment. In addition, technological adoption favors our products. We started growing in 2016 at 15%, but this year we will grow at 40% and the next years at 40-50% as the market, product, and demand outlooks are favorable. Our top priorities for 2022 are launching the ESG product; strengthening our credit platform product offering, where we are migrating to a much more automated data software model; and our material role. We are investing money in data science with technologies that did not exist before. Mexico does not have just one source of data, but three to four that provide us with what we need. It is necessary to apply technology, cleaning, and comparison of data that a human cannot do on a daily basis. The goal is to improve our coverage and data management. We have about 1,100,000 companies with data in Mexico, but we want to increase our coverage to 2 million SMEs.
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