Electronic Banking Shaping Future of Financial ServicesTue, 09/01/2015 - 10:59
Q: How is Banco BASE’s business model structured and what kinds of financial services does the bank offer?
A: We operate based on a business to business model, but we also serve individuals related to those companies. Banco BASE is divided into three business categories: foreign exchange and derivatives, which is a service that we have been offering for the past 29 years, diversified investments, which we started eight years ago, and our lending arm, which is the newest part of the bank. The latter provides products such as simple loans and financial factoring for suppliers, which can be granted thanks to our relationships with development banks, such as Financial National (NAFINSA), Bancomext and Instituted Trust in Relation to Agriculture (FIRA). Over the last two years, we have invested a large amount of funds in improving our electronic platform. After exhaustive research among the most successful electronic platforms already on the market, we identified ten areas for improvement. Subsequently, with the help of our IT department, we turned those opportunities into a reality. The result, BASEinet, allows our clients to operate with seven different currencies, such as US dollar, Mexican peso, Canadian dollar, British pound, Euro, Swiss franc, and Japanese yen. The accounts we offer through BASEinet are completely online and electronic, innovating the way people access their financial services, and leading to an increasing appetite to use them. We were authorized to become a financial group in February 2015, namely Grupo Financiero BASE, which is constituted by Banco BASE and Casa de Bolsa BASE, our brokerage firm. At least 25% of our customers are Tier 1, Tier 2, and Tier 3 companies, as well as many other manufacturers. We are constantly researching and analyzing information that helps us to understand growing sectors, which includes determining which ones are neutral and which are stagnant. The automotive sector is one of the top three sectors in the country right now, so it is highly sought after by our commercial department.
Q: Considering the global roots of many OEMs and Tier 1 suppliers, to what extent do these clients take advantage of your specialized foreign exchange services?
A: Our 200 executives only serve 40-60 clients each, offering a personal approach that many of the larger banks in Mexico cannot offer. It also allows us to execute our cross-selling initiatives, offering access to many more of the services that we provide and making us a much stronger choice for any automotive company. Judging from our 29 years in business, this has proven to be extremely successful. Our derivatives and foreign exchange products are the most popular among our clients as we have been offering them for a long time, but nowadays many clients are moving toward our electronic account and loan services too. For example, one popular product is the FxLoan, which is a flexible online product that meets our clients’ needs in terms of payback schedules.
Q: What is the main reason for the growth of the Mexican automotive sector according to Banco BASE?
A: Opportunity. The US was producing vehicles in China and other countries, but stopped expanding production in those regions and identified Mexico as a competitive production location with a capable, intelligent, hardworking, and cost-competitive labor force. When this is combined with the country’s proximity to the US, it creates the perfect storm. In addition, OEMs from other countries, such as Japan, began to recognize our country as a viable option, while the Mexican government is doing its part to attract and anchor these investments.
Q: What are your goals and objectives for 2015, and how do you envision moving Banco BASE forward?
A: I intend to increase the workforce in our Mexico City office by building new teams for personal finance and investment, as well as continuing growing the loans and credit parts of the bank. We have reached a total of MX$1.6 billion (US$106.7 million) in lending at this time, and we expect to reach MX$2.4 billion (US$160 million) by the end of 2015. With more than 13,500 clients and 595 employees, we are still planning to grow by at least 15-20% before the end of 2015, especially in Mexico City, but also in Leon, due to the growth of the automotive industry in this area. We really want to make all of our services internet-based, instead of being branch-based like many large banks. This is key to reducing overhead costs and being able to offer more competitive rates to our clients. Many younger customers already have the mindset that internet banking is the way forward. This new generation wants a faster, more efficient and completely accessible service.