Prosegur Sees Tremendous Opportunity in New Office NormalityBy Jan Hogewoning | Wed, 07/01/2020 - 10:58
Q: What has been the impact of COVID-19 on your business performance?
A: From a business perspective, some customers closed down manufacturing plants or lowered their scale of operations. While in some cases this led to fewer security demands, some clients also asked for more services. We have some customers in oil and gas and these are some very long-term projects where I do not see investment going away. Maybe it could slow down. In the automotive area, Mexico remains a strong country. We already have customers there and are looking at capturing new clients.
Q: What opportunities does the crisis provide?
A: We are finding a tremendous opportunity in helping customers return to their offices by creating safe environments. About 95 percent of office infrastructure today is still based on physical contact. The new safe office can include measures such as touchless access control by using facial recognition, for example. Offices can also offer a built-in temperature measurement for individuals. Cameras can use artificial intelligence to scan proximity and to see if people are wearing masks. Tech can also be used to control occupancy rates in small spaces. Prosegur recently launched a program called the COVID-Free Challenge, in which we engage with startups to find technological solutions for specific problems. One of these startups is Xandar Kardian, which develops instruments to measure micro vibrations. These instruments detect the number of people in a room based on breathing and heartbeat. This is not a final product yet, but we are partnering with the company to make it a reality in the near future.
For several years, Prosegur has been pushing innovation in areas such as artificial intelligence, IoT and advanced analytics through its strategic initiative called Gaia. To give you an example of how these technologies can be leveraged: Prosegur has over 100,000 guards across the world who interact with people, objects and locations. By applying advanced analytics, we can increase the rate of anticipation of security risks. In the future, a camera in a shopping mall will be able to spot behavior that correlates with certain prior incidents. Before something happens, you can trigger an action whereby someone is sent to that person to ask them a question, like “Can I help you?” or “Are you looking for something?” The idea is that we will be able to use tech to make our guards more productive and add greater value.
Q: What is the added value you provide to the industry?
A: Prosegur is made up of four entities: Prosegur Security, Prosegur Alarms, Cipher, which is our cybersecurity entity, and Prosegur Cash. Recently, resources were divested from Prosegur Cash in Mexico because the division was considered too small in the country. However, we have retained parts of that business.
Our No. 1 priority is to provide integrated solutions. This is something we call Integra, which starts with our guards, who are essential to our business. They work with digital systems, such as access control and monitoring centers. We integrate our services using best practices based on our experiences worldwide. Integrated solutions are really new in the private security sector. However, about nine out of 10 large companies are looking for an integral model. We want to take the window of opportunity that will present itself over the next 12 to 18 months to bring this to primarily large companies.
Q: How do you make your solutions financially accessible for companies with conservative budgets?
A. When we provide an integral solution, almost every single time we can provide a lower total cost of ownership. Today, many companies are paying one company for guards, one for cameras, and another for monitoring. An integral solution means a company has only one contract that manages all security matters, lowering the investment in physical guarding as many things become digital and automated. In several cases, clients have been able to reduce total costs by as much as 25 percent by removing inefficiencies in spending. Prosegur offers free consulting on a company’s security protocols.
Q: How do you factor the home-office trend into your operations?
A: This is a great point. I believe there will be more flexibility but not a 100 percent home office scenario. While home office can have benefits from a cost perspective, you do lose knowledge-sharing and relationship-building capabilities. All companies, including Prosegur, are going to move into a greater balance between conventional and home office schemes. At offices, there will be more flexible workspaces. This will require different things in terms of safety and distancing, such as rethinking desk placement and who you allow into the office.
On the other hand, home offices will need security that is equivalent or close to the corporate space and demand for this is accelerating. We are already working with large apartment developers that want state-of-the-art technology with sometimes the same level of security.
Q: What future do you see for the Mexican security industry?
A: Mexico has about 8,000 private security companies. However, 70 percent of these are clandestine. This basically means a person worked in security, has access to arms and decided to offer their services. Of the remaining 30 percent, about 60 percent of companies are informal. They do not pay social security, lack the right training practices and the right certifications. There are only a handful of companies that are qualified. If I were hiring security services, I would want my private security company to be like my family doctor. You want to have 100 percent trust in that provider. The fact that there are so many unqualified businesses out there can be a challenge as sometimes companies go for the cheaper option. There is a lot of work to do to professionalize the service. I would love to see strong competitors that have the right qualifications.
Despite the pandemic, we are in a position to maintain our double-digit growth expectation for this year and certainly next year. There is no reason why Prosegur cannot be three to four times what it is today.
Q: How do Prosegur’s operations differ between countries?
A: There are many synergies between countries. While understanding the differences, the similarities can be leveraged by learning from experience. In Peru and Colombia, we have about 8,000 to 9,000 employees, each. In Mexico, we have 2,500 to 3,000. The reason why our workforce is smaller in Mexico is because we decided to pursue an organic growth strategy in this country. In Colombia and Peru, we acquired local security companies and used these as a platform for growth. The sentiment is that the opportunity for organic growth in Mexico is considerable. The country is also next to the US, where last year we bought four companies, which we expect to use to strengthen our position in Mexico.
Right now, we are focusing on clients that really value companies with global capabilities and the right reputation. We love global service contracts. Our focus is more on the private sector, where we are working with financial service companies, banks, many oil and gas players, retail and automotive companies. Right now, we are not looking at growing our business in the public sector because we have so much opportunity in the corporate sphere. As to whether we will acquire a local Mexican security company, I would say at the moment we are confident about our strategy. We are differentiating ourselves, providing trust, global standards and innovative technology solutions.
Q: What relevant developments have you made in the area of cybersecurity?
A: Prosegur acquired a company called Cipher last year, which is a US-based company that provides managed services focused on cybersecurity. We decided to make Cipher a separate division of the company so we could focus greater investment on it. We are investing in it in Spain, Brazil and Colombia. While it can offer many services remotely, we are looking at the right time to introduce Cipher’s operations to Mexico.
Prosegur is a global security services company headquartered in Spain. It is made up of four entities: Prosegur Security, Cipher, Prosegur Cash and Prosegur Alarms