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BASE

MEXICO - Finance

Julio Escandón

CEO, Banco Base

Bio

Julio Escandón has been Managing Director of Grupo Financiero BASE since 2019. From 2007-2019, he was CFO of Grupo Financiero BASE. He studied economics at Instituto Tecnológico Autónomo de México (ITAM) and holds a master’s degree in economics at Cambridge University. Escandón attended the CEO management program at Northwestern University – Kellogg School of Management and the CFOs executive program at University of Chicago – Booth School of Business.

"The recovery process from the 1995 crisis helped us significantly."
Banco Base is optimistic about an influx of foreign companies entering Mexico with the nearshoring movement and aims to attract them via its personalized banking services.
How has the Mexican finance system positioned itself as a global reference?

The recovery process from the 1995 crisis helped us significantly. At that time, Mexico had a local finance system without foreign investment and a regulatory system that was not up to scratch, and everyone, including the supervisors, regulators, and banks, all learnt a great deal from that. Since then, supervision and the regulatory bodies have become stronger, and banks have started to align with global developments and standards. During the crash in 2008, we did not suffer as much as other countries, mostly due to the resilience of the Mexican banking system and the ease with which it continually adapts to new conditions.

What growth opportunities do you see for the system?

I see many opportunities in several areas. Over the last few years, and definitely since the pandemic, banking and many other sectors have realized the importance of digital processes and incorporating them into end-to-end processes for clients. This is the major challenge that everyone faces. Banks and fintechs still view each other as competitors, though we are starting to see clearer demarcations of our positions and roles. We are gradually viewing each other as part of an ecosystem, where fintechs can step in when banks have a weakness and vice versa. In addition, the authorities have given fintechs a level playing field to help them grow and encourage more competition.

How are you preparing internally for the large wave of foreign companies that will enter Mexico with the nearshoring movement?

We have had international trade in our DNA for 37 years now, firstly as an FX trader, then as a bank and finance group. This comes natural for us. We first experienced this in Mexico in the early 1990s when Mexico entered into the free trade agreement with the US and Canada, and since then such investments have been fairly cyclical; however, I am convinced that nearshoring is a unique opportunity for us provided by the geopolitical reconfiguration, although some of it is down to extreme events such as the pandemic and the Ukraine conflict. I see this as something that is here to stay and will grow exponentially. We are preparing ourselves to offer personalized services, which is also something that has always been part of our DNA. We offer agile, personalized, and transparent services. One of the big differentiators we offer is that we open bank accounts for foreign companies in two to three days compared to up to six months with most banks in Mexico. It is a complicated process if one does not have experience in this. We specialize in this and help provide foreign companies with a financial soft landing in Mexico. We have formed alliances with advisory companies in the fiscal, labor, and legal areas that also have knowledge and experience in working with companies investing in Mexico. We have also spoken to state governments, especially those that are more active in foreign investment. Basically, we are a one-stop shop that not only specializes in financial services but also helps to connect customers to other services they may require. Part of this strategy is to have an international team with people who speak the languages of these companies and understand their cultures.

Can you elaborate further on your plans to open a representative office in Beijing?

Our lawyers have advised us that the process typically takes around 10 months, and at the moment we are looking into the requirements of the Chinese government and what they imply, we expect to open in mid-2024; however, we already have over 200 Chinese clients and the projection is to facilitate the financial soft landing of the companies that plan to reallocate, we can open accounts in Mexico in a matter of days, making immediate international payments, and more to enable their operations in our country. Our clients value our agile, transparent, and personalized service, for sure we can quickly deal with whatever they need.

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