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Interview: Defending against Hacks and Eliminating Risks

April 17, 2019

Mexico’s FEMSA is the world’s largest independent Coca-Cola bottler and has three business divisions. Its trading division operates Oxxo, the largest convenience store chain in the region, with more than 18,000 stores in Mexico, Chile, Colombia, and Peru. This chain serves around 11.8 million customers daily. Its other businesses include logistics, cooling solutions, and plastic product manufacturing, among others. These figures place FEMSA at number 38 of the LT1000, the list of the 1,000 largest companies in Latin America by revenue and top of the list for the food/retail division, surpassed only by financial and oil firms.

With these figures and hundreds of points of contact with clients and banks, it becomes imperative to have a solid strategy of cybersecurity and innovation in the financial department to continue growing.

In this interview, we ask FEMSA Treasurer José Manuel Olguín about these topics, as well as new technologies and where the role of financial executive is headed in the future.

Q: What are you doing in FEMSA regarding security in the financial area?

A: We are looking at it from several points of view. One side of it is governance. Establishing the rules with which we have to operate, establishing controls and procedures across all areas, not just finance, reviewing who has access to the tokens, and how we communicate with the banks. We are looking at things such as systems that allow for all communications with the banks to be made through a single channel, as well as hiring third-party ethical hackers to be on high alert.

On the other hand, we are analyzing a greater centralization of the Finance Department.

The more points of contact there are with banks, the more likely there are hacks, in addition to the fact that hacks can often be carried out by people from within the organization.

Q: How is FEMSA innovating in the financial area?

A: We are working in two areas. For the Finance Department, we are looking at the latest market trends in artificial intelligence, analyzing topics such as finance management systems, which help us better manage our relationship with banks and suppliers, and even manage payments.

We are also analyzing how we can participate in the fintech industry. Since we are a consumer company, we want to see if there is a fit between the fintech industry and us.

In terms of company operations, we are keeping track of the latest trends. We can follow them through the websites of banks or management companies.

Q: Which of the current technologies, for example blockchain, do you consider to be the most important for a corporate financial area?

A: I see blockchain as being more developed and fit for financial companies. I think blockchain has opportunities, especially in payment transfers. An important issue for us in terms of innovation is to try to standardize our communication with the banks through systems such as MT940 (a format used by the SWIFT network to send and receive end-of-day bank account statements). This is very important, and it all fits in with cybersecurity.

Q: What do you consider to be the risks when implementing new technologies?

A: We are more conservative, but we try to have our servers and all of our communications with host-to-host encryption. We are still a step behind in things like blockchain, but we do see a great future for it. We are looking at it, especially if we want to participate in fintech, I think that’s where blockchain will stand out.

Q: How has the role of the CFO changed in recent years, and where is it going in the next five to 10 years?

A: It has been a 180-degree flip. It used to be about handling issues such as compliance, tax, accounting. But now external risks to companies have multiplied. Thinking about things like cybersecurity is now commonplace for a CFO, in addition to working capital management and managing international banking relationships and fintech. I think the role of a CFO has become more of an adviser to the CEO on these technology issues, with an increasingly greater understanding of their effects and risks in terms of compliance, financial statements, and cash security of the company. I see the role evolving toward things like big data and a thousand other things, because the Finance Department is really where all the payment information is combined or concentrated, and that information can be extremely valuable for the company and even for selling to third parties. But, it is very important to never forget that we must be an area that eliminates the risks to the operation, putting the company teams at ease when it comes to external macroeconomic variables, such as exchange rates, interest rates, or tax issues so they can focus on the problems we can try to solve, such as sales, providing a good service and a good product, and being close to customers.

This interview was conducted by Latin Trade for Council of the Americas.