Flux Financiera: Becoming a leader in factoring through digital transformation

"The moment they click, everything that used to take one or two weeks happens instantly. That was a radical change, and they love it."
‍Ignacio Usobiaga_{, CEO of Flux Financiera}

Factoring is a financial service where speed in disbursing credit funds to clients is essential. Unlike traditional loans, the money a financial institution lends is used almost exclusively as working capital to keep businesses running day-to-day. However, the industry has a very rigorous regulatory system that creates friction with the client from the very beginning of the relationship.

Ignacio Usobiaga, CEO of Flux Financiera, a factoring company, told us in an interview that "For someone who needs the money now, having to send all the documents by courier, realizing you're missing a bank statement, and having to send everything all over again"—even more so, Ignacio added—"it started to become a draining problem; it’s starting a relationship on the wrong foot, it’s an economic inhibitor."

For Ignacio, this slow "paperwork" was unacceptable, so they decided to rely on information technology to streamline their processes. The effort paid off, and the changes implemented have made Flux one of the fastest and most effective financial institutions in the sector.

The opportunity in the world of factoring

The factoring industry, like many others, has been slow to take the step forward to combat one of its most significant problems: the excessive time and volume of paperwork required to approve each transaction.
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Although the digital age began several years ago, many traditional financial institutions remain hesitant about digitizing their processes. While technological advances move quickly, the financial industry is particularly conservative (and for good reason, as a process failure can have serious financial implications).
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Despite this industry-wide "fear of change," it has always been clear to Ignacio that transformation is vital for financial companies. In his words, you must "provide certainty and visibility to the factoring product by leveraging technology and simplifying processes."
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This pioneering attitude is what has made Flux one of the first factoring companies to implement advanced electronic signatures into its operations. In doing so, they have managed to overcome the inherent problems of their industry and laid the foundation to radically transform their company through digitalization.

"It’s a simple process now that you can literally do from home—you can even do it in your pajamas."
‍Ignacio Usobiaga

Digital transformation

The financial world hasn't changed much in the last few decades. However, Flux's leadership had a goal in sight: to become a fintech company that would revolutionize the traditional way of doing business.

‍As expected, resistance to change appeared immediately, both inside and outside the organization. Often, the most resistance to change is found within companies themselves.

When asked how he faced this problem, Ignacio commented, “You can’t preach without practicing. The first person to sign, the first to trust in this technological world, must be the person trying to lead it there.”

He also had to do some convincing with his clients, although it turned out to be surprisingly easy. “After two interactions with the process, once they see that there is a pleasant user experience, they quickly start to enjoy it,” he said.

‍And here is the key to the Flux case. Something that seemed like it would be very difficult to implement only took a couple of interactions.

‍In reality, the processes remained the same. “There is no significant entry cost. It is exactly the same procedure,” Ignacio told us, “you just don’t hit print.”

In this way, the process that used to take days—exchanging papers, printing, making copies, waiting for the courier—and hoping no one forgot their ID!—and signing dozens of pages, became an online process that takes minutes instead of days.

“Now it’s a simple process that you can literally do from home; you can do it in your pajamas,” Ignacio told us. “As long as you have a signal on your phone, you’re signing.”

The power of electronic signatures

The most interesting case where they had the opportunity to prove the capabilities of electronic signatures involved a client with a unique situation.

The client—due to the nature of their business—is located outside of Mexico City and had to plan all their factoring processes more than two weeks in advance to receive credit on time.

“They noticed they had this need; they needed to forecast how much they would require,” Ignacio commented. Furthermore, due to the nature of the business, the legal representative was rarely in the office, which meant that when they were finally present, they had to “sit for 2 hours and sign like a senator.”

Now, the legal representative can use their FIEL to sign from anywhere.

This process solidified trust in Flux, turning the client into a loyal advocate for the financial firm. “The moment they click, everything that used to take one or two weeks happens instantly. That was radical, and they love it,” he said. “If I tell some clients that I’m going to change back to the old paperwork, they tell me, ‘I’d rather pay more, just don’t make me do that.’”

‍Being open to change and effectively leveraging technology has made Flux one of the fastest factoring services available to companies throughout Mexico, not just in Mexico City.