Covalto went from being a fintech to a digital bank with the goal of transforming the way small and medium-sized enterprises (SMEs) access financial services in Mexico. The institution combines the technological agility of a startup with the regulatory strength of a bank.
The change represented a process of learning and consolidation: “The biggest challenge was to integrate the fintech culture with the regulated structure of the banking system, maintaining innovation without losing formality,” explained Sergio Arias, Covalto’s Chief Operating Officer. The key, he says, was to “keep the best of both worlds.”
The birth of Covalto as a bank consolidated the merger of two institutions with the same vocation of financing SMEs. This approach made it possible to create a platform that is more robust, secure and closer to entrepreneurs.
Unlike traditional banking, Covalto eliminated physical branches and passed on the benefits of this operational efficiency to its clients. With lower structural costs, the institution offers competitive rates and a 100% digital experience to contract credits and manage accounts.
“We want to be the financial ally of SMEs. More than 50% of businesses in Mexico belong to this sector, and we accompany them from their early stages of growth,” Arias said in an interview with Contxto. Since 2016, Covalto has built long-term relationships with entrepreneurs who have scaled together with the bank.
The right use of technology
Covalto’s growth has been steady. Today it offers digital financial services, an intuitive app and online banking that adapts to each client’s profile. Its vision is to be “wherever the entrepreneur needs it”, whether from a cell phone, a computer or through personalized attention.
In the medium term, Covalto plans to consolidate its position in Mexico before exploring new markets. “We want to continue to play a leading role in SME lending and strengthen our digital infrastructure. This country has enormous potential and we want to continue growing here,” said Arias.
The executive stressed that the success of the model lies in balance: “A bank must balance assets and liabilities, take care of risk and maintain profitability. But above all, it must understand the client. At Covalto, that customer is the Mexican SME that drives the country’s economy.”
In addition, security is a priority because Covalto’s app and online banking have perimeter protection and advanced authentication systems that guarantee that each user is who they say they are, thus strengthening trust in their digital channels.
With products to boost SMEs
Among its main products are structured loans and factoring, tools designed to provide liquidity and working capital to SMEs. These solutions make it possible to advance income or finance projects without compromising the financial stability of businesses.
Covalto also works hand in hand with development entities such as Fideicomisos Instituidos en Relación con la Agricultura (FIRA) and Nacional Financiera (Nafin), promoting projects in the agricultural sector.
“The countryside is a key component of the Mexican economy, and we want to continue supporting agribusiness companies with responsible financing,” says Arias.
On the technological front, the company retains its essence as a digital company. Data security and operational efficiency are priorities. “We were born with a technological DNA. We use artificial intelligence and advanced analytics to optimize processes and make more accurate decisions,” the executive explained.
Covalto maintains an alliance with Google to enhance its technological infrastructure and optimize its processes through the use of artificial intelligence. “This collaboration allows the institution to improve its operational efficiency and pass those benefits on to customers through more agile and cost-effective products,” Arias explained.
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