On February 4th, Xavier Durand, Coface’s Chief Executive Officer, had an insightful intervention during Gipfeltreffen der Weltmarktführer in Germany, an event that has an indisputable reputation of being the “Davos of the German SME sector”.
How to drive for success in 3 clear-but-not-all-so-simple steps
We took the opportunity to ask him a few questions related to his stance on the occasion: “The bold days of international trade are not over and Europe still has a strong word to say.”
The world is continuously changing. Nothing new with that. So, why do we feel it differently these days?
The world is changing at an incredible fast pace and in ways we may have not imagined a few years ago. The world we face today has nothing in common with the world we grew up with: extreme acceleration, unpredictability, uncertainty. Around us order seems to be gone, rules do not apply anymore. Clearly, what got us all here, won’t get us further.
Businesses are holding off, development decisions are pending. Is this the right thing to do?
Indeed I confirm that we see this suspension, we see the slowdown in investment decisions, as the level of risks is increasing and the insolvencies level is hitting historical heights. The dynamics may be different, but a lot of things are still moving forwards at the moment. Some are even tempted to say that globalization is over. But global trade continues, globalization is not dead; it is being reshaped.
Trade continues to grow, economies remain interconnected, and companies operate in a world where global dynamics shift abruptly. These days I was genuinely impressed by the energy, creativity and innovation mindset of so many German companies. It is a vivid reminder that Europe has a remarkable reservoir of industrial and technological talent — a strength that continues to feed the momentum of global trade, which is very much alive.
But many companies do the same things as before. And all they think they know about risk management does not work anymore. The way business is done today is totally different, very fast paced due to AI and digitization, hybrid working models, fast exchange and so many others.
We need to adapt and reshape the way we do business. We need new ways to cope since global trade continues to grow and is at an all-time high, economies remain deeply intertwined, trade flows are being reconsidered and reorganized. A lot of things are moving at the moment.
And yes, globalization is still there, too good to go away, challenged but not dead, and Europe still has a strong word to say.
So, the correct question should be not if we stop or move forward, but how to manage business with all that going on. How do you do that?
This is what I have done managing 720 billion-worth risks:
We have “reinvented” ourselves over the last 10 years to grab the opportunities that digitization offers. And this not a clichee, as it stands for tripling our IT investments in the last 10 years, tripling our teams in DataLab and IT, getting ahead of the tide-that-lifts-all-boats with AI innovation.
We still leverage on our deep international credit risk expertise but augmented by data and technologies. These has facilitated a threefold reduction in response time, 30% more credit decisions per day.
And we share our intelligence through Coface Business Information, enabling 15,000 companies to manage their risks globally. With 1 request answered every 5 seconds, we bring confidence to business decisions, through clear, real time and predictive insights.
Can you share one of our customers’ success recipe?
I would mention the example of a famous German multinational company, doing business for decades. They managed their risk in the past by decentralized decisions in over 50 countries, based on local data, different scoring methodologies & models, data only partially integrated in the systems and it’s been clearly difficult to compare globally, with too much time & resources needed.
We met them as they were looking for a harmonized, digitalized solution, with higher quality data (up-to-date, predictive data), API solution integrated in their CRM /ERP and, not the least, attractive pricing.
We could answer all these needs: an integrated solution based on expert data helping them to anticipate and access risks around the world in a completely new and effective way, saving time, being more accurate, more efficient. We empowered their decisions going forward.
As a conclusion - since we promised the reader “How to drive forward in 3 simple steps” - what is your message to the business community in the middle of such a wild context around us?
At Coface, we see risk not as reason to stop but as something to anticipate. Yesterday’s recipe cannot be tomorrow’s remedy.
So, my answer in 3 but not-all-of-them-simple steps is:
- Focus on short term execution
- Dare to innovate and invest
- Don’t rely on one scenario, you need to define more
In such moments of extraordinary changes, you need to know you can rely on a close partner to reshape your perspective on trade risks. And I have 100% confidence in our Coface Business Information solutions, as we are using the same data ourselves when deciding to cover our 720 billion exposure in trade credit insurance.
