How Cordada is Using Data Science to Revolutionize SME Financing in Latin America

An Era Where Data is the New Gold
Data has become an invaluable asset for companies aiming to outperform their competitors in today’s digital age. One company that has successfully harnessed the power of data is Cordada, a fintech firm with a mission to democratize access to competitive financing for Small and Medium-sized Enterprises (SMEs) in Latin America. Utilizing a robust technology stack and sophisticated data analytics, Cordada is not just keeping pace with industry standards but setting new ones.

Value Creation through Data Analytics
Central to Cordada’s innovative approach is its mastery of collecting and managing a vast and varied dataset from many financial institutions and SMEs. This isn’t just a one-time effort; it’s an ongoing process that keeps the company at the forefront of the fintech industry. The data is sourced from multiple channels, including transaction histories, customer interactions, and market trends, to name a few.

Once collected, this data is funneled into the capable hands of Cordada’s Risk & Data Analytics department. Here, a team of skilled data scientists and analysts meticulously curate and analyze the data using advanced statistical models and machine learning algorithms. Their work doesn’t stop at data collection and analysis; they are responsible for transforming this raw data into actionable insights.

One of the key deliverables from this department is the creation of valuable data assets. These include real-time dashboards that offer a snapshot view of key performance indicators (KPIs), comprehensive reports that aid in long-term strategic planning, and ad-hoc analyses that can be quickly generated to address immediate business queries or challenges. These data assets are not static but dynamic tools updated daily, if not in real time, to reflect the most current data.

These assets serve multiple purposes. For the marketing team, it provides a better understanding of customer behavior to tailor more effective campaigns. For the risk department, it means real-time tracking of loan repayments and default rates and predictions about the probability of default on certain credits. For the executive team, it gives a 360-degree view of the company’s performance at their fingertips. In essence, these data assets are integral to the decision-making processes across various departments within the company, ensuring that every strategy is backed by data-driven insights.

By continually updating these assets, Cordada ensures that its teams are equipped with the most current and relevant information, enabling them to make timely and effective decisions. This data collection, analysis, and application cycle creates a sustainable value creation model that sets Cordada apart in a competitive market.

Investments and Processes that Utilize Data
Cordada’s commitment to leveraging data is evident in its significant investments in cutting-edge technology and data analytics tools. During my internship, I had the opportunity to contribute to the development of predictive models and machine learning algorithms aimed at risk assessment and management. These tools empower Cordada to offer a wide range of financing solutions, from USD 100,000 to millions, each meticulously tailored to meet the unique needs and risk profiles of the financial institutions and SMEs they serve.

How Value is Captured
The true genius of Cordada’s business model lies in its ability to capture value from its data analytics. By employing predictive models and developing Minimum Viable Products (MVPs) for real-time testing, Cordada can offer competitive financing rates while keeping default risks at a minimum. This dual advantage not only enhances Cordada’s market position but also fosters long-term relationships with its clients, thereby creating a sustainable cycle of value capture.

Challenges and Opportunities
Managing a diverse portfolio comes with its own set of challenges, particularly in the realms of data collection and analytics. However, Cordada has made significant strides in overcoming these hurdles through strategic investments in robust technology and a steadfast focus on data-driven decision-making. Looking ahead, the ever-evolving fintech landscape offers Cordada exciting opportunities for expansion into new markets within Latin America. Yet, this growth has challenges, such as adapting to varying regulatory environments and scaling its data analytics capabilities to match continually.

Conclusion
Cordada serves as a beacon for how data analytics can catalyze industry-wide change. By placing data at the core of its value creation and capture strategies, Cordada has not only carved out a competitive edge for itself but has also played a pivotal role in the financial empowerment of SMEs across Latin America.