Islamic non-bank financial institutions driving business with data analytics

A Saudi Islamic leasing company will apply analytical modeling across its business to enhance its decision-making process in the hopes of optimizing cost efficiency, maximizing revenues and managing risks effectively as earnings take a dive.

Al Yusr Leasing & Financing has engaged Dubai-based Qarar to overhaul its existing customer credit evaluation process into an efficient best practice risk decision-making process, driven by an advisory and data analytics program. Using data, Qarar will implement analytical modeling and recommend actions across multiple customer management decision areas, particularly proactive customer cross and up-sell areas as well as enhanced data-driven recovery strategies.

“We will be working together through a ‘Risk Program Partner Approach’ to ensure that an efficient origination process is successfully implemented and that Al Yusr achieves maximum efficiency and fulfils its credit management objectives,” explained Zaid Kamhawi, CEO at Qarar, who emphasized that this is particularly important at a time when many Saudi financiers are moving toward process automation and operational efficiency.

Al Yusr’s adoption of a data-driven approach comes on the back of weaker earning capabilities: in 2016, the Shariah non-bank financial institution experienced a painful drop of over 60% in net income from SAR222.79 million (US$59.37 million) in 2015 to SAR74.88 million (US$19.96 million) 12 months later.

The finance company said it hopes the new initiative would enable it to develop its growth plans and align its decision-making policies in a “progressive and sustainable” manner.

The leasing firm joins another Islamic finance provider, Bidaya Home Finance, in integrating a more systematic and analytical approach to business. Bidaya, backed by the Islamic Corporation for the Development of the Private Sector and the Public Investment Fund among others, earlier in May partnered with Qarar for its best practice credit risk advisory and analytical services.


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