MAF Finance a rising star in Middle East consumer credit with SAS® Enterprise BI Server

Dubai-based Majid Al Futtaim Finance is one of the most innovative and agile consumer finance companies in the Middle East and North Africa region. It has a clear vision and strategy and, largely thanks to SAS Enterprise BI Server, the ability to make the right decisions at the right time.

Across the company, MAF Finance uses information that SAS delivers, with reports viewed by CEO Rasool Hujair, his management team, board and shareholders.

Regional mall pioneer
Established in 1992, the Majid Al Futtaim (MAF) Group is best known as the pioneer of regional shopping malls and hypermarkets. It welcomes more than 107 million customers a year and its flagship mall, the Mall of the Emirates in Dubai, is one of the largest in the world. Its hypermarkets arm is a joint venture with the world's second largest retailer, Carrefour.

Since establishing the group's consumer-finance company, MAF Finance has issued 100,000 credit cards and continues to grow.

That's no mean feat considering the economic situation and the fact that the UAE is the region's most mature market, with around 3.7 million card users and a card density of about 0.7 per capita. In addition, MAF Finance issues gift cards for use in its own shopping malls.

Clear vision, big advantage
Hujair has served as MAF Finance's Chief Executive Officer since its founding. A Bahraini national and credit-card industry veteran with decades of experience, Hujair previously held several management roles with American Express and its regional partners.

Hujair also brought to Majid Al Futtaim Finance a clear vision about what it takes to succeed in this business: knowledge of the customer base. "As a new entrant and a startup company, we had one big advantage: We had no legacy IT infrastructure, which meant we were free to choose the best solutions to meet our needs," he says. "In particular, we could select the best business intelligence software.

"Business intelligence is of critical importance to a credit-card issuer for answering questions such as 'who are my best customers?', 'which offers will appeal to which customer segments?' and 'how can I get customers to use their cards more often – and spend more?'" Hujair adds.

Hujair believes that lack of viable information is a constant challenge in consumer finance marketing. Overcoming this challenge is the key to success in a competitive market.

"Every credit-card operation runs on information in the transactional systems," he says. "But this is not information that you can use to support decision making. It is just too vast, and each piece of information relates to specific transactions. So you must extract the information and transform it into something useful."

Predictive capabilities are key
MAF Finance extracts data from the operational platform and loads it into SAS.

"Choosing SAS was an easy decision to make," says Hujair. "It met all of our requirements. First, it is more flexible and versatile than any other BI solution. Second, and perhaps most important, SAS allows us to predict future behavior based on statistical analysis of historical data. Of course, we looked at other solutions also, but we found that these packages only give you a rear-view mirror. And the third reason is that, despite its rich functionality, SAS is incredibly easy to use, even for non-specialists."
The eight-month implementation vindicated the decision, Hujair says.

"SAS always delivered on time and the project team was very committed to our success," says Hujair. The solution includes an ad hoc reporting platform in an easy-to-use dashboard environment.

The main application areas for SAS at MAF Finance are "know your customer" demographic analysis, risk profiling and behavioral analysis.

In the UAE, whose population is 80 percent expatriate, demographic analysis is particularly interesting – and valuable. Much of MAF Finance’s promotional activity is based around nationality. For example, it runs many campaigns around  local events such as Eid and other expat festivals such as Diwali.

MAF Finance wants to be sure that such promotions go only to the appropriate recipients. Similarly, some campaigns should focus only on customers in particular age groups or income brackets.

Risk profiling is helping the company to classify customers by the risks they present – like missing payments or paying only the minimum due each month. Risk profiling also helps to identify which segments are most profitable – in other words, which customers MAF Finance should actively seek or avoid.

"We already have the capability for predictive risk profiling and credit scoring on an individual who has applied for a card, but it will only go live once we have built up 24 to 36 months' historical data," Hujair says. "Then we will have a solid basis for such decisions."

The right incentive for the right customer
Behavioral analysis focuses on where customers spend their money, in what industries (education, travel, retail, utilities, etc.) and how much they spend.

Without knowledge of the customer, offers are generic rather than targeted; there is huge waste and customers can be alienated. Moreover, market research is expensive and often flawed. However, if you can base your offers on actual customer behavior you can make them feel cared for while boosting your profitability. Hujair offers a couple of pertinent examples. His analysts found that customers could be divided into three categories: those who never used their cards when shopping in Carrefour, those who only used their cards when shopping in Carrefour, and those who use their cards both in Carrefour and elsewhere, who are the most profitable.

"By segmenting the customer base along these lines we could incentivize the first group to use their cards in Carrefour and the second to use their cards in other outlets. The net result was that customers benefited from the offers and we saw a significant increase in card usage."

MAF Finance used the same segmentation approach to identify and incentivize customers who were only using their cards online – for example, to pay for utility and telephone bills – or only for non-online purchases. By understanding and influencing customer behavior, the company achieved a dramatic increase in use.

Partners are impressed
Effective segmentation is also a huge selling point when MAF Finance talks to prospective business partners.

"For example, if we are working in partnership with very high-quality jewelers, they want to be sure that their campaign is targeted only at very high-income customers – not just because this will make the campaign more profitable, but also because it protects their brand integrity," says Hujair.

"Our board, partners and investors have been very excited at the effective use of customer information at Majid Al Futtaim Finance. We are in a position to provide all of the information they ask for. We are a relatively new company, but thanks to SAS, we have won their confidence that Majid Al Futtaim Finance is the rising star in our industry."

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