Group CEO of Kuwait Finance House (KFH), Mazin Saad Al Nahedh said that KFH operates in different jurisdictions, including Kuwait, Turkey, Germany, Malaysia, Bahrain, and KSA. Throughout those locations, the growth trajectory for each economy is different.
Al-Nahedh added during an interview with The Business Year Magazine (TBY), that in Kuwait KFH focuses specifically on infrastructure projects, primarily in the oil and gas sector in addition to financing trade-related business. He said: “We provide most of the corporates with the necessary financing requirements when they import goods. In addition, we focus on the large corporate sector that has not been banked by KFH in the past. We take market share from other banking participants, which helps the general growth of KFH on the corporate and SME sides.”
Al-Nahedh continued: “On the retail side, KFH enjoys likely the largest customer base in terms of numbers; we are the second-largest bank in Kuwait and the largest Islamic Bank. Our strength lies in our retail portfolio and the diversity of our deposit base. This is primarily driven by KFH being the only Islamic bank upon its establishment in 1977 up to 2003.”
He said that KFH has been in the market for much longer than the rest and has extensive experience and know-how in Islamic banking, as it has been one of the pioneers driving that movement forward. KFH is the only Islamic bank that offers -as part of its sustainable development goals and financial inclusion pillar- female-only branches to cater the needs of an important part of the population.
With regards to KFH digital transformation strategy, Al-Nahedh said: “The digitalization strategy started about four years ago. Each of our eight KFH business lines had its own system managing the same customer base; the same customer would reside in multiple databases without any links. We therefore changed our system into a relationship-based approach rather than a product-based one and segmented our customers based on their business activity. The objective is to better manage our customers’ wealth and facilitate their transactions. This also ensures the quality of service we provide. On another level, we implemented robotics to reduce the process time for time-consuming applications such as onboarding. With our new systems, we reduced processing time by a third. That frees up time for our employees, who can be more productive and serve customers better. We also made significant improvements to our mobile banking app that cover almost 90% of the services a branch can provide. We just launched a concept called KFH Go, our new vision for what future branches should look like on a self-service basis. Those branches’ footprints are about one-fifth of the existing branches’ footprints, which drastically diminishes rental costs and overheads. This is a full-fledged electronic branch that does roughly 90% of what one could do in a branch. Currently, KFH has two KFH Go branches. We will have 10 electronic branches that we will be installed in 2019 and 2020 so that we can have 24/7 banking available to all our customers in key locations.”
He added: “We are looking to finance the solar farm project built by KPC. Finally, there are plans for new cities in the north and south that will be developed through the PPP structure. We see those projects coming to completion rather than just being tendered; once complete, the infrastructure would be ready, the city will start flourishing, and activities will begin. In the oil sector, there are hundred billions of dollars of projects over the next five years that involve LNG and the improvement of upstream and downstream processes through the fourth refinery, which is one of the key projects that will be introduced. Another main factor will be the urgency of completing the national plan, and as long as oil prices go above USD60, there is less urgency.”