Success Stories

Ijarah Finance builds a new era of digital lending for Saudi Arabia

Riyadh, Saudi Arabia

At a Glance

●  Reduce onboarding to loan application completion to 5 minutes from days

● 40% lower operational costs

● Time to launch new products to market cut by third

● 25% increase in customer base since launch

● 80% improvement in workflows and efficiencies

In just over a decade, Ijarah Finance has become an established part of the Saudi financial landscape. It provides Sharia-compliant integrated financial leasing services to 50,000 customers across the Kingdom, growth that has been built on a commitment to honesty, customer service and innovation. Now, these values have been applied to ‘Mora Finance’ a new digital lending platform built in partnership with Temenos. Mora’s easy, fast, and safe financing solution has attracted more than 10,000 registrations in four months, since launching in March 2023. It includes cash loans and product financing; with other business products to follow later in 2023.

Empowering citizens

Launched in 2016, Saudi Arabia is now well into its ambitious ‘Vision 2030’ transformation. Digitization is at the heart of its broad commitment to modernize every aspect of the Kingdom, and personal finance is fundamental to that plan. Citizens who are more able to access financial services and loans become more powerful consumers, and in turn support the shift to a consumer-driven and entrepreneurial economy.

Ijarah Finance identified this and has developed a new, fully automated personal lending platform. Named ‘Mora’, it is the amongst first wholly digital lending solution in KSA and offers customers the chance to apply for and secure personal loans in less than five minutes. That speed is partly enabled by the Kingdom’s move to democratize its data, meaning financial companies such as Ijarah can tap into national databases that record an individual’s income and credit history. But access to data is meaningless without the technology to fetch and process it. For this, Ijarah selected the Temenos Banking Platform to build Mora on top‌ of.

The result is the Kingdom’s first fully digital loan application and approval service. So far, 5,000 Saudi citizens have secured loans via Mora, while registrations are forecast to more than double by the end of 2023, reaching 25,000.

Though a digital solution, Mora is also appearing on shop floors, as in-store product financing agents advise customers to download the app rather than join the hours-long queues to submit their paperwork in the traditional way.

Retail customers can now just head to the till with their Mora app, show their loan approval, and walk out with their product. It’s a better customer experience for them, and really efficient for the retailers too.”

Jamshed Afzal, Chief Technology Architect at Ijarah Finance

A platform for now and the future

Mora is the first solution that Ijarah Finance has built on the Temenos Banking Platform. Indeed, the partnership, which began in 2021, was prompted by the shortcomings of the company’s previous technology stack. Unlike Temenos’ unified and composable platform, Ijarah Finance had relied on a complex integration of multiple vendors. That stilted innovation, and so Ijarah’s ability to launch new products efficiently.

“The best part of the Temenos platform is that it is one single, fully integrated, core banking solution. Everything is all in one box.” Jamshed Afzal Chief Technology Architect, Ijarah

Mora has been built using Temenos’ core banking and digital services, with Temenos XAI about to be deployed too. These solutions have not only aided the development of Mora, but also give Ijarah access to other capabilities and services that they can switch on anytime in the future. For example, Ijarah has also invested in Temenos Payments Hub, with a view to developing payment processing services in the future; and is also exploring Temenos Financial Crime and Mitigation (FCM) and native analytics tools.

The Temenos platform is so enriched. You never have to look for additional software to fulfill a requirement. Rather, the solution itself provides the answer.”

Jamshed Afzal, Chief Technology Architect at Ijarah Finance

Imagination is the only limit for Ijarah. The API architecture of the Temenos Banking Platform has consigned intricate and costly integrations to the past, while the customizability and extendibility of modules allow Ijarah to build highly personalized customer experiences and flex to evolving regulations. 

“Every country, even every bank in a country, has its own needs. A rigid platform creates overheads and compromises, whereas the Temenos platform can be easily configured. So you become fearless. You always know that you’re going to be able to adapt to local and organizational needs” Jamshed Afzal Chief Technology Architect, Ijarah

The result is a newfound agility and scalability that will become increasingly important as Ijarah looks to build out Mora with new features and create new products and services that they can bring to market at breakneck speed. These benefits will become amplified when Ijarah migrates Mora to the cloud version later this year. That had not been possible earlier because of the Kingdom’s strict data sovereignty laws and the absence of a public cloud hyperscaler. But with the Temenos platform agnostic to deployment environments, this did not delay progress. Mora was launched on-premises, and Ijarah was then able to make the decision to move to Oracle cloud as soon as an infrastructure option became available.

Trust in the tried and tested

When you’re building a product designed to transform a nation, you don’t want to leave anything to chance. This was one of the principles that brought Ijarah to the doors of Temenos.

Scale without order can be complex. Whereas other global technology companies are little more than a loose amalgamation of disconnected services, Temenos is a single entity—a unified platform of integrated and complementary solutions, all accessed via a single API connection. Put simply, this makes things work easily. Mundane and repetitive tasks are automated, reducing development and operational workloads. Data can be leveraged between applications, with these insights used to deliver superior customer experiences. All the while, costs and lead times come down, cutting the time to market for new products, and ensuring new revenues are realized faster.

The success is in the numbers

Ijarah has seen an immediate return on its partnership with Temenos. Average loan approvals are already running at a higher conversion rate per day, and are expected to ramp up by 4 -5 folds per day by autumn 2023. Speed has been a key driver. Previously, it took new customers days to register and apply for a loan, leaving many frustrated (some of whom will have abandoned their application). Today, new customers of Mora can go from initial onboarding to loan confirmation in less than five minutes, all from the convenience of their mobile device (Ijarah will be launching a web version of the Mora app later in the year). And more are doing just that—Ijarah has seen a 25% increase in its customer base since launching Mora.

More customers at less cost is another key takeaway. Operational spending is expected to be reduced by 40% in year one, a combination of automating processes, consolidating systems, and outsourcing maintenance. In turn, Ijarah has more budget and time to deploy to new ventures, and importantly, more inclination too. It now takes them around one month to develop and push new features and products to market, just a third of the time it took before.

“Previously, we had to write code for everything. That code had to be tested. With Temenos, integrations are low code, so everything is accelerated. This has given us a big advantage” Jamshed Afzal Chief Technology Architect, Ijarah

This improved proximity from the design to the revenue stage emboldens the appetite for innovation and enables action. Ijarah reports that workflows and efficiencies have improved by 80% since partnering with Temenos. A credit card and e-wallet are the next products that Ijarah is now developing and will deploy on the Temenos Banking Platform by the end of 2023.

All these markers of success combine to improve profitability, with a 40% increase in the return on equity.