About cookies on this site Our websites require some cookies to function properly (required). In addition, other cookies may be used with your consent to analyze site usage, improve the user experience and for advertising. For more information, please review your options. By visiting our website, you agree to our processing of information as described in IBM’sprivacy statement. To provide a smooth navigation, your cookie preferences will be shared across the IBM web domains listed here.
Home
Case Studies
Emkan Finance Saudi Arabia - Case Study
Kindling economic diversification through SME participation
How Emkan is delivering a digital end-to-end financing-on-demand solution to support SME growth in Saudi Arabia’s economic diversification drive
The Kingdom of Saudi Arabia's economy is transforming, diversifying beyond oil. In that shift, small and medium-sized enterprises (SMEs) are crucial, and their enablement needs easy access to incubators, accelerators and, significantly, funding. But how does one deliver this commitment relevantly and effectively?
Saudi Arabia is on a mission to diversify its economy per its government’s strategic plan, Vision 2030 (link resides outside of ibm.com). SMEs are crucial to realizing the plan, and the government aims to increase SME contribution to GDP from 20% to 35%. Through the Small & Medium Enterprises General Authority or Monsha’at, the government is creating a conducive environment for SMEs to thrive. This has led to a 25.6% increase in registered SMEs, including micro businesses, reaching 892,063 in June 2022 (link resides outside of ibm.com) compared to the fourth quarter of 2021.
As a result, the demand for funding by SMEs has increased in the country. SMEs have the challenge of finding a platform with easy and on-demand funding. Capital is crucial for SMEs to become market movers and maintain an advantage over their competitors. It is also a necessity to fund their business operations, invest in growth opportunities, innovate and create new jobs. Without easy access to financing, SMEs face the prospect of stunted growth, financial instability and missed opportunities. If the challenge of easy access is not addressed, it can have a negative impact on the government’s plan for increased SME economic participation.
Emkan Finance is a proudly Saudi Arabian fintech that is fully owned by Al Rajhi Bank—one of the largest banks in Saudi Arabia. Created in 2020, it has grown to become the leading omnichannel digital platform in the country, providing additional funding of up to 1.5 million Saudi Riyals. Additionally, the platform offers various financing options such as refinancing, auto lease, purchase financing and credit cards. It is a flexible, seamless, self-service platform that offers Saudis easy access to loans. With the rapid growth of SMEs in the country, Emkan identified an opportunity to expand its successful business model to meet SMEs’ financial needs. As an industry leader in the digital financing sector, it was in a prime position to capitalize on this opportunity.
Emkan partnered with IBM and utilized IBM Cloud Pak® for Integration technology supplemented by the IBM® Instana® solution to build a bespoke SME digital financing product—an industry-specific financial solution that offers SMEs easy access to financing. It offers fast loans across channels to SMEs at competitive interest rates without tedious paperwork and no guarantors and sponsors. Before utilizing IBM solutions, the SME digital financing product was projected to take 24 months to complete. After collaborating with IBM, Emkan was able to reach the market three times faster—a record time. As a result, Emkan became the first local and regional fintech to comply with Islamic financing laws to pioneer a digital product that addresses the financial needs of SMEs in Saudi Arabia.
Security-rich integration of mission-critical data
To address the growing financial needs of SMEs and expand its market share in the competitive SME funding space, Emkan set out to launch a digital financing platform to remedy SMEs’ pain points. The platform needed to be scalable and robust enough to handle the diverse financial requirement of SMEs at every touch point of their journey. One of the major challenges when building such a platform is having one-to-one integration, as such a setup can be a hurdle when the number of integrations increases. This is because managing multiple point-to-point integrations can become complex and cumbersome to sustain over time. Additionally, one-to-one integrations pose troubleshooting challenges when issues arise and have a lack of visibility and control—all of which were going to impact the time to go-to-market for Emkan’s product.
To overcome these challenges, Emkan consulted with IBM to find a suitable solution. “IBM recommended IBM Cloud Pak for Integration for us to build the architecture for the SME digital financing product. We found IBM Cloud Pak for Integration simplified the deployment, management and maintenance of our hybrid cloud environment,” says AlQahtani.
Emkan utilized IBM Cloud Pak technology to accelerate its modernization processes, establishing a security-rich connection of its mission-critical data from a variety of its systems and applications. Emkan was also able to establish a security-rich integration of both internal and external systems with key applications, including core banking, anti-money laundering (AML) systems, customer relationship management (CRM) and enterprise resource planning (ERP) integration.
To further enhance the user experience and journey on the platform, Emkan moved away from its current monitoring supplier and integrated IBM® Instana® to monitor the performance and health of its applications and infrastructure.
Personalized services and smoother customer experiences
Building the SME digital financing product’s architecture with IBM Cloud Pak for Integration and Instana achieved both quantitative and qualitative positive results for Emkan’s new SME offering. The SME digital financing product was effectively deployed ahead of schedule and Emkan achieved three times faster time to market. The product has seamlessly integrated with internal and external APIs, offering both market data visibility for personalized services and smoother customer experiences. Emkan now has the ability to meet evolving customer demands. This is achieved by continuously building and deploying applications quickly and efficiently to further enhance the product’s robustness and efficiency.
“Through IBM Instana, we have a bird’s eye view of the platform’s functionalities. We are able to get real-time visibility into the applications’ performance and infrastructure metrics. This also includes the ability to track potential issues that may arise through alerts and dashboards monitored by our application and network operations center (NOC) team. The data is being used continuously to improve the reliability and performance of the SME digital financing product. These benefits have reinforced Emkan as a market leader over local and regional competitors in servicing the needs of SMEs’ financial needs in the Kingdom,” said AlQahtani.
The SME digital financing platform is the first Emkan product to adopt IBM Cloud Pak for Integration. Due to its superior performance over other internal products, Emkan has reprioritized modernizing its current systems into cloud-native applications on Red Hat® OpenShift® using IBM Cloud Pak for Integration. The move will house Emkan’s main digital channels servicing SME finance, retail finance, auto lease and other leading financing products on IBM solutions.
The new product transformed Emkan’s operations by providing SMEs with a flexible, seamless and self-service omnichannel product that gives quick and easy access to much-needed capital. Additionally, the end-to-end digital service covers new customer registration and loan disbursements all online. It also allows SMEs to better assess and manage their financial risks.
Emkan (link resides outside of ibm.com) is a leading omnichannel fintech brand delivering digital financing solutions to Saudi nationals seeking financing assistance through personal and consumer loans. Fully owned by Al Rajhi Bank, one of the largest banks in the world, Emkan is under the authority and supervision of the Central Bank of Saudi Arabia and delivers solutions compatible with Islamic Law.
© Copyright IBM Corporation 2023. IBM Corporation, New Orchard Road, Armonk, NY 10504
Produced in the United States of America, August 2023
IBM, the IBM logo, IBM Cloud Pak, and Instana are trademarks or registered trademarks of International Business Machines Corporation, in the United States and/or other countries. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on ibm.com/trademark.
Red Hat® and OpenShift® are trademarks or registered trademarks of Red Hat, Inc. or its subsidiaries in the United States and other countries.
This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates.
All client examples cited or described are presented as illustrations of the manner in which some clients have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual client configurations and conditions. Generally expected results cannot be provided as each client's results will depend entirely on the client's systems and services ordered. THE INFORMATION IN THIS DOCUMENT IS PROVIDED "AS IS" WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.
The client is responsible for ensuring compliance with all applicable laws and regulations. IBM does not provide legal advice nor represent or warrant that its services or products will ensure that the client is compliant with any law or regulation.