neoleap and IBM
Saudi Arabia’s economy has been heavily reliant on oil revenues, exposing it to market volatility. The country set out to diversify its economy with digital transformation at the core.
Digital transformation is at the foundation of Saudi Arabia’s strategy to transform and ensure future economic growth and competitiveness on a global scale. According to the General Authority for Statistics, the digital economy contributes 14% to the country’s GDP figures. This digital push is in line with national and global trends towards a more connected and technologically advanced world as more people live, play, shop and work online.
One factor fueling the rise of the digital economy is the increased use of electronic payments. The Kingdom’s youthful and mobile-first society is moving away from the tradition of relying on cash for daily transactions and embracing digital banking as a preference.
The move toward cashless transactions isn’t a recent phenomenon. It became the norm before the COVID-19 pandemic, with adoption rates soaring over 70% between February 2019 and January 2020. The pandemic then hypercharged the trend, leading to digital payments increasing by 75% in 2020 and cash withdrawals decreasing by a third in 2020. After the pandemic, the use of digital payments hasn’t abated and is going from strength to strength. The Saudi Central Bank (SAMA) recently announced that retail consumer electronic payments had reached 70% of total retail payments in 2023, up from 62% in 2022.
As a result, there has been increased demand for integrated and secure digital products and services to meet the needs of consumers and businesses at every touchpoint, such as:
- Digital wallets
- Payment gateways
- Points of sale systems
- Cross-border payments
- Embedded finance
- Open banking
- Fintech solutions
This market opportunity led to the formation of neoleap in 2021. A subsidiary of Alrajhi Bank, the world’s largest Islamic bank and the biggest bank in the Middle East and Saudi Arabia, neoleap aims to enhance digital financial inclusion by providing innovative and secure payment solutions. It’s also the cornerstone of the bank’s open banking offering. Since its formation, it has become the prominent digital payments company in the country.
neoleap understood the need to innovate to keep up with the country’s increased demand for digital payments. After a thorough efficiency analysis, the company identified the need to build its agile integration platform or credit card middleware.
Understanding the sensitivity of the development process, neoleap consulted with internal principal stakeholders and adopted a hybrid cloud approach and cloud-native development style. This strategic direction ensured the execution of a greenfield project while addressing critical business needs.
The goal of going this route was to ensure that the business operations continued serving and meeting evolving customer demands during development. Secondly, it wanted to accelerate time to market for new products, enabling neoleap to strategically position itself in a competitive and price-sensitive fintech market. Thirdly, it needed to align with the requirements of SAMA and other national regulations throughout the development. Lastly, it had to enhance the stability and agility of its ecosystem, positioning neoleap as a comprehensive fintech platform that delivered exceptional user experiences to both merchants and customers.
To achieve these objectives, neoleap prioritized identifying the key capabilities and systems needed to support this transformative initiative. Staying true to its pioneering spirit and collaborative nature, neoleap partnered with IBM, its technology partner that had been by the company’s side since its inception. Together, the two organizations developed a holistic, innovative approach to help ensure the successful development and deployment of neoleap’s new products.
“The successful development and deployment of neoleap’s platform was a business imperative to maintain and grow neoleap and Alrajhi Bank’s market share. We chose IBM as our strategic partner due to its reliable and robust hybrid cloud solutions and its extensive experience collaborating with financial service providers of all sizes,” a spokesperson at neoleap said.
After extensive assessment and consultation, neoleap leveraged IBM Cloud Pak® for Integration, featuring IBM App Connect and IBM API Connect®, along with the Red Hat® OpenShift® Platform, to initiate the platform development. The solutions used pre-integrated data, AI automation and security capabilities. The software delivered a comprehensive and unified hybrid cloud platform experience, enabling the business and IT teams to build the credit card middleware across neoleap’s IT infrastructure.
neoleap’s middleware uses the application integration capabilities of IBM App Connect to provide greater flexibility, portability and scalability in the development process. The solutions also included robust API management capabilities, using IBM API Connect for secured integration with other systems, such as payment gateways and fraud detection services, helping ensure seamless operation across neoleap’s on-premises and cloud environments. The built-in security features and compliance management tools helped neoleap maintain adherence to industry standards from start to finish.
Additionally, neoleap introduced IBM Instana® Observability, which is currently running on lower environments for continuous monitoring and analytics. The team is also strongly considering leveraging IBM Instana Observability as the enterprise observability solution of choice to provide deep insights into application performance post-deployment, providing proactive management and rapid issue resolution.
neoleap’s technical team successfully deployed its agile integration platform without causing any disruptions to payment systems, consumer wallets or overall business operations. Since the deployment, the company has significantly elevated its business capabilities and offerings.
One of the key milestones achieved was the transfer of card processing responsibilities from Alrajhi Bank to neoleap, following the successful greenfield implementation project. This transition paved the way for the launch of a groundbreaking business-to-business (B2B) wallet for merchants. Completed in a record 7 months, the wallet gave merchants the ability to onboard in under 60 seconds, while the closest digital payment competitors can take between 3 and 7 minutes. With a market share in branded point-of-sale (POS) devices now exceeding 40%, neoleap has simplified merchant integration with the Kingdom’s national digital payment systems. The wallet is available across multiple platforms, including web browsers, mobile devices and tablets, reflecting neoleap’s commitment to accessibility and user convenience.
“The development process was a game-changer for us. As a relatively young digital company and not an early entrant into the digital payments market, it allowed us to catch up and leapfrog competitors by offering cost-effective digital-first products and services that align with the trends we see in the Kingdom. Because our agile integration platform is built on IBM Cloud Pak for Integration and Red Hat OpenShift, we can make continuous system improvements bi-weekly with zero downtime, enhancing the overall user experience and ensuring compliance. This was possible because of the successful establishment of the DevSecOps processes that allowed us to fully automate the development and deployment of services to IBM Cloud Pak for Integration and Red Hat OpenShift,” a spokesperson at neoleap explained.
The launch of the merchant wallet has significantly benefited merchant customers. It has provided an avenue for international payments and a new channel for payroll and financial transactions. Plus, it has increased integration with sister companies within the Alrajhi Bank Group, including external third parties, using IBM hybrid cloud technologies for more seamless and secured open banking experiences for customers. neoleap has also expanded internationally with cross-border services in the Middle East and plans to extend beyond the region.
neoleap is a one-stop shop for all your business’s financial solutions needs, from creating a digital wallet to receiving and managing your sales and revenue. Additionally, you can order your trusted neoleap products, such as point of sales, SoftPOS, payment gateway, corporate cards and more. With neoleap, you can conveniently manage your business’s finances from anywhere.
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