LONDON, 2 July 2007 — Another sign of the developing maturity and depth of the Islamic financial market is the growing customer incentive and diverse marketing activities and computer technology applications in institutions in the Gulf Cooperation Council (GCC) countries.
At the recent Card International Global Award 2007 held in Berlin during the 20th Cards & Payments Europe Conference and Expo, for instance, SelektpointsTM, a company wholly-owned by Kuwait-based Islamic investment entity, The International Investor (TII), headed by Adnan Al-Bahar, won “Best Innovation in a Loyalty Program” award. According to Card International, the award recognized Selektpoints for creating a global coalition program available through a wide range of merchants offering personalized redemption offers to cardholders.
TII is one of the oldest Islamic investment companies in Kuwait. It was established in 1992 by institutional and private investors as a joint stockholding company, and was listed four years later on the Kuwait Stock Exchange in 1996, and subsequently on the Bahrain Stock Exchange.
TII, in the early 2000’s was on the verge of a merger with the Bahrain-based Albaraka Banking Group, headed by Saleh Kamel of Saudi Arabia. However, the merger, after being initially signed and sealed, fell through because of irreconcilable differences that cropped out during the final negotiations. The two parties eventually reached an out-of-court settlement regarding expenses and commitments relating to the merger.
Since then TII has restructured from providing asset management services through its family of Shariah-compliant Al-Dar equity products, some of the first in the market, to concentrate on private equity, retail and corporate finance and specialized products including wealth creation and management. Last year it also acquired a bank in Turkey and got permission from the Turkish regulator, the Banking Regulation & Supervision Board, to convert the conventional bank to “Participation Bank” (the Turkish euphemism for Islamic bank). It also has a car and vehicle fleet leasing joint venture in Turkey.
TII’s strategy has gradually evolved toward building a portfolio through acquisition and start-ups (greenfield) of regional operating companies in high-growth markets in three sectors — retail financial services, fleet leasing & management and loyalty solutions. Currently TII has operations in Kuwait, Bahrain, the UAE, Turkey, Jordan, Pakistan and India.
TII reported a net profit of KD12.31 million for the 2006 financial year, with total assets reaching KD159 million by year-end, representing a 48.16 percent increase over 2005. Shareholders’ equity similarly increased by 7.63 percent over 2005.
According to Robert Buchan, CEO of Selektpoints, the loyalty program “has become a global pioneer in EMV loyalty, the first program of its kind which rides on the EMV smart chips of leading Landlord Banks and Landlord Merchants, thus with a single insertion, both the financial and loyalty transactions are finalized.”
Last year, TII’s Selektpoints for a worldwide business patent for what it claims to be a “unique concept”. TII further claims that “this state-of-the-art merchant coalition loyalty program is the first of its kind, bringing TII to the forefront of the global loyalty industry. Selektpoints offers the most innovative coalition program for end-users, merchants and Landlord Banks.”
Joanne Robinson, managing director of Cards International, agrees that “Selektpoints has “turned the loyalty model upside down by making it a source of revenue for the banks — something new and unique in a very competitive industry”.
According to TII, contracts have already been signed with banks in Kuwait, UAE and Lebanon, and negotiations are under way with financial institutions in India, Pakistan, Saudi Arabia, South Africa, Europe, Jordan, Qatar, Oman, Canada, Singapore and Hong Kong. Through an agreement with a “landlord bank” in each territory, TII’s loyalty solutions reside on bank EMV compliant payment cards.
According to TII, Selektpoints is the first loyalty program with a bespoke redemption engine. The value and use of data collection differentiates Selektpoints global loyalty solutions, linking manufacturers to the end users of their products. It is also the first program offering global redemption, so customers can redeem points in any of the countries where Selektpoints operates.
Selektpoints, according to Robert Buchan, is a retail loyalty coalition program and not a rewards or discount program launched in 2007. It is delivered to consumers through emv bank cards and banking mobile technology. It is funded by retailers wishing to drive merchants. It is globally interoperable.
Selektpoints, Buchan said, works through the system whereby it pays banks (landlord banks) for hosting the program on their cards for a fixed fee per card issued in the market, and an additional transaction fee based on a profit-share with Selektpoints.
The program works on banks’ emv, debit cards or prepaid cards, and is totally protected through the separation of the financial transaction and the loyalty application on the chip.
