While financial tech is a fast growing sector globally, there is still room for growth in Lebanon. While many banks use Customer Relationship Management (CRM) tools in their daily work, most have yet to take full advantage of data mining and other technologies, particularly in relationship to their retail card portfolio. During a 25-year career as a retail banker in both France and Lebanon, Abdallah Haddad recognized that Lebanon’s retail banking sector was lacking the necessary tools to meet their full potential. He also knew there was a big opportunity to be the first to bring these tools to Lebanon’s banking industry.
A bank’s retail credit card portfolio includes all of its card offerings to customers. The types of credit cards available can be myriad, from prepaid credit cards to cards that earn mileage points, corporate accounts, or retail brand cards. Credit cards were introduced to Lebanon in 1995; in 2013, there were just 600,000 credit cards in circulation. While in the last five years, there has been near 25% growth in the number of credit card users, there is still a huge amount of new customers to be gained by banks. Considering the ubiquity of credit cards in the US and Europe and their increasing use in the developing world, it’s a safe bet that more Lebanese than ever will be signing up for credit cards in the near future.
This potential spurred Haddad (pictured below) to action. He cofounded CPS in 2014 to provide business solutions to banks so as to help them develop their credit card services. Working with a group of advisors and engineers, Haddad created a new banking tool: Card Portfolio Optimizer (CPO), which he hopes will be adopted by banks as a tool to issue new cards, as well as to better understand their current cardholders. Currently in beta testing at one bank, Customer Performance Solutions hopes to roll out full use in the first quarter of 2015.
CPO provides a combination of analytical tools for the average banker to understand and enhance their credit card portfolio. Whereas previous internal tools may have allowed bank employees to view retail credit card information piecemeal, CPO gives a holistic view of a bank’s credit card portfolio across card type, Haddad says.
The tool is focused on enhancing five aspects of the portfolio: card performance, return on investment, portfolio allocation, risk control, and strategy management. The platform does this through analysis, recommendations, and strategic tools using raw transaction data. Analysis can help banks sort through massive number of cardholders, and predictive modeling gives banks the opportunity to see potential fallout from policy tweaks.
While various software tools are currently on the market to manage customer information, Haddad believes CPO is a unique product, as it’s focused specifically on card portfolio performance and management, a niche within the bank. Indeed, CPS has copyrighted a number of the unique features of the platform. Haddad also considers what he reports to be a warm welcome on the part of the banking community as proof that their services are in high demand.
However, like all new products on a market, CPO will have to prove its use to banks over the long term to retain and earn their business. Convincing managers in quite a traditional industry to use new software and technology may not be a simple task. Additionally, as other, similar risk management tools are launched (as Haddad expects they will be in the coming year), CPO will have to continue to prove its distinct advantages.
As CPS looks to expand its product offerings, they will likely have to open up equity in the company to raise further funds if they hope to expand horizontally. While expanding beyond Lebanon is on Haddad’s mind, tumult in the region may prove that difficult. For now, CPS has enough on its plate as its CPO tool moves out of beta testing and they look to find long term customers for the platform.