New Board for 'Sai Net'... Brings Together Major and Minor Shareholders

- Banks to abandon tradition and select board members not concentrated in personal loan management

- Extraordinary general meeting of the company likely to be held in the coming weeks

- Discussions underway to include utility bills and real estate leases in credit assessments

- Cybersecurity, data and risk analysis, and information technology are among the key areas for future leadership

- Representation of both major and minority shareholders together ensures strategic sustainability

- Banking and supervisory authorities are closely monitoring increased concentration in “Saher Net”’s data and technological innovation

- Accelerating sustainable future plans through an integrated credit solutions system and enhancing financial transparency

As part of the strategy of Kuwait Information Network Company “Saher Net,” bank officials are exploring the restructuring of the company’s board of directors with new balances regarding shareholder representation. This approach is based on a core principle: ensuring the presence of representatives from major owners in every term, while avoiding the concentration of representation among retail sector officials (“personal financing”), as has been the tradition.

According to the current “Saher Net” board model, its membership consists of representatives from five banks and one financing company, along with a representative from the Central Bank of Kuwait who chairs the board. Board seats are rotated among different owner teams each term, resulting in a board composition that varies from one term to the next. Some terms reflect the representatives of major owners, primarily large banks, while others reflect the representatives of minority shareholders based on their shareholding weight.

The open discussion within the banking sector on this matter focuses on two paths. The first path advocates that bank officials reach a new mechanism for forming the “Saher Net” board of directors, based on balanced representation of owners. This means each term would include a board comprising both major and minor shareholders, thereby ensuring that the rotation of bank and financing company members delivers the same value: guaranteeing the continuity of a mix of owners in every board term, reflecting both central and small shareholders.

This step aims, beyond ensuring the representation of all owners in each term, to provide the infrastructure for strategic sustainability. The absence of minority shareholders in “Saher Net” during one board term could lead to the approval of strategies based solely on the data and plans of major owners throughout that term, without considering the orientations and capabilities of minority shareholders. Conversely, a board devoid of major shareholders could result in strategies driven by small shareholders. The consequence is that the company’s strategic objectives could change every three years.

The second path advocates ending the tradition that “Saher Net” board members are exclusively policymakers for personal loans. This does not diminish the role or experience of the historical representatives on the company’s boards. However, given that “Saher Net” specializes in collecting, analyzing, and using credit information to prepare credit records and reports, and to classify individual and corporate customers, and operates on a set of strategic pillars that form the main framework for its initiatives in the coming years, its board must bring together diverse expertise, specifically from cybersecurity, risk and information technology, and data analysis. This diversity is expected to accelerate “Saher Net”’s plans for a sustainable future, aligned with the Kuwait National Payments System project, which is managed and operated by the Central Bank.

According to expectations circulating within this circle, the implementation of the selection mechanism for the board of directors of CyNext is expected to be put into practice during an extraordinary general meeting likely to be held in the coming three weeks for this purpose, with discussions on the financial statements and the agenda for the fiscal year ending last September.

Proponents of this view argue that having diverse expertise on CyNext’s board of directors has become a necessity rather than a luxury, as such diversity contributes to strengthening the cybersecurity and data governance systems overseen by CyNext. This includes aligning with regulatory and supervisory frameworks issued, including the “Cyber and Operational Resilience Framework for Local Banks and Financial Institutions,” alongside adopting advanced software for proactive management of operational and technical risks, thereby enhancing compliance with global best practices and standards.

In practice, both tracks are converging, whether in terms of the mechanism for forming the board of directors from various stakeholder weights or adding targeted expertise as CyNext expands its scope regarding credit data through integrating new data sources and exploring new growth opportunities. These include developing specialized products and services that integrate with the needs of various economic sectors, enriching data and enhancing its diversity to contribute to diversifying credit portfolios.

One example of CyNext’s shift in its business model is the move to add new data types to the company’s platform. In addition to credit customer classification, plans in this area include incorporating real estate evaluation data regarding the consistency of monthly rent payments. Furthermore, open discussions are underway with telecommunications companies regarding the possibility of including consistency in paying telecom bills in the company’s classification lists.

Moreover, according to statements by its officials, the company aims to consolidate its position as an advanced credit bureau offering innovative solutions that support the rapid transformations in Kuwait’s credit and financial landscape, with a focus on technological innovation, expanding service offerings, and enhancing financial literacy in society. In this regard, CyNext aspires to become the leading data hub in Kuwait by expanding across multiple sectors and developing an integrated system of advanced credit solutions, at a time when the importance of credit information is growing in enhancing financial transparency and supporting economic stability.

To that end, company officials are working on developing additional applications for credit classifications, in addition to leveraging artificial intelligence and machine learning to support automation and elevate the level of credit analytics. This will enable customers across various sectors to access more advanced and future-ready tools, indicating that the next phase will see CyNext placing greater emphasis on innovation and the integration of data and technology.

Among the drivers for changing the mechanism of forming CyNext’s board of directors are plans to incorporate a “Know Your Customer” (KYC) model for bank-affiliated customers on the company’s platform, aggregating their data, and thereby bringing them within the scope of the credit registry provided for bank customers. Access to view this information will be made available to the sponsoring banks within the framework of a self-inquiry service.