Founder and CEO of Freedom Holding Corp. (Nasdaq: FRHC), Timur Turlov, is convinced that the ability to analyze vast amounts of client data is vital for a business's survival and a key measure of its competitiveness in today's economy. "These days, if you understand what consumers want and when, and can offer them something valuable at the right time, you can save significant resources. Many companies still carry a heavy burden of non-production expenses in their costs, which is why big data can make a difference in improving economic efficiency," the businessman said during a speech at the Asia-Pacific Ministerial Conference on Digital Inclusion and Transformation held in Astana in early September.
"...know your client"
The entrepreneur emphasized that the so-called Magnificent Seven—Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), Nvidia (NVDA), Meta Platforms (META), and Tesla (TSLA)—are leaders in leveraging big data more effectively than others. Over the past decade, they have become major beneficiaries of AI industry development and big data analysis, with their revenues and net profits multiplying manyfold and some reaching market capitalizations in the trillions of dollars. The total weight of these stocks in the S&P 500 index exceeds 30%, attracting significant interest from both private and institutional investors. According to Morgan Stanley, the performance of these seven stocks contributed to more than half of the total positive returns of the index in 2023.
When Freedom Holding Corp. began building its ecosystem several years ago by acquiring businesses across various consumer segments, some perceived it as a peculiar strategy with no clear purpose, Timur Turlov recalled. In reality, all these acquisitions served a singular objective. "The ecosystem we've been developing is crucial because it enables each company within it to complement one another and engage with the customer as frequently as possible. Naturally, the more often you interact with a company, the more trust you build as a client. In the end, it's all about getting to really know your client," the CEO of Freedom Holding Corp. explained.
Since 2020, the company has invested hundreds of millions of dollars in acquiring various assets. First, it bought a bank, then insurance companies, a U.S. brokerage firm, and several online services, including a ticketing platform, a payment service, and a food retailer, among others. In Kazakhstan alone, the ecosystem includes 12 companies serving five million customers. Furthermore, all major services in the country are now integrated into one app, the Freedom SuperApp, which was launched in the spring of 2024.
Cross-selling products and services within a unified ecosystem creates a synergy that positively impacts the company's financial performance. In fiscal year 2024, Freedom Holding Corp. reported a 105% increase in revenue ($1.635 billion). The company's share price has risen fivefold since its initial public offering on Nasdaq in the fall of 2019.
Digitalization and Inclusivity
Timur Turlov noted that the ability to harness big data is directly tied to the level of digitalization not only within businesses but across society as a whole. "Our mission is to build an inclusive digital society in Kazakhstan, one that considers the needs of a diverse population. It is a society where all individuals feel valued and have access to digital services, regardless of their location, gender, age, or other characteristics," the financier stated at the conference in Astana. "Freedom Holding Corp. is a clear example of how digital transformation can be an effective tool to improve the quality of life for many people."
Timur Turlov mentioned that Freedom Holding Corp. was the first in Kazakhstan to introduce innovative products such as digital mortgages, digital car loans, and online traffic accident processing. Currently, digitalization and the optimization of internal business processes are the primary sources of income rather than merely attracting new clients. It's important to note that consumers quickly appreciate new products and will "vote with their wallets" if they find them useful and convenient. For example, when Freedom Bank launched digital mortgages in Kazakhstan in 2022, it quickly became the segment leader, issuing the majority of mortgage loans in the country.
Of course, no sustainable development is possible without mutually beneficial relationships with all stakeholders—clients, partners, and the government. "Our social projects are an attempt to build healthy relationships with both the government and society," Timur Turlov said.
Timur Turlov estimates that the company spent over $50 million last year on promoting ESG initiatives, as well as on charitable and social development efforts. These expenditures even exceeded the company's tax payments. Freedom has supported football and chess federations and has been involved in the construction and modernization of urban infrastructure, particularly educational institutions. According to Turlov, corporate social responsibility is about "securing our future"—making investments that help unlock the nation's potential.
