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parties [company and policyholder]. Moreover, the contracts have to get the approval of
the regulator and they are not left to the discretion of insurance companies. On the other
hand, dispute resolutions are handled by specialized courts at all levels.
9. How can FinTech be used to strengthen the Takaful Industry and what are the
measures that should be undertaken?
The experts from the three countries are unanimous that the benefits of Fintech to the
Takaful industry outweigh its cost. The five experts from Malaysia explain that
technological developments and the changing expectations of customers are the main
drivers of innovation in the global financial services industry including Takaful. They
say FinTech innovations have the potential to deliver a wide range of benefits – in
particular, efficiency improvements, cost reductions, improved risk assessment,
superior customer experience and greater financial inclusion. They further elaborated
that FinTech will make the Takaful companies competitive due to cost efficiency and
product innovation. Takaful will become cheaper and more accessible. For example,
customers can make use of smart contracts for Takaful products, avoiding the hassles of
filling in forms and paper works. The FinTech platform will reduce the need for Takaful
agents and distributors and save the commission. They also caution that some of these
innovations could also have negative implications for consumers and the financial
stability of Takaful markets.
According to the five experts from Malaysia, the most relevant emerging technologies
for the Takaful industry are digital platforms, the Internet of Things, telematics, big data,
data analytics, comparators, robo-advisors, machine learning, artificial intelligence and
distributed ledger technology, including Block-chain and smart contracts using various
Business models like peer-to-peer, usage-based and on-demand. They said these
innovations are being developed both by incumbent Takaful companies and by new
technology firms or new companies known as “InsurTech” start-ups. The five experts
acknowledge that FinTech developments are potentially disruptive and may have a
significant impact on the Takaful market. The experts conclude that FinTech provides
an opportunity to engage consumers and to offer efficient services.
Three experts from Turkey share the view that the insurance industry is conservative
compared to other FinTech industries in terms of Internet of Things, cloud, artificial
intelligence, smart contracts, reliable use of personal data, image processing
technologies, and the insuring of the digital world. However, innovation, efficiency,
growth, quality, and competitiveness are the opportunities that can take companies one
step forward. They explain that we are in a period where FinTech is beginning to
influence a vast ecosystem, even economic policies itself. In this context, it is also
important how the different stakeholders in the ecosystem behave in terms of
competition or cooperation. While the technological transformation has made it easier
for people to access financial services, the products and services provided increase both
the diversity and quality of the products and reduce the costs. Although innovative ideas