The Malaysian Takaful Association (MTA) yesterday signed an Memorandum of Understanding (MOU) with the Fintech Association of Malaysia (FOAM) to spur the adoption of financial technology (Fintech) and encourage digital innovation and the use of Fintech among takaful players in Malaysia. The signing of the MOU is a strategic initiative by MTA that supports Strategic Thrust 3: Advance Digitalisation of the Financial Sector of Bank Negara Malaysia’s Financial Sector Blueprint (FSB) 2022-2026.
MTA Chief Executive Officer, Mr. Mohd Radzuan Mohamed said that the “cooperation between the two associations will pave the way for Malaysian Takaful operators to explore the potentials and opportunities of Fintech as we individually and collectively aim to achieve greater productivity, efficiency and effectiveness in our business operations, stakeholder communications (including agency networks) as well as customer interactions.” He added that “more importantly, the cooperation allows us to explore avenues towards the implementation of initiatives identified under the Value Based Intermediation for Takaful (VBIT) Roadmap (launched in July 2022) and relevant initiatives under the national FSB 2022-2026.”
President of FOAM, Mr. Wilson Beh expects the cooperation to bring value to the Takaful players and the industry’s further development. He elaborated that the aim of FOAM is to accelerate innovation in the financial sector. Sharing that as of 2021, 11 of Malaysia’s 223 Fintech companies, are in the Islamic Fintech space, and a further 22 are Insurtech, he added that “it is exciting to think about the potential impact Fintech can have in the Takaful space and for Malaysian consumers. With the introduction of Takaful-tech, we can imagine revolutionising and simplifying the access to Takaful protection plans, claims handling and management and agency transactions on your mobile phones and devices.”
The 24-months cooperation has identified various areas of mutual cooperation to accelerate and encourage Fintech in the takaful space, including:
- FOAM to connect subject matter experts with takaful industry players who can offer technical advice, sharing of latest trends in Fintech industry and mentorship support to MTA;
- MTA to explore platforms to connect and increase participation of FAOM members and Fintech startups in MTA’s events, programmes and initiatives;
- Both parties will support and co-organise programs related to insurance technology initiatives, Takaful transformation and awareness building, BNM Financial Sector Blueprint related to Takaful and Fintech.
Innovations and digitalisation in the Takaful sector is expected to benefit the industry, helping it step up its game, especially in making takaful more accessible to the Malaysian public, thereby contributing to greater financial inclusion and social protection among Malaysians.
