Going forward, there is certainly a need for greater role by takaful in supporting sustainable management of healthcare and retirement needs of individuals to effectively address the emerging challenges associated with demographic changes with rising healthcare expenditure. As the Malaysian society transitions to a more ageing population as typically seen in developed economies, there is room to harness the appeal of family takaful as a tool for long-term savings and investment, whilst protecting against financial vulnerabilities arising from critical illness, death, disability or unemployment, or providing for children’s education. With growing awareness on individual responsibility in financial planning among Malaysians catalysing demand for savings and investment-driven products, this positive trend will translate itself into an impetus for strong growth in endowment family takaful products. The second dimension of growth opportunities for the takaful industry is to be seized from the transformation of Malaysia as a high income economy. In advancing towards  BIS central bankers’ speeches  1  this transformation, the Malaysian economy is to undergo significant structural shift into new areas of growth and comparative advantage. With Islamic finance specifically identified as one of new growth areas under this envisioned new economic model, the takaful industry stands to gain from the march towards socio-economic transformation by seizing the opportunity to grow business beyond the more traditional business lines. This entails broadening product offerings to higher value-added activities and capturing the growing demand for more customised, niche and sophisticated product range, including investmentlinked and wealth-management products, among the more affluent customer base.

Initiatives by the banking industry in co-operation with the HKMA have been taken over the past year to promote this process. They include the major revisions to the Code of Banking Practice, setting out basic standards for personal banking services - and on issues such as debt collection - and placing an emphasis on transparency. They also include monitoring of compliance with the Code by the HKMA and specific guidance from the HKMA on the handling and processing of complaints. In view of the recent surge in number of complaints, both the HKMA and the industry associations have written to AIs to urge that sufficient resources be devoted to handling of complaints and to remind them to step up monitoring of the performance of their debt collection agencies. We believe that these initiatives have been of some help in promoting higher standards and consistency in the handling of complaints. We shall supplement these initiatives as appropriate. But, no matter how high the quality of service, or how smooth and efficient the handling of dissatisfied customers may become, there will always be complaints and misunderstandings. In fact, quite often the more easy it is to complain, the more the complaints - even at times when the general quality of service may be improving. Higher expectations on the part of the public, a greater complexity of services and products all contribute to a greater volume of complaints.