The Muslim economy, in particular, is one of the fastest growing economies worldwide, driven by the exponential growth of Muslim population demanding Shariah-compliant products and services. Globally, the Muslim population itself is expected to grow twice as fast as the nonMuslim population. The global halal market is expected to reach USD9.71 trillion by 2025 – more than 20 times the size of Malaysia’s economy. The global Islamic finance assets on the other hand have already surpassed USD2 trillion last year. All these present significant opportunities for the takaful industry to provide protection and risk management solutions – be it for trade or goods in transit, for protection of physical or financial assets, and for the protection of human livelihoods. Yet, the global takaful growth ranges at only around 4% last year. While the number of takaful operators has increased to 306, the global takaful industry still accounts for less than 1% of the global insurance market. This calls for serious attention and more concerted efforts by the takaful industry worldwide to ideate and introduce solutions that can support the progress of the Muslim community. Indeed, we should also recognise that this lack of protection and coverage is holding back the economic development of the Muslim community, and it is incumbent upon us to do more to improve this. Takaful as a solution of choice for Malaysians Here in Malaysia, the dual financial system which also includes conventional insurance and takaful market, is well-entrenched. The operating environment presents both opportunities and challenges for the takaful industry.

For takaful operators, staying competitive in a digital world will require far more than just direct sales channel or automated processes. It requires a rethinking of the fundamentals and principles of takaful, for which digital technology can be a catalyst. Takaful operators must rethink their sources of revenue, operational efficiency and talent strategy to reap the opportunities of digital disruptions. It is also important to rethink the business model and the role that takaful operators can play in a digital ecosystem that has transcended geographical boundaries. Digital disruptors such as virtual or peer-to-peer takaful provider that is tech-enabled might be able to overcome many pain points experienced by the industry in more efficient ways. The buzz right now in the financial industry is around digital banks. Nonetheless, this can swiftly turn to digital insurers or takaful operators. Such development could be the next phase that could further enhance the 3/5  BIS central bankers' speeches  quality and pricing of services delivered, while also penetrating new areas for the industry to achieve our protection goals. This development could provide the impetus for exponential growth in insurance and takaful penetration in the country. Thirdly, the industry must take greater responsibility to educate consumers and inculcate understanding about the importance of financial protection. Almost half of respondents in the 2018 Financial Capability and Inclusion Demand Side Survey cited lack of product understanding to be the key reason for not purchasing life insurance and family takaful.