reliance on agents. examples include the liberalisation of fire and motor tariffs, and the requirement under the life framework for companies to offer pure protection term products through direct and online channels since july 2017, and starting in july 2018, to extend this to pure protection critical illness and pure protection medical and health products. at the same time, the regulatory expectations on the conduct of agents have also intensified. it is the aim of bank negara malaysia to continuously strengthen the professionalism of insurance and takaful agents. this is not to speak of the impact of technology. in the case of agents and intermediaries more generally, the information revolution can be a particular source of anxiety. in an age of apps, aggregators and “ ask me anything ” chatbots, suppliers and consumers are closer than ever before, potentially bypassing the agents or intermediaries altogether. with the emergence of fintech and insurtech, insurers in other countries are starting to experiment with chatbots capable of independently maneuvering sales and servicing processes. product aggregators are also fast growing in prominence. an accenture survey revealed that aggregators account for 70 % of new business premiums in the uk private automobile insurance market. indeed, two product aggregators platforms are already operating within bank negara malaysia ’ s regulatory sandbox. the bank is reviewing the regulatory framework to enable the aggregators to operate by the end of this year. 1 / 5 bis central bankers'speeches these are headwinds that the industry has to tackle head - on, and like it or not, they will further intensify. while we cannot stop these changes, we can certainly choose how we respond to it. with challenges are opportunities. these can only be reaped through a combination of traits – greater proactiveness, a willingness to adapt and clear strategic thinking. i do not doubt that this is much harder than it sounds, but i believe a good place to start would be focusing on three priorities. allow me to elaborate on each in turn. technology that matters the vision for the life insurance and family takaful industry is to achieve a penetration rate of 75 % of the malaysian population. within this, the takaful industry has set a 25 % target to be achieved by 2020. for this to happen, it is crucial that the industry gets to grips with the shift in market demographics, especially where interactions with technological platforms are concerned. it is imperative that agents embrace technology. a 2017 study 1 by bain & company

own framework drawing from their own needs and experiences. at the same time, ifis encouraged product innovation which moves away from fixed - interest ( riba ) loan transaction to promoting a contractual arrangement for profit - sharing in businesses. the inherent risks exposures ( legal, credit, market etc ) in financial instruments is very different from risks associated with loans. an appropriate corporate governance framework would need to recognize these elements and identify risks and challenges associated with the different islamic contractual arrangements and instruments. ifis reputation is highly dependent on the perception of customers with respect to shariah compliance and issues surrounding investor ’ s protection given the traditional reliance on the deposit products etc. key challenges that islamic banks face need to be tackled effectively. these challenges are interlinked and mutually reinforcing and range from : reputational risk arising out of any uncertainty on shariah compliance. success of an islamic financial system is based on stakeholders believe that the system is shariah compliant. this single factor intensifies the role of good corporate governance to ensure that the faith of stakeholders is not compromised and the system sustains and grows smoothly. the reputational risk factor i. e. loss of oecd principles of corporate governance 2004 ; include ( i ) ensuring the basis for an effective corporate governance framework, ( ii ) the rights of shareholders and key ownership functions, ( iii ) the equitable treatment of shareholders, ( iv ) the role of stakeholders in corporate governance, ( v ) disclosure and transparency, and ( vi ) the responsibilities of the board. faith has to be managed right from the inception of an ifi and the shariah advisor / board are assigned to perform their duties. commitment of dedicated, qualified directors who understand and can assess shariah compliance would facilitate effective oversight and protect the industry from overall reputation risks. qualifications / experience of shariah advisors is the key to judge and support the development of shariah compliant financial services. in absence of this, there is a risk that for short term profits / gains the shareholders / bod may become willing to compromise on the shariah principles. the presence of shariah literate directors would discourage precedence of profit motive over shariah compliance. from the regulatory point of view, the licensing stage is of particular importance whereby the licensing authority should demand a clear demonstration of sponsors ’ commitment to islamic banking. demarcation of responsibility and accountability between board, management and shariah advisor. akin to the demarcation issue in a conventional