An interview with Ab Latiff bin Haji Abu Bakar, President and CEO of Takaful Ikhlas Sdn Bhd
1. Please begin with a brief introduction to Takaful IKHLAS
Takaful IKHLAS has, within the ten years of its operations, established a strong presence in the provision of Islamic financial protection services based on the Takaful System, which stresses on a spirit of cooperation and joint responsibility among participants. Today, the Company is widely known in the market as a dynamic “brand”. The use of technology has been both deliberated and well thought out. The Company has invested considerably in this area in support of its philosophy of creating efficiency and effectiveness to serve its participants and business partners. Our products are not just evidence of innovation at work but in line with Shariah requirements, where all of Takaful IKHLAS’s products are 100% Shariah Compliant: through-out the whole process and right to the end-product. All operational matters, investment dealings, management and marketing of its products and service offerings are overseen by the Shariah Committee.
The Company offers individuals and commercial enterprises a comprehensive range of Family, Group and General Takaful Plans and Riders, with more being planned in the not too distant future. The distribution/service channels comprise highly knowledgeable and well-trained people. These channels comprise more than 5,000 agency personnel, brokers, financial institutions, motor franchise holders, co-operatives and Islamic bodies.
Our brand is our promise to our customers on the value we provide. Our brand promise communicates the benefits they can expect from our company and what differentiates Takaful IKLHAS products and services from those of our contest. It demonstrates that we are an expert at what we do. Takaful IKHLAS has provided customers with a choice of more than 80 products in a span of 10 years, certainly a noteworthy achievement. Its’ products are evidence of innovation at work. Takaful IKHLAS is a trailblazer on the innovation front, especially when it comes to optimizing technology. Takaful IKHLAS, without doubt, is the forerunner of making the best use of technology to deliver good services on a consistent basis.
In the past, some of the highlighted system innovations are:
- Motor e-cover note system (FLAS)
- Internet Point of Sales (I-POS)
- Motor Direct Takaful (e-IKHLAS)
- Electronic Claims estimation system
- e-Non motor
Within two years, the Company has established an extensive agency network. The Company has 12 branches located in Selangor, Sungai Petani, Kota Bahru, Johor Bharu, Kuching, Kota Kinabalu, Melaka, Kuantan, Ipoh, Terengganu, Putrajaya and Seremban.
2. Can you explain what Takaful is for our readers who are unfamiliar?
Takaful is an insurance concept which is grounded in Islamic Muamalat, observing the rules and regulations of shariah. It is a concept that has been in practice for over 1,400 years. In principle, Takaful system is based on mutual co-operation, responsibility, assurance, protection and assistance between groups of participants. In other words, it is the provision of shared contributions to help those who are in need.
Through the spirit of cooperation and joint-responsibility among participants and the act of charity and benevolence allows participants the opportunity to obtain two forms of benefit. First the monetary benefits through the Takaful plan itself. Secondly the “benefits” in the spiritual sense, through the act of Tabarru’ (donation), participants will receive God’s grace and blessings in life Hereafter. The Takaful system does not differentiate colour or creed; it is meant to benefit all participants, irrespective of their religious beliefs.
3. What are the benefits or differences of Takaful IKHLAS compared to conventional insurance?
The Takaful industry follows what the conventional industry does. By agreement, we have agreed not to innovate outside the tariff. We agreed to follow exactly what is in the tariff, we have agreed to play along the same rules, level playing fields.
To ensure consistency of practice and to facilitate proper growth of the industry, Bank Negara required all tariffs. So there is really no difference between conventional House Holders and a conventional House Owners, compared to what is being offered by the Takaful industry. No difference at all in the cover.
There are other types of differences in between conventional and Takaful. Conventional insurance is a contract of exchange. In Takaful, it is not a contract of exchange. You are actually putting the money into the pool with a “niat” (benevolent wish).
If anything unfortunate befalls any one of the participants, the Takaful operator use this money to assist them. So, you have the charitable, benevolent intention in that particular act. And you know that any charitable or any benevolent act will receive rewards in life hereafter.
Therefore even if there is a cross-subsidy, we still take up that risk. At the very least, the intention here is that one is donating to the pool.
4. What is the value proposition of Takaful IKHLAS for the public?
What makes us unique is our use of technology. Our distribution finds it very convenient working with us. To the buying public, we have a reputation of being prompt and fair in claims handling.
5. Takaful insurance is free from “riba”, “gharar” and “maisir”. Please explain these terms?
Conventional insurance is a contract of exchange of goods or service. In Takaful, in Syariah, when you want to exchange something, there must be a definite amount as well as a definite time for the exchange.
When you put your money into an insurance company, you don’t know when you’re going to get back something as an exchange. You don’t know whether you are going to get anything back, when you may get it back, and how much. There is a lot of uncertainty. And, as such, that uncertainty is what we call ‘gharar’: this leads to wagering. You don’t know whether you’re going to get your money or not. It’s wagering where you are going to lose. So that contract is unfair and has the element of uncertainty. Wagering, and whichever kind of contract that is unfair, is prohibited in Islam.
Under Islamic contract law, you cannot and should not enter into a contract which is weak. So this contract is called “fasir”’. If you enter into a contract which is weak, you are entering into a contract whereby one party is going to be oppressed, and that is“Haram” (forbidden). Therefore, entering into an insurance contract is “Haram”.
“Riba” is of course when you pay a premium to an insurance company, they will invest it in interest bearing instruments. Takaful companies are not invested nor are they kept in any “riba” arrangement.
6. What do you think differentiates Takaful IKHLAS from similar services in the Takaful industry?
Takaful IKHLAS aspire to be the preferred Takaful providers guided by Islamic principles. The Company places uncompromising importance to its Shariah values in every aspects of its business
7. What are the types of products that you have currently, in your portfolio and how are you looking to grow each business?
Currently we have both Family and General products. Family products mainly consists of ordinary, medical, and investment-link and General products consist of motor, fire, marine, aviation and transit (MAT), and miscellaneous classes. IKHLAS shall focus on all its distribution channels in ensuring that it is equipped with the right product, tools and efficient processes to target the right market segments for the various products.
8. What are the measures to be implemented? Is the company adopting new technology or employing more locally specialized workforce? Is there any new product to be introduced or new market has been identified to cater for the current demands?
Takaful IKHLAS is continuously investing in procuring and enhancing its system to be able to cater to the increasing business. Currently, Takaful IKHLAS is fully depending on a locally specialized workforce. In terms of new products, we plan to enhance the existing product and extend our services to Gen Y and Non-Muslim market.
9. How many branches do you have currently, and how many are you planning to open up to December 2015 to reach out to new and existing customers?
Currently we have 12 branches throughout Malaysia. As the Company grows branch setup shall continuously be reviewed to strengthen IKHLAS capability to reach out to our customers.
10. How does Takaful Ikhlas approach Corporate Social Responsibility?
As a responsible corporate citizen in the implementation of Islamic muamalat or business transactions, Takaful IKHLAS is always concern about the hardship and difficulty endured by the poor. We are aware that, in each profit or success achieved by us today, there are other people’s portion. The charitable efforts undertaken by Takaful IKHLAS in helping the people in need does not just limited to certain period of time, instead it is a routine practiced by us throughout the year.
The corporate social responsibility programs conducted by Takaful IKHLAS served as the Company’s commitment to create a bond of goodwill with the society who have been supporting Takaful IKHLAS’ operations until today. Takaful IKHLAS practices the principle of shared social responsibility by prioritizing the society’s interest in our business strategies. We are grateful for being able to contribute to the people in need.
Q&A with Clare George-Hilley, co-founder, Centropy PR
Clare George-Hilley is the co-founder of Centropy PR
Global Banking and Finance Magazine recently caught up with Clare George-Hilley, co-founder of fintech and financial services specialist PR agency Centropy, as the company toasts to three years of trading. We asked Clare about what life is like running an agency in the city, the trends she is seeing in the financial services space and what the future holds following the Covid-19 outbreak.
Why did you decide to set up Centropy PR?
I was looking for an opportunity to launch my own agency, both my husband and I had been in the public affairs and public relations industry for over a decade and we thought the time was right to go out on our own.
We could see that the financial services industry was surging, with challenger brands and new technology transforming traditional banks and setting new standards of customer service. There was a huge market opportunity to create and launch a PR agency that could provider first class comms support, alongside a deep understanding of complex regulations such as AML, KYC, and the GDPR. Likewise, many traditional technology firms are diversifying their offerings, to tap into the growing market opportunity posed by the fintech boom.
So, we worked on a business plan, designed a strategy for winning clients and officially launched in September 2017. Within a few months we had a growing portfolio of clients and a thriving business, since that point, we have never looked back!
How is Centropy doing now and what are you plans for growth?
The last three years have flown by and our client portfolio has grown and diversified quickly. We now manage PR campaigns for clients on everything from cryptocurrency, wealth management to payments and trading software.
We’ve also hosted parliamentary debates with key industry figures, including Members of Parliament (MPs) on topics such as the future of the financial services industry and the impact of challenger banks on traditional providers. The team is expanding quickly and we’re investing heavily in the latest training and support to ensure our team members are equipped to reach their full potential.
How do you see the next 12 months?
The Covid-19 outbreak has crippled the economy, forcing millions of people to work from home due to the very serious health risks. The knock-on effect of this crisis will lead to companies cutting costs where possible to save jobs, so tech will play a vital role in ensuring many businesses stay afloat.
We are already working with contactless payments specialists and other fintech companies that offer solutions to help companies survive and thrive despite the inevitable challenges ahead.
We aim to continue building our portfolio of expertise, testing ourselves with new challenges and delivering the best possible service to clients
This is a Sponsored Feature.
Lessons from past recessions and advice for business owners during the coronavirus pandemic
By Neil Davis, managing director and co-founder of Sterling Networks
What is Sterling Networks?
“Sterling Networks is a professional organisation founded in 2014 which facilitates networking events for businesses across the Midlands, Oxfordshire, Wiltshire and the South West. Over 300 members attend our fortnightly breakfast and lunchtime meetings.”
What is your background prior to establishing Sterling Networks?
“During the 1990s, I worked in the corporate team for Halifax. My wife, Tracey, and I went onto own a manufacturing business, which was also called Sterling, and produced a range of gifts, merchandise and promotional items.
“We soon realised tradeshows were a great way to meet distributors and clients. From there, the business grew exponentially, and we managed to build a network of around 500 distributors. Eventually, we became ground down by the manufacturing business – in part because the local manufacturing sector was being devastated by competition from China – and took the decision to sell the business and relocate to Spain.
“After spending several years living abroad, we moved back to the UK to set up Sterling Integrity (EXPO’S) & Sterling Networks (Networking) We were inspired by a desire to help businesses make meaningful connections with one another, and we haven’t looked back since.”
The UK has recently entered a recession, brought about by the coronavirus pandemic. What have you learned from past recessions and how are these experiences helping you to navigate the current crisis?
“I’ve lived through a number of recessions and have seen the pain that insolvency causes companies on a large scale. It’s taught me that there are those who win and sadly those who lose, and that businesses must adapt to a rise in demand for certain products or services at a time of financial crisis.
“Given the nature of what Sterling Networks offers [an opportunity for business owners to connect and grow together] I decided we could build upon the brand due to the demand for new business during the pandemic. We therefore moved our networking events from face-to-face to virtual via tools like Zoom and have gained a steady stream of new members in recent months, reaching an overall total of well over 300.
“On top of that, we’ve taken new staff on during the crisis and have launched a number of new regional groups across the country. I was determined that Sterling should come out of the pandemic with a head start, so my attitude to the recession has been much more positive than those who are forecasting nothing but doom and gloom.
“We can’t pretend high street retail wasn’t suffering long before the pandemic came along, and thousands of new businesses are sure to start up to meet the demand for the products and services that people require at a time such as this. In order to develop and grow businesses need to focus on where changes need to be made to meet this demand.”
Sterling Networks has been providing emotional support to its members throughout the pandemic. What advice have you been giving to members that could be useful to other business owners?
“I try not to be too opinionated and respect other people’s views when giving advice to members, as there are always two sides to every circumstance. I’ve been careful not to say to people that they should be doing one thing or another, as I don’t know their business and its needs quite like they do. The only thing that I have been telling members is the importance of setting up one-to-ones with one another. By doing so, they can listen to the needs and concerns of other, like-minded business owners and work out ways that they might be able to help one another.
“The pandemic has meant we all have a bit more time on our hands, so the advice I would give to people is to use this extra time wisely. Not having to travel physically from one meeting to another means there is a greater opportunity to connect with more people. It’s important to remember that individuals outside of your business can be just as valuable as those within it.”
What makes you hopeful for the future and are there any words of encouragement you can give to budding entrepreneurs?
“The key events that have happened to this country during my lifetime – whether wars, recessions, or the pandemic – have enabled me to take stock of things. While these experiences are certainly challenging, we all become stronger for living through them, and it gives me great confidence that the world will ultimately improve as a result of the pandemic.
“The whole world is effectively rebooting right now, as is the business community. I like to think entrepreneurs will recognise this opportunity to take better care of their peers, and this translates to greater collaboration between organisations. Speak to as many people as you can, ask all the questions that you need to and do your homework. This might well be a difficult time for us all but planning for the future must start now if it is to become as prosperous as I know it can be.”
Exclusive Interview with Ugo Loser, CEO of ARCA Fondi SGR
Arca Fondi SGR is a mid-sized Italian active asset management company. Founded in 1983 by a consortium made up of 12 regional banks, the company has grown in time, expanding its network of distributors and its client base. Nowadays Arca manages Mutual Funds, Pension Funds and Institutional Accounts with total AUM exceeding 30 € bln, reaching more than 100 banks and financial institutions and serving more than 800,000 final clients.
What are the key contributors to ARCA Fondi SGR’s success over the past 35 years?
Arca has always put clients and distributors first. That is to say we have always privileged fair pricing for funds and developing high quality products and services for our customers. This requires constant innovation as an objective and looking for people’s talent to be free to produce its effect
Why are people the founding element of ARCA Fondi SGR and how have you sustained this vision over the years?
We work in small teams, people are young and motivated and can perform duties with a high level of autonomy and responsibility. Innovation is asked to everyone, everyday
What makes Arca Fondi SGR different from other asset management firms in Italy?
Arca is a company focused on doing what it can do very well, that is to say mutual and pension funds, services for clients and banks. We never follow short term trends but always look for long lasting impact on the industry, like we’ve done may times in the past
What products/services has ARCA Fondi SGR pioneered?
Arca has been the inventor of “Arca Cedola”, fixed-horizon, coupon paying funds, which have been with no doubt the greatest product innovation of the past 12 years on the Italian market. This type of funds, at first strictly based on bonds and later as a balanced product, has encountered an enormous success both with clients and distributors due to its simple and effective value proposition. Arca is a market leader also in the “PIR” segment of funds, a range of product focused on mid and small sized companies, that have been the best performers in the Italian stock market for the last few years. In services, Arca is a leader in technology applied to asset management. Our website, app and digital services for clients and banks are award winning, state of the art combination of data, technology and channels, and the best is yet to come on this side.
What strategies do you have in place to sustain your market position and withstand professional competition in the country?
As I mentioned, we do not waste resources on projects with dubious results, instead we constantly invest on people, products and services. The high level of profitability that Arca has been able to maintain even in difficult years for the markets of the banking sector is a further testimony that this strategy works very well
How do you use technology to create meaningful experiences for your customers?
First of all, we have created a whole new division, Arca InnovAction Lab, dedicated to technology, data and processes. This ensures projects are delivered quickly and they are free to leave bad past practices behind. Arcaonline.it, Arca’s website, provides distributors with detailed information on clients’ portfolios, asset under management and subscription/redemption requests. It monitors aggregate selling data offering to our partners a suite functions and analytics to track commercial campaigns. And if the banks branches need assistance, they may ask Sara, our digital chatbot. A broad and timely multimedia production, covering exclusive reports, comments, presentations, videos, webinars and newsletters is also available on the website.
Customers, subscribing Arca’s funds through its distributors’ network, may access Arcaclick, a dedicated area on Arcaonline.it. With Arcaclick the client can easily browse through her portfolio of funds, analyze its characteristics, view transactions and historical funds’ performance in customizable views. Arcaclick is also a powerful source of information on Arca product range: Prospectus, KIIDs and other literature is easily accessible along with news, comments and reports. Arcaclick may also be accessed via Arca Fondi App, a free application for mobiles and tables, running on both iOS and Android. Available 24/7 and in mobility, Arcaclick gives clients the opportunity access information, news and details of their personal portfolio anytime and anywhere.
What key trends will drive pension growth in 2020 and beyond?
The Italian market for pension funds is still very small and therefore there is a great opportunity to grow. Arca Fondi manages the biggest open ended Italian pension fund and it’s been constantly at the top of its rankings. As people and workers are looking for yield and to weather short term volatility, the pension fund is very well poised to profit from this trend.
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