Financial Technology and Islamic Insurance: The Saudi Context

Abstract

This study investigates the adoption of financial technology (FinTech) in the Islamic insurance industry, also known as the Takaful industry, as well as its challenges and prospects. A qualitative method was employed, comprising interviews with nine experts from top senior management and policy-making positions in Saudi Arabia's FinTech and Islamic insurance sectors. The data collected were recorded, transcribed, coded and analysed based on seven themes. The primary findings indicate that FinTech adoption in the Islamic insurance industry has penetrated core departments such as claim management, sales, actuarial, risk assessment and database management. However, it requires expansion into health and life insurance departments. Additionally, FinTech has fostered innovation, attracted quality talent, enhanced efficiency and facilitated flexible working environments. The study's implications include the need for a separate Takaful and insurance regulatory body distinct from the Saudi Central Bank (SAMA) to accelerate FinTech adoption. Centralising data in one location through cloud services is necessary, and top management and policymakers in Saudi Arabia should devise strategies to further the adoption of FinTech in the Islamic insurance industry. This research is a pioneering empirical work on cutting-edge FinTech adoption in the Islamic insurance industry in Saudi Arabia.