Introduction
The fintech industry continues to revolutionize the financial services landscape by combining innovative technology with financial solutions. As these tech-first firms continue to grow and disrupt traditional FIs, they face a unique set of risks that differ significantly from their traditional counterparts. Understanding these risks is crucial for fintech companies aiming to safeguard their operations and for stakeholders who support them.
Our goal here is to examine the risks fintech firms face by analyzing the insurance claims they are actually reporting to the market. By understanding the frequency and nature of these claims, we can gain valuable insights into their unique risk profiles and how they differ from traditional financial institutions.
WTW claims database
To accurately assess the risks that fintech firms face, we utilize the comprehensive data available via the WTW Claims Database. Analyzing numerous claims submitted to our Financial, Executive, and Professional Risks (FINEX) division globally, our Client Insight and Analysis team anonymizes the data to protect client confidentiality and produces actionable insights.
Our claims information is accessible to clients in two forms: a dynamic online tool that allows them to explore data based on their specific needs, and detailed claims reports that highlight key risk areas. By leveraging these resources, fintech firms can gain valuable insights into their distinct risk profiles and how they differ from traditional financial institutions.
Related content
12% of fintech cyber claims are made up of hacking damages.
The digital nature of fintech operations also means that cyberattacks can serve as a vector for direct financial loss
Conclusion
Examining real world claims trends provides us with yet another data point fintechs can use to understand their unique risk profiles. However, we should be careful not to substitute these results for a comprehensive, firm-specific approach to risk quantification and mitigation, as each fintech firm presents its own unique mix of cyber, professional, crime, and management liability risks.
Nevertheless, the data serves as a reminder of the importance of robust cyber security protocols in the fintech world, and which areas in particular are most frequently the subject of reportable insurance claims. By integrating these insights with a thorough evaluation of your own specific operations and exposures, you can develop a tailored strategy that addresses both shared challenges and the unique risks inherent to your business. This nuanced approach can help ensure that your firm is prepared to navigate the complexities of the fintech landscape.
Contacts
5% of fintech cyber claims are made up of ransomware attacks.
