Huge majority of financial institutions intimidated by FinTech firms

A whopping 83% of financial institutions in Europe, the Middle East and Africa (EMEA) fear their business is at risk of being lost to standalone FinTech companies.


Tuesday 7

Huge majority of financial institutions intimidated by FinTech firms

That is according to a new report from Aon, which reveals 9% of these businesses claim they have already suffered a financial loss because of independent FinTech firms.


In addition, 49% believe they are unprepared to adapt to innovation, with nearly a quarter saying they have suffered a monetary loss over the last 12 months as a result.


Because of this, ‘disruptive technologies’ and ‘failure to innovate’ have been identified as two of the top 10 potential risks facing these organisations for the first time.


“The risk environment for financial institutions continues to evolve rapidly as the magnitude, scope and complexity of risk increases globally,” Aon EMEA chief commercial officer, Enrico Nanni, said.


“The evolving economic landscape and trend towards disintermediation is reflected in ‘failure to innovate’ and ‘disruptive technologies’ entering the top 10 risks, as financial institutions grapple with rapidly changing consumer and corporate habits.”


The top ten risks facing EMEA financial institutions are shown below:


Top ten risks facing EMEA financial institutions.

Source: Aon


For the second time running, damage to brand and reputation has emerged as the top ranked risk, while cybercrime has moved up into the top five threats.


However this is predicted to change significantly over the next few years, with regulatory and legislative changes expected to be the number one risk facing EMEA financial institutions by 2020.


This is predicted to be followed by an economic slowdown or slow recovery, with cybercrime, failure to innovate and damage to reputation or brand completing the top five threats by the end of the decade.


Aon head of EMEA financial institutions, Herman Kerremans, said: “The disruption to financial markets in the last decade confirmed that managing risk is key to achieving growth and profitability.


“In an environment with more regulation, protracted low interest rates and tight capital requirements, this report provides comprehensive research and industry specific data, allowing organisations to benchmark their risk management and financing against their peers”.


Most popular

  1. Financial firms record 85% increase in cyber security spending

    Finance and insurance companies in the UK invested more money in cyber security than any other type of firm over the latest financial year, new analysis has found.


    Monday 16


    16 July 2018

  2. Company board members want more cyber security spending

    The vast majority of company board members across the world believe their firms should spend more money on cyber security, a new global survey has found.


    Monday 25

    25 June 2018

  3. InsurTech deal numbers hit record high

    There were a record 66 InsurTech investment deals recorded in the first quarter of this year as insurers continued to look to start-ups to improve their claims handling and underwriting excellence.


    Wednesday 23


    23 May 2018

White paper

  • Quarterly InsurTech Briefing Q1 2017

    Why InsurTech? A Pressured Insurance Value Chain

    By Andrew Sagon, Andrew Johnston and Matthew Wong

    InsurTech is a burgeoning phenomenon that is modernising the insurance industry. It is disrupting the traditional value chain whereby insurers offer loss protection, and shifting the emphasis to risk mitigation. Incumbents face disintermediation as investors in search of higher yields pour money into insurance-linked instruments in the capital markets. And entrepreneurial businesses are targeting friction costs and inefficiencies within every aspect of the traditional value chain.



  • Insurance big data – float like a butterfly, sting like a bee

    Nimbleness and agility will unlock potential

    By Elinor Friedman, Andrew Harley and Klayton Southwood

    Recent Willis Towers Watson surveys in the U.S. have shown that P&C and life insurers in developed markets are taking seriously the potential of big data and predictive analytics to improve their businesses. Nimbleness and agility, rather than brute force, are likely to be key to realizing that potential.

    Download PDF

  • The new era of insurance analytics

    Driven by technology, toolkits and talent

    By Claudine Modlin and Graham Wright

    Advanced analytics is helping some insurers offer innovative products and solutions. What do insurers need to know about the changing nature of analytics and whether it is worth the investment? Claudine Modlin and Graham Wright discuss technology, toolkits and talent — topics that may help you decide.

    Download PDF

  • How can we manage the dynamic nature of cyber-risk?

    Risk transfer is part of a comprehensive solution

    By Adeola Adele, Patrick Kulesa, Kevin Madigan and Alice Underwood

    Given the dynamic nature of cyber-risk, taking a multidimensional approach that integrates board governance, technology solutions, behavioral change and risk transfer solutions can help reduce risk to a manageable level.

    Whitepaper Form