Fintech companies are becoming more and more popular in the financial market as the COVID-19 pandemic has accelerated the digital transformation. According to a CB Insights report, global venture capital-backed fintech companies raised a record $ 30.79 billion in 657 deals in the second quarter of 2021, up 30% from the first quarter. The total funding in the first half of 2021 exceeded all funding raised in 2020. Fintech is both a financial institution and a technology company with elements of financial institution error and omission coverage, E&O technology coverage, and cyber E&O coverage – all embedded in the same risk profile for insurers. How to effectively manage this risk and transfer it to reinsurance has always been a challenge. The components of the proposed fintech risk assessment model can be described as:
- Identify fintech risk
- Perform qualitative risk analysis
- Perform quantitative risk analysis
- Address fintech enterprise risk area
- Implement fintech innovative solutions risk area
It is important to remember that fintech risk management, fintech governance and fintech innovative solutions represent the three pillars of success or failure of a fintech organization. For more information, please read the article. https://www.isaca.org/resources/isaca-journal/issues/2020/volume-3/a-fintech-risk-assessment-model
