From digital banks to payment platforms to wealth-management apps, the fintech sector is still growing exponentially.
But here’s the thing: while fintech is booming, many startups are still navigating without the right insurance — leaving themselves dangerously exposed.
Why? Because traditional insurance for banks isn’t built for the tech-driven risks fintech faces. And tech-sector insurance often ignores the financial-service exposures that define the industry, like fraud or regulatory breaches. For example, a professional liability policy for a tech company might not allow first-party crime coverage.
Sitting at the intersection of finance and technology creates a unique risk profile. You’re managing vast amounts of sensitive data, operating on complex digital infrastructure, and working in a regulatory minefield.
The result? Gaps in protection that could prove costly when something goes wrong.
Compliance – PSD3 is coming
Then there’s the matter of compliance. If you operate in the UK or EU, your policy needs to account for regulations such as PSD2 — the European Payment Services Directive, covering Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs). Even post-Brexit, PSD2 is still enforced by the FCA in the UK. PSD3 is also coming down the line, expected later in 2026 with a transition period of around 18 months, meaning it comes into force between 2027 and 2028. This time a directive rather than a regulation, PSD3 primarily addresses licensing and supervision. While the UK is no longer formally bound to follow anything adopted by the EU, the payments industry is by nature international there will be pressure to address the same rules and issues.
The takeaway? A fintech business needs a hybrid insurance approach — blending financial and tech protection, while also adapting to emerging risks like cybercrime.
The core components of a strong fintech insurance policy
Here’s a breakdown of the key types of coverage every fintech business should consider:
- Professional Indemnity Insurance (PII) protects you if:
- A client suffers a financial loss due to your mistake.
- You accidentally breach industry regulations.
- You face an intellectual property dispute.
In fintech, innovation is constant — which means disputes over IP and claims of poor advice are common. PII helps cover the legal and financial fallout from these situations.
- Cyber insurance
Fintech is a hacker’s dream target. Financial services organisations are 300 times more likely than other companies to be targeted by a cyber attack, and the average cost of a data breach in the financial sector is $5.9 million – above the global average of $4.45 million*. Cyber insurance can cover:
- Liability for compromised client data.
- Costs to investigate and recover from attacks.
- Losses from ransomware, malware, or system outages.
- Directors’ & officers’ (D&O) insurance protects your company’s leaders against personal liability for:
- Allegations of wrongful trading.
- Errors in financial reporting.
- Decisions challenged by investors or regulators.
Pair this with employment practices liability insurance (EPLI) to cover claims from employees alleging unfair treatment, harassment, or discrimination.
- Theft & crime insurance: cyber policies don’t always fully cover fraud – theft or crime insurance can protect against:
- Theft of funds or assets by third parties (or employees).
- Fraud via both electronic and non-electronic means
- Employers’ liability & public liability insurance
- Employers’ liability is a legal requirement in the UK, covering work-related injury or illness claims from employees.
- Public liability covers injuries or damages suffered by members of the public due to your operations. Keep an eye out for COVID-related exclusions.
- Business contents insurance: even cloud-based businesses need protection for:
- Office equipment
- Laptops and mobile devices used remotely
Why specialist brokers are worth it
Specialist fintech insurers and brokers understand:
- The dual nature of your risks.
- The latest regulations and compliance needs.
- How to structure coverage that grows with your business.
When the unexpected happens, you’ll want an experienced adviser who understands both your financial and technological vulnerabilities.
Bottom line: The right insurance isn’t just a safety net — it’s a growth enabler. With robust insurance cover in place, you can focus on innovation, scaling your services, and navigating the competitive fintech landscape with confidence.
*https://www.beyondencryption.com/blog/cybersecurity-statistics-financial-services