Business Insurance, September 14, 2021
Financial technology companies — from investment, lending and payment platforms to robo-advisers, insurtechs and cryptocurrency exchanges — are taking root, as the pandemic has accelerated a shift to digital operations.
Global venture capital-backed fintechs raised a record $30.79 billion across 657 deals in the second quarter of 2021, a 30% increase from the first quarter, according to a July report from CB Insights. Total funding in the first half of 2021 exceeded all funding raised in 2020.
But insuring these innovative companies, many of them startups, can be challenging due to the combination of financial, human and digital risks they present and changing regulatory exposures they face, experts say.
Fintechs need to keep on top of regulatory compliance because the regulatory environment is changing rapidly, said Jim Wetekamp, CEO of Atlanta-based Riskonnect Inc., a risk management technology company. How regulations are interpreted and understanding how cryptocurrencies fall into the regulatory framework are important considerations, Mr. Wetekamp said.