Financial institutions in Europe are increasingly worried about disruptive technologies and a failure to innovate, Aon suggested

More than four fifths of financial firms in Europe think their business is at risk of being lost to standalone fintech companies, according to a study from Aon.

The insurance broker has published its 2017 report on the risks facing financial institutions in Europe, Middle East and Africa (EMEA).

Failure to innovate and disruptive technologies both entered the top 10 risks facing EMEA financial institutions for the first time.

For the second time running, damage to brand and reputation and economic slowdown emerged as the top ranked risks in the survey.

However, some 83% of companies said they feared their business is at risk of being lost to standalone fintech companies.

Meanwhile 9% of businesses confirm they have already suffered a financial loss because of it.

Failure to innovate is now a top five risk, and it is hitting companies’ bottom lines, according to Aon.

The broker reported 24% of financial institutions saying they have suffered financial loss during the last 12 months because of this risk factor.

Aon cited 39% of EMEA financial institutions responding to its report feel they are unprepared to adapt to innovate successfully.

Cyber-crime continues to rise up the risk agenda, also moving into the top-5 risks, Aon noted.

Claims service was found to be the number one factor in choosing an insurer – rising from fifth, a year previously.

The latest report focused on four areas: fintech, cyber, health and credit risk, while also highlighting differences between EMEA and global trends.

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

Herman Kerremans, head of EMEA financial institutions at Aon, added: “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.”