The Future-Proofed Financial Service Firm: Insurance Insights for Risk Managers
In a sector where accuracy matters, risk must be managed with surgical precision. At Knightcorp Insurance Brokers, we work closely with Australia’s financial services providers—from boutique wealth managers to national fintech players—to design tailored insurance strategies that protect businesses and empower their growth. As 2025 unfolds, risk managers face a tall order: navigate an increasingly digitised—and closely regulated—risk landscape, while maintaining the confidence of clients, regulators, and shareholders.
Here’s what risk professionals in financial services should consider:
Regulatory Shakeups: The Year Compliance Gets Teeth
Compliance isn’t new. However, the cost of non-compliance is becoming steeper and reputationally risky. APRA and ASIC have signalled stricter enforcement around climate-related disclosures, operational resilience, and governance. The final phase of Basel III (aka Basel IV) implementation is already influencing how banks manage capital. Meanwhile, ASIC’s focus on greenwashing puts investment firms and super funds under heightened scrutiny.
As ESG regulations expand, so does the potential liability for directors and officers. One recent McKinsey survey notes that 85% of institutional investors globally say that the ESG profiles of companies are an important consideration in their investment decisions.
That brings boardroom accountability front and centre, making comprehensive Directors & Officers (D&O) Insurance more critical than ever. Directors & Officers (D&O) Insurance protects the personal assets of leadership and also safeguards companies from costs associated with unexpected regulatory investigations.
Digital Threat Vectors: Cyber Gets Personal
In 2024, IBM’s Cost of a Data Breach report found that globally, the financial services sector cost per breach was USD 6.08 million per incident—22% higher than the global average. The trend is clear: cyber criminals are no longer targeting just systems—they’re targeting individuals, credentials, and reputations.
Cyber Liability Insurance is now foundational for financial firms, especially those operating digital platforms or client portals. In the event of a breach, this policy helps cover associated costs such as forensic investigations, regulatory penalties, notification expenses, legal fees, and more.
But coverage must evolve as threats do. Basic policies may no longer cut it when facing ransomware-as-a-service, deepfake social engineering, or multi-vector phishing attacks targeting payment systems.
Litigation Risk: Class Actions Are on the Rise
Financial advice, lending practices, and investment products remain under intense scrutiny. Class action activity is trending upward, particularly against superannuation funds and retail investment managers. Professional Indemnity (PI) and Management Liability coverage remains critical, but generic policies often leave gaps around product disclosure, digital advice models, and outsourced service failures.
Professional Indemnity (PI) and Management Liability coverage is a vital policy consideration as it protects companies against claims of negligence, errors, or omissions in the delivery of professional counsel and services.
Future-focused risk managers are pressure-testing policies against real-world scenarios. What happens if your AI investment tool malfunctions? What if a third-party partner suffers a breach? How does your policy respond? It’s critical to know the answer.
In Closing: Risk Strategy As Growth Strategy
Because financial services include various business types, companies in the sector need insurance tailored to their specific risk profile. Brokers with deep risk intelligence are invaluable partners in the evaluation process. Whether examining exposures in your tech stack or studying the legal jurisdiction of your client base, Knightcorp can deliver proactive insurance strategies that become a competitive advantage.
How? Strong insurance often translates into better investor confidence, a stronger reputation with regulators, a higher likelihood of attracting and retaining top leadership talent, and even a more confident risk appetite, knowing your protection is already in place.
If you’re a risk manager looking to future-proof your organisation in an industry where everything is moving fast, we’re here to help. Let’s rethink your cover before you need it.
DISCLAIMER: This information is provided to assist you in understanding the risks, implications, and common considerations for your industry. It does not constitute advice and is not complete. Please contact Knightcorp Insurance Brokers for further information.
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For advice specific to your insurance needs, please contact your Knightcorp Insurance Brokers directly.
