A customer receives a convincing email appearing to come from their fintech payment provider. The sender requests account verification. The customer, believing it’s legitimate, enters their credentials. Minutes later, funds transfer to an unfamiliar account. The customer holds the provider liable. The provider looks to insurance. But which policy covers this? The answer is simpler than most providers think: Crime insurance.
Social Engineering Fraud Is a Crime Issue
When a customer is deceived into voluntarily transferring funds, that’s fraud. Fraud falls under Crime insurance.
This is straightforward. Social engineering fraud—a voluntary transfer triggered by deception—is not a security breach. The system didn’t fail. The provider didn’t get hacked. A customer was tricked into authorizing the transaction.
Cyber insurance covers security failures and breaches. Crime insurance covers theft and fraud. Social engineering fraud is fraud, which means it belongs under Crime.
Most fintech providers don’t realize this. When social engineering fraud occurs, they look first to Cyber insurance. They debate whether it’s a security incident. They get entangled in discussions about whether “voluntary parting” defeats the claim. Meanwhile, their Crime policy likely already covers it—but they don’t know the terms.
Why This Matters for Fintech
Social engineering is the most common attack vector against payment infrastructure. It requires no technical sophistication. A convincing message. A customer willing to act. That’s it.
In 2024, Singapore recorded S$1.1 billion in losses to social engineering scams, a 70% year-over-year increase. Fintech payment customers were the primary targets. These weren’t system failures or security breaches. They were customers tricked into authorizing transfers through convincing impersonation of payment providers, banks, and trusted institutions. The losses fell directly on the fintech providers caught in the middle.
The impact is immediate. Customer accounts drained. Credentials compromised. Payment instructions unauthorized. The customer demands recovery. The fintech provider is liable.
Understanding that social engineering fraud falls under Crime insurance is the first step. The second step is understanding your specific Crime policy terms.
What Crime Insurance Actually Covers
Crime insurance protects against theft, fraud, and dishonesty. Social engineering fraud—where an outsider deceives a customer into transferring funds—fits squarely within this definition.
But not all Crime policies handle social engineering the same way. Some explicitly cover it. Some sub-limit it. Some exclude it under “voluntary parting” language, arguing that because the customer willingly gave the money, it’s not a covered loss.
This is where policy language matters. Your specific Crime policy terms determine whether social engineering fraud is covered, at what level, and under what conditions.
What Fintech Providers Need to Check
Before social engineering fraud occurs, fintech payment providers should review their Crime policy for three specific things.
First, does your Crime policy explicitly cover social engineering fraud? Some policies are silent on it. Some explicitly include it. Knowing which one you have is critical.
Second, if social engineering fraud is covered, what are the conditions? Are there “voluntary parting” exclusions? Are there specific trigger requirements? Is the coverage tied to particular scenarios?
Third, what does your coverage actually apply to? Does it cover customer losses that your provider is liable for? Does it cover internal fraud attempts? Does it cover wire fraud specifically?
If you can’t answer these questions from your policy documents, ask your broker. If your broker can’t answer clearly, that’s a sign the policy needs review.
The Conversation to Have with Your Broker
Before renewal, fintech providers should have a specific conversation with their broker about social engineering fraud coverage.
The question is simple: “What does our Crime policy cover for social engineering fraud?”
The answer should be equally clear. It should specify whether social engineering is covered, what scenarios it applies to, any exclusions or conditions, and what happens when a social engineering attack occurs.
If the answer is vague or hedging, that’s your signal to address it. Crime insurance terms are negotiable. If social engineering fraud isn’t covered adequately in your current policy, it can be negotiated into your renewal.
Alignment Across Policies
Fintech providers often carry both Cyber and Crime insurance. Understanding where each one sits prevents confusion when losses occur.
Cyber insurance covers security failures, data breaches, and system compromises. Crime insurance covers theft, fraud, and dishonesty—including social engineering fraud.
The key is clarity. Each policy should have clear language about what it covers and what it doesn’t. When social engineering fraud occurs, there should be no ambiguity about which policy responds.
This requires deliberate review before renewal. Many providers operate with only a vague sense of what’s covered. That’s the gap.
Understand Your Coverage Before the Attack
Fintech payment providers operate in an environment where social engineering attacks are inevitable. They will happen. Right now, in Southeast Asia’s most developed fintech hub, they’re happening at scale. When they do, recovery depends on understanding your Crime insurance coverage.
Social engineering fraud is a Crime insurance issue. Your specific policy terms determine what’s covered. Understanding those terms before an attack occurs—not after—determines whether claims are paid or disputed.
Take the step now. Review your Crime policy for social engineering fraud coverage. Ask your broker the specific questions. Understand what you’re actually covered for. Fintech providers who do this before an attack occurs have clarity when they need it most.
Continuum helps fintech payment providers decode their Crime policies to understand exactly what social engineering fraud coverage they have and what their specific terms cover.
Let’s review your Crime policy before the next social engineering attack occurs. Contact us to understand your fintech fraud coverage.
