National strategy for financial services launched

The National Strategy for Financial Services, prepared by the Malta Financial Services Advisory Council (MFSAC), has been launched.

The strategy represents a unique process: it was initiated by the Government with the active contribution from both the industry and the regulators. In a statement by Finance Malta, the public-private organisation said that the strategy is the result of over 100 professionals who worked together to elaborate concrete actions to address key opportunities and mitigate the weaknesses of the sector.

Finance Malta added that the “comprehensive and multi-sectorial strategy is based on a detailed analysis of the financial services industry conducted by task forces composed of representatives from all the stakeholders involved”.

The MFSAC, chaired by Joseph Zammit Tabona, was set up by the Government in January 2021. One of its five terms of reference is to prepare a long-term strategic plan for Malta’s financial services industry. The strategy is now complete and will act as a cornerstone to reenergise this industry, building on a strong foundation to enabling Malta to position itself with a foundation of a reputable and successful international financial services jurisdiction that excels in innovation and responsiveness through a nimble and joined up regulatory framework and a robust technology foundation.  

The objective of the National Strategy for Financial Services is to further strengthen Malta’s position and performance in a professional and regulatory compliant manner, creating a digitally-enabled, easy-to-use financial system. This will drive growth for the industry and, as a result, spur growth in other areas related to this sector.

The core principles supporting this vision are anchored around speed, standards, simplification, specialisation and sustainability. These areas will all be critical for Malta to leapfrog to the next generation service offering in this industry.

The strategic priorities of the strategy are focused on streamlining Malta’s regulatory processes and institutional architecture, building a national payments infrastructure, consolidating identity management, enabling financial services law reform and harmonisation, modernising Malta’s tax structure, and building up Malta’s talent pool in the financial services industry, amongst others.

In total, the strategy includes upwards of 175 initiatives, developed with the input of 102 professionals who were involved in its development. During 2021, nine Working Groups were set up by the MFSAC Council, with the aim of identifying actions on five Vertical Pillars, namely Banking and Payments, Insurance and Pensions, Capital Markets, Wealth Management, and Fintech and AI, and Horizontal Enablers such as addressing Bureaucracy, Taxation, HR & Education and Sustainable Finance.

The MFSAC working groups included the active participation of the Financial Intelligence Analysis Unit (FIAU), the Malta Financial Services Authority (MFSA) and the Malta Business Registry (MBR), as well as the Malta Stock Exchange, the Commissioner for Revenue, FinanceMalta and all private bodies such as the Malta Bankers Association, the Malta Institute of Accountants, the Malta Institute of Taxation and the Institute of Financial Services Practitioners.

The context for the development of this strategy is that over the past 30 years, Malta built a strong, performance-based financial services industry, attractive to a multitude of global players and providing a trusted and stable base for business. Malta has been no exception in facing some significant challenges. In the wake of the Financial Action Task Force grey listing in July 2021, Malta responded with urgency, resulting in it being removed from the grey list by June 2022.

While Malta retains strong fundamentals, the MFSAC sees the opportunity to target a new era of digitally-enabled financial services and to re-assert Malta’s presence in a globally competitive marketplace and from a unique European perspective. The pandemic, the current geopolitical instability and the disruption that FinTech and technology in general have introduced are transforming the way business is done, and the strategy aims at identifying concrete ways for the jurisdiction to maintain and further strengthen its position as an international financial centre.

Joseph Zammit Tabona, Chair of the Malta Financial Services Advisory Council, commented: “This strategy is the fruit of all stakeholders working together towards a common objective. The private sector, government and regulatory bodies all worked together to identify tangible and meaningful changes that will significantly improve Malta’s performance in this sector. While not an easy change to implement, it will transform the industry and fully leverage the sector’s potential on the island. As we shift into implementation mode, working together becomes even more important.”

George Vella, Chairman of FinanceMalta, said: “The inclusive process that led to the presentation of this strategy shows that all stakeholders are deeply committed to keep Malta at the forefront of financial services. FinanceMalta will continue to support the industry and is ready to contribute, as required, in all stages of the implementation of the strategy”.