MFSA publishes FinTech Strategy for Malta
Following an extensive consultation with key stakeholders, the MFSA has finalised its FinTech Strategy. The MFSA’s vision is to establish Malta as an international FinTech hub which supports and enables financial services providers to infuse technology in product and service offerings to drive innovation.
The Maltese authority identified six key strategic pillars for the industry, being:
Regulations - Adopt regulatory and supervisory initiatives to support innovation and improve regulatory efficiency
Ecosystem - Foster community, demand and collaboration and enhance access to finance.
Architecture - Encourage collaboration through the adoption of Open APIs and shared platforms.
International Links - Build international links across jurisdictions to foster collaboration and trust.
Knowledge - Cultivate deep talent pools and stimulate research and collaborative ideation.
Security - Establish an environment that is resilient to cybersecurity threats.
The main players in the industry were also given time to provide feedback, and the main points identified by respondents were as follows:
1. Positive Feedback
The proposed Strategy was positively received, with respondents noting, that besides reflecting the needs of the market, it is aligned with the trends being observed within the FinTech sector and generally deemed to be an enabler of technology induced financial innovation.
2. Robust Vision, Mission and Six Pillars
Overall feedback indicates that while the Strategy’s Six Pillars are crucial towards attaining the long-term sustainability of the sector, the implementation of the Regulatory Sandbox under Pillar 1 - Regulations, the FinTech Innovation Hub under Pillar 2 - Ecosystem and Open Application Programme Interfaces under Pillar 3 - Architecture are key elements towards Malta’s establishment as a global FinTech Hub.
3. Three Main Drivers
Respondents also emphasised that, in order to achieve its vision, it is important that the Strategy focuses on sustainable financial innovation, open dialogue and efficient and effective implementation.
4. Threats and Implications
Main threats and implications foreseen by respondents were mainly five: (i) proportionality and level playing field issues; (ii) barriers to entry for FinTech start-ups and scale-ups; (iii) lack of access to resources by FinTechs and established financial services providers; (iv) security threats, particularly those relating to cybersecurity; and (v) regulatory arbitrage by FinTechs towards other European or third-country jurisdictions with lower regulatory costs and barriers potentially brought about by the Strategy.
The MFSA’s holistic vision in the FinTech sphere is to create an innovation friendly environment within the financial services sector whilst ensuring effective investor protection, financial market integrity and financial stability. Indeed, the MFSA has recently formally approved the first nine VFA Agents.
Dr. Francesco Sultana
Kinanis Fiduciaries Limited
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companies are conducting business, each of which is a separate legal entity.