Financial Crime World

Cloud Computing Applications Dominate Maltese Financial Services Sector

Embracing Innovation in the Financial Services Industry

Malta’s financial services sector is rapidly adopting cloud computing applications, with a recent survey revealing that 80% of financial institutions have already implemented cloud solutions. The top five enabling technologies being adopted by financial institutions include web and mobile applications, WfMS, big data and data analytics, digital platforms, and RPA.

Key Findings

  • 80% of financial institutions have implemented cloud computing solutions
  • Most deployments took place in 2021
  • Adoption is expected to continue, with digital platforms set to be deployed by 2022, WfMS by 2023, and big data and data analytics by 2024
  • Access to the European Single Market (ESM) was a significant motivator for financial institutions adopting enabling and innovative technologies

Challenges and Concerns

  • Local political factors were considered a challenge by many institutions
  • Data privacy frameworks and requirements were a major concern for financial institutions
  • Cyber risk, operational risk, and reputational risk were identified as significant risks associated with cloud computing, web and mobile applications, and APIs

Impact on the Financial Services Landscape

  • The adoption of cloud computing and other enabling technologies has had a significant impact on payment services, payment infrastructures, and commercial banking
  • A positive impact was reported to significantly outweigh any negative effects
  • However, some financial institutions reported negligible but significant negative impacts on areas such as reinsurance and insurance

Positive Effects

  • The adoption of cloud computing, APIs, and web and mobile applications had the highest positive effect on the financial services landscape

Conclusion

Despite risks associated with cloud computing and other enabling technologies, most financial institutions believe that the increase in risk is low. This suggests that there are no imminent threats to financial stability in Malta’s financial services sector.

The Financial Authority of Malta (MFSA) Digital Transformation & FinTech Adoption Initiative

The MFSA conducted the survey as part of its initiative to monitor and understand the developments and implications of digital transformation and FinTech adoption in Malta’s financial services sector. The aim is to better understand the risks and opportunities associated with these technologies and inform supervisory engagement and policy-making activities.

“The FAS provides valuable insights into the adoption of enabling technologies and innovations in Malta’s financial services sector,” said a spokesperson for the MFSA. “The results will help us to better understand the risks and opportunities associated with these technologies and inform our supervisory engagement and policy-making activities.”