Malta’s Financial Institutions Face Compliance Risks Amid Digitalisation Boom
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As the world continues to digitise and financial institutions grapple with a surge in money laundering and financial crime, Malta has taken swift action by implementing stringent legislation and regulations to combat these threats. The country’s financial supervisory agency, the Malta Financial Services Authority (MFSA), has been granted improved international compliance ratings by Moneyval.
Compliance: A Critical Element in Maltese Businesses
In an era where risk management and due diligence measures are paramount, compliance has become a top priority for businesses worldwide. In Malta, this is particularly crucial given its rapidly developing financial and cryptocurrency sectors, iGaming industry, and IT economy.
The Financial Industry: A Hotbed of Compliance Activity
Malta’s strong financial sector has made it an attractive location for investors, banks, traders, and pension planners. To protect their reputation and encourage investment, financial institutions must research the latest compliance developments and continually update their systems. This includes:
- Adopting anti-money laundering (AML) software
- Training staff on AML practices
- Assembling evidence and documenting sources of wealth from investors and clients
Fintech: A New Frontier for Compliance
Malta’s advanced technology industry, strong financial sector, and wealth of IT and finance talent have made it an appealing location for Fintech companies. As this sector continues to grow, new guidance models and legislative frameworks will be required to assess risks and protect the industry and its investors.
Cryptocurrency: A Compliance Conundrum
Malta’s innovative stance on blockchain and cryptocurrency has attracted businesses seeking a crypto-friendly location. However, with the pseudonymous nature of cryptocurrencies making them vulnerable to money laundering risks, achieving compliance in this sector is critical.
iGaming: A Sector Prone to Money Laundering Risks
The rapid growth of Malta’s iGaming industry has led to an increase in money laundering risks. Tight regulations from the Malta Gaming Authority (MGA) require companies to:
- Conduct regular risk assessments
- Maintain diligent record keeping
- Frequently screen new customers and business relationships
IT and Cybersecurity: A Compliance Concern
Data and information security have become a major concern for all businesses in the digital era. Malicious cyber attacks can cause significant economic and social losses, making meticulous security compliance checks essential.
Artificial Intelligence: A Compliance Opportunity
The Maltese government is investing in AI to improve its services and boost its technological sector. While AI technology offers opportunities for cybersecurity and defence, it also presents potential risks that must be mitigated through compliance measures.
Compliance Professionals in High Demand
As the role of compliance has become integral in businesses, the career potential for legal and financial graduates and experts is excellent. Compliance officers play a critical role in minimising risk and adding value to companies, making them an essential part of any business strategy.
For more information on compliance job opportunities in Malta, contact Alessandro Binetti at +356 2034 1700 or alessandro@accelerate.com.mt.