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Compliance Risks in Banking in Malta: A Growing Concern

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A recent study has highlighted the importance of regulatory compliance in Maltese banking institutions, citing a need for greater emphasis on ethics, culture, and communication.

The Study’s Findings

The research, conducted by Dr. Karen Gatt from the University of Malta’s Faculty of Economics, Management and Accountancy, analyzed the approaches taken by major banks in the country to ensure compliance with ever-evolving regulations.

  • 221 non-compliance employees from five major Maltese banking institutions were surveyed.
  • The study found that while these institutions are generally well-equipped to handle today’s regulatory requirements, there is still room for improvement.
  • Dr. Gatt noted that “while ethics, culture, and communication are noted as being sufficient, more work may need to be done in the investment and implementation of compliance software to make full use of modern technology.”

The Importance of Organizational Culture

The study also explored the role of organizational culture in driving regulatory compliance, concluding that a strong ethical framework is essential for an effective compliance approach.

  • A set of internal obligatory rules are not sufficient on their own, but rather must be complemented by a culture that values transparency and accountability.
  • Dr. Gatt notes that “a strong ethical framework is necessary to ensure that employees understand the importance of compliance and are aware of their responsibilities in this regard.”

The Role of Communication

The study highlighted the importance of communication in ensuring regulatory compliance.

  • According to Dr. Gatt, “communication is key in ensuring that all employees understand the importance of compliance and are aware of their responsibilities in this regard.”
  • The study suggests that banks must invest in regular training and awareness programs to ensure that employees are equipped with the knowledge and skills needed to navigate the increasingly complex regulatory landscape.

The Impact of Technology

The research also touched on the impact of technology on banking and regulatory compliance.

  • Dr. Gatt notes that “advances in technology are revolutionizing both what people understand by banking and how banks can monitor and manage their risks.”
  • The study concludes that while banks must incorporate these technologies into their regulatory compliance frameworks, they must do so in a way that ensures transparency and accountability.

Conclusion

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The study highlights the importance of regulatory compliance in Maltese banking institutions, emphasizing the need for a strong ethical framework, effective communication, and investment in technology. As Dr. Gatt notes, “compliance is not just about checking boxes, but rather about creating a culture of transparency, accountability, and trust.”