Financial Crime World

Malta Fintech Companies Must Ensure Regulatory Compliance

The Malta Financial Services Authority (MFSA) has taken significant strides to create an enabling environment for fintech companies, promoting innovation in the financial services sector.

A Cross-Sectorial Approach to Enabling Fintech Innovation

The MFSA’s FinTech Strategy, published in 2019, outlines a six-pillar approach to enable fintech innovation:

  • Regulation: Providing a regulatory framework that supports innovation
  • Innovation: Encouraging the development of new financial products and services
  • Architecture: Developing the necessary infrastructure for fintech companies
  • Knowledge: Sharing expertise and best practices in fintech
  • International Links: Building connections with international organizations and networks
  • Security: Ensuring the security and integrity of fintech solutions

Initiatives to Support Fintech Companies

The MFSA has launched several initiatives to support fintech companies, including:

  • FinTech Regulatory Sandbox: A regulatory environment where fintech companies can test their innovative solutions for a specified period under certain prescribed requirements
  • Membership in the Global Financial Innovation Network (GFIN): A network of national competent authorities that aims to help fintech providers interact with regulators and scale new ideas

Ongoing Efforts

The MFSA is:

  • Undertaking a FinTech Adoption Study: Assessing the adoption of fintech in Malta, understanding market conditions and risks, and providing insights for further supervisory engagement and policy development
  • Updating the FinTech Regulatory Sandbox: Introducing a more concise and efficient sandbox lifecycle process
  • Participating in the EU Supervisory Digital Finance Academy: Strengthening supervisory capacity surrounding innovative digital finance

Survey Findings

A recent survey conducted by the MFSA found that:

  • Over 50% of financial services entities surveyed have taken actions towards digitisation, digitalisation, or the implementation of enabling technologies and innovations
  • The survey sheds light on the state of digital transformation and fintech adoption within the Maltese financial services sector

Conclusion

In conclusion, fintech companies operating in Malta must ensure regulatory compliance with the MFSA’s various initiatives aimed at promoting innovation in the financial services sector.