No Secondary Market for Malta’s Loans: Correspondent Banks Wary of Jurisdiction’s Risks

Malta’s small size and limited volume of business have raised concerns among correspondent banks about the risk-reward balance. The country’s institutions face a high risk of money laundering, particularly in the iGaming industry, which has led some major banks to withdraw their services.

Challenges in Accessing Foreign Markets and Currencies

Deutsche Bank and ING Bank’s departure from Malta has left local businesses struggling to access foreign markets and currencies for international trade. This has had a devastating impact on the iGaming sector, which relies heavily on seamless payment processing.

Risk of being Grey-Listed

Malta’s reputation as a financial hub is at risk of being tarnished by its perceived lack of effectiveness in tackling money laundering. If this persists, the country may be grey-listed, leading to further deterioration in correspondent banking relationships and potentially causing industries to flee the jurisdiction.

Implementing Robust Anti-Money Laundering Measures

In an effort to mitigate these risks, banks and iGaming companies are working together to implement robust anti-money laundering measures. However, some experts argue that a solvency regime for iGaming companies could provide additional assurance to investors and players alike.

The Need for Greater Transparency and Stricter Regulations

The debate surrounding a solvency regime highlights the need for greater transparency in financial reporting and stricter regulations to protect player funds. While some industry leaders are skeptical about the value of such a regime, others see it as a crucial step towards establishing Malta as a trusted and reputable destination for iGaming business.

The Importance of Technological Innovation and Cybersecurity

Despite these challenges, both banks and iGaming companies recognize the importance of technological innovation and cybersecurity measures to stay ahead in an increasingly competitive market. The risk of falling behind in adopting new technologies and failing to launch innovative products is a constant threat, making it essential for businesses to prioritize investment in digital transformation.

Correspondent Banks’ Wariness

As Malta navigates this complex landscape, it is clear that correspondent banks will remain wary of the jurisdiction’s risks until there is significant progress in tackling money laundering and implementing effective regulatory frameworks.