Financial Crime World

Malta’s Banking Industry Standards on Par with Global Giants

A recent report by the World Economic Forum ranked Malta 38th out of 141 countries worldwide in terms of its local financial system, a testament to the country’s robust banking industry. The sector has remained largely unscathed by global economic crises, including the 2008 financial meltdown.

Malta’s Banking Sector

According to data from May 2023, there are:

  • 17 locally licensed credit institutions
  • 2 branches of foreign banks operating on the island

This impressive number is all the more remarkable given Malta’s small size, measuring just 316 square kilometres.

Regulatory Framework

The Central Bank of Malta categorizes banks into three distinct categories:

  • Core Domestic Banks
  • Non-core Domestic Banks
  • International Banks

Since the introduction of the Single Supervisory Mechanism in November 2014, the local regulator, the Malta Financial Services Authority (MFSA), has been jointly supervising the country’s largest domestic banks with the European Central Bank.

Malta as a Financial Hub

Malta’s reputation as a robust, tax-efficient, and well-regulated EU member state has made it an attractive destination for financial services players. The introduction of the Payments Services Directive II has encouraged the emergence of payment institutions and electronic money institutions, with over 50 financial institutions obtaining their licenses from the MFSA to date.

KPMG’s Expertise

In this highly regulated environment, KPMG’s experienced audit, tax, and advisory teams provide support to the majority of banks and financial institutions on the island. Our local advisors can leverage expertise from other member firms, including the KPMG ECB Office, which specializes in issues related to the SSM.

Services Offered

Our banking and financial institution experts offer a wide range of services, including:

  • External and internal audit services
  • Project managing regulatory authority applications for banking licenses
  • Mergers and acquisitions processes
  • Assistance with ensuring regulatory compliance
  • Actuarial services
  • Accounting advice
  • Risk management reviews
  • Tax advisory, compliance, and structuring services

Compliance Support

As banks and financial institutions face increasing regulatory burdens, our experts can assist in navigating these challenges. We offer a range of support services to the compliance function, including:

  • Developing a Compliance Obliging Register
  • Performing a Compliance Risk Assessment
  • Delivering compliance-related training
  • Co-sourcing the Compliance Function

Risk Management Support

We also provide assistance to the risk function, helping with:

  • Developing a Risk Management Framework
  • Delivering risk management-related training
  • Co-sourcing the Risk Function
  • Setting up the Risk Function

Other services offered include:

  • Agreed-upon procedures
  • Limited assurance engagements
  • Ad hoc regulatory advice
  • Individual and collective Board Assessments

Get in Touch

For more information on how KPMG can support your banking or financial institution, please contact us.