Dedicated Innovation Office

Ongoing | September 2018

Building on the expertise gained from the development of the Virtual Financial Assets (‘VFA’) Framework and as indicated in its FinTech Strategy, the Malta Financial Services Authority (‘MFSA’ or ‘Authority’) established a dedicated function, the FinTech and Innovation Function, as initially named, and later the FinTech Supervision Function, which focuses on FinTech and the operationalisation of the VFA Framework.

Through engagement and collaboration with the other supervisory functions within the Authority, this function is mandated, amongst other objectives, (i) to monitor, understand, and assess the developments and implications of the use of innovative technology and digital transformation occurring within financial services especially within the Maltese Financial Services sectors, (ii) to drive the MFSA’s culture, and (iii) deliver a cross-sectoral platform of tools and knowledge which can support the MFSA’s functions in enabling the financial services of tomorrow.

MFSA FinTech Strategy

Published | May 2019

Positively received by all stakeholders, the MFSA FinTech Strategy presented a wider, cross-sectorial approach towards the Authority becoming an enabler of technology-enabled financial innovation within the Maltese Financial Services market by focusing on six strategic pillars of Regulation, Innovation, Architecture, Knowledge, International Links and Security.

MFSA FinTech Regulatory Sandbox

Launched | July 2020

As part of the MFSA FinTech Strategy, the MFSA established its FinTech Regulatory Sandbox (‘Sandbox’) in July 2020. With the objective to understand the regulatory gaps and challenges faced by innovative technology-enabled solutions, the Sandbox provides for a regulatory environment within which technology-enabled solutions may test their innovation for a specified period of time within the financial services market under certain prescribed requirements.

GFIN Membership

Ongoing | November 2020

As part of the MFSA’s initiative to enhance its international links, the MFSA became an official member of the Global Financial Innovation Network (‘GFIN’). Comprised of a network of not less than 70 National Competent Authorities, GFIN’s purpose is to help innovative financial services providers to interact with regulators to scale and test new ideas, and as means of cooperation between financial services regulators in relation to innovation-related topics.

European Digital Finance Package – Working Group

Ongoing | January 2021

With the objective to modernise the European economy and establish a competitive EU-wide financial services sector that provides access to innovative financial products while preserving consumer protection, market integrity and financial stability, the European Commission implemented the Digital Finance Package (‘DFP’), consisting of a digital finance strategy, legislative proposals on crypto-assets, digital resilience, and a renewed retail payments strategy.

The MFSA set up an internal working group to holistically address the policy developments arising from the European DFP, with attention being given to the needs and specificities of the Maltese financial services industry.

FinTech Renewal

Ongoing | January 2022

Building on the lessons learnt and recommendations by various stakeholders, the MFSA renewed its commitment towards continuing its journey in becoming an enabler of sustainable, technology-enabled financial innovation and digital finance within the financial services sector. This will be ensured by providing a supportive regulatory environment that is built on global standards, contributes to sustainable growth within the financial services market, and achieves investor protection, market integrity and financial soundness.

This renewed offering focuses on three main areas, namely (i) regulatory guidance; (ii) the MFSA’s innovation facilitators; and (iii) stakeholder collaboration.

FinTech Adoption Study

Published | July – March 2022/2023

In line with the MFSA’s mandate to monitor, understand, and assess the developments and implications of the use of innovative technology and digital transformation occurring within the Maltese Financial Services sector, the Authority is currently undertaking a FinTech Adoption Study (‘FAS’) with the aim to assess the adoption of FinTech locally as well as understand the market conditions and risks within this space. This study will also provide the MFSA with the necessary insight to carry out further supervisory engagement and drive policy in this area going forward.

MFSA FinTech Regulatory Sandbox – 2.0

Ongoing | September 2022

Building on the knowledge, expertise and experience gained since the development of the MFSA FinTech Regulatory Sandbox, the Authority is in the process of updating its Sandbox, introducing the second version of the Rule 3 which aims to enhance and provide a more concise and efficient Sandbox Lifecycle process.

EU Supervisory Digital Finance Academy

Ongoing | July 2022

The MFSA was nominated to participate within the EU Supervisory Digital Finance Academy (‘EU-SFDA’) following an application under the EU Technical Support Instrument Programme with the aim to strengthen supervisory capacity surrounding innovative digital finance. This initiative is a European Commission flagship project initiated as part of the EU Digital Finance Strategy.

Participation within the EU-SFDA provides the MFSA further knowledge relating to risks and opportunities surrounding emerging technology in finance with the aim of enhance consumer protection, safeguard market integrity, and maintain financial stability on an EU-wide scale. To this end, the flagship project offers a platform which provides training to better understand the area of FinTech and develop better supervisory practices.

Digital Transformation and Fintech Adoption Survey

Published | March 2023

A survey conducted by the MFSA in 2022, among 390 Authorised Entities, finds that over 50% of financial services entities surveyed have taken actions towards digitisation, digitalisation, or the implementation of enabling technologies and innovations. With a response rate of 95%, the study shed light on the state of digital transformation and FinTech adoption within the Maltese financial services sector.

MFSA FinTech Regulatory Sandbox – 2.0

Ongoing | March 2023

The revised MFSA FinTech Regulatory Sandbox takes into consideration the lessons learnt over the past two (2) years, feedback from the industry outreach carried out over 2022, and best practises adopted by other regulatory sandboxes established across Europe and the globe. Additionally, the revision of the Sandbox Framework does not only include the update to Rule 3 under the MFSA Act, but also various actions taken to revaluate every aspect of the Sandbox framework with the aim to operationalise it efficiently and effectively, including a revised Proposal Form and Application Stage.