By Joe Zammit Tabona, Chairperson of the Malta Financial Services Advisory Council
The financial sector in Malta has grown consistently and rapidly during the past few decades, especially, since its membership in the EU back in 2004. The industry contributed €1.1 billion to the Maltese economy in Gross Value Added in 2022, up by 4.3% over the previous year, and has grown at a compound rate of 8.3% since 2010.
The industry is highly competitive, facing rapid technological and regulatory change, which requires swift action for Malta to maintain a competitive edge. Aware of the need to proactively future proof the industry, the Malta Financial Services Advisory Council (MFSAC) was set up in January 2021 with representatives from the various private sector and regulatory bodies to face up to this challenge. One of its core remits was to set up a long-term strategy for Financial Services and to oversee its implementation.
This strategy, which was launched on the 29th of March of this year, addresses core industry priorities, as drawn up by nine working groups. Its focus is on streamlining Malta’s regulatory processes and institutional architecture, addressing bureaucracy, building a national payments infrastructure, consolidating identity management, enabling financial services law reform and harmonisation, modernising Malta’s tax structure, and building up Malta’s talent pool in the financial services industry, among others. All in all, some 175 action points have been identified by the strategy that now need to be implemented.
Effort is now shifting to implementation mode with all the groups focused on translating their elements of strategy into specific plans of action. The projects themselves are clustered around different groupings. These include the five industry verticals, major strategic initiatives, new opportunity areas and supporting requirements, such as tax and operational effectiveness. Each grouping or workstream consists of a number of projects, each with their own deliverables and milestones and each have their own expectations in terms of outcomes.
To address the above, the Council has appointed a small Program Management Office, (PMO), which is led by Pier Massa and assisted by Dr Bernice Buttigieg from FinanceMalta. The PMO will ensure that the overall plan for implementation is captured in a single Masterplan and that these initiatives are baselined and followed through to their completion. The PMO will report back on progress, areas of difficulty and also support the teams through problem solving and escalation as required.
Taking a strategy from a document and tearing it down into what will be done, by whom and how and by when is a tough task that requires serious effort. In addition, many of the different workstreams have overlaps, so we are working with the different team leaders, who are responsible for their own workstream, to de-duplicate effort and ensure clarity around each and every project.
In particular, the MFSA has an important role to play in implementation, as do the other regulatory agencies involved. The MFSA has taken a leadership role in the strategy in mapping out all of the relevant MFSAC initiatives to its own internal strategy to ensure alignment and consistency in implementation. Similarly, these are now being mapped and being captured by the MFSA’s own program office for integration into the overall masterplan.
Through this work, a comprehensive masterplan is being put together by the Program Management Office to capture, track and manage the work moving forward, covering the initial implementation period between July 2023 and December 2024.
These projects include initiatives around the reduction of bureaucracy, digitization, amending and drafting new legislation, simplification of reporting processes, standardisation of reporting requirements across regulatory bodies, as well as incentives to develop new sectors within the industry. In particular, a number of studies will be carried out to scope the opportunities in sectors such as aviation and aircraft leasing, green and blue finance and fintech as well as insuretech.
The immediate objective is to identify the shortlist of priorities for implementation during this period. This will be made up of a mix of immediate quick win projects, focused on demonstrating commitment to the change and progress, and strategic, capital-intensive projects that span across multiple organisations and are complex to implement. These priorities will ensure focus and progress on the strategy and reduces the risk that the Council spreads itself too thinly by taking on too many concurrent activities. Once these priorities are set, the Masterplan will be updated accordingly and resources will be deployed to ensure that these deliverables are met.
“Ultimately, addressing the issues and opportunities identified in the strategy, while relatively easy to identify is a lot more complex to address. While the regulatory bodies themselves are already taking on a number of these issues internally, coordinating and integrating processes and technologies across regulators, government agencies and the private sector is much more complex. We have put together capable and experienced teams of people and processes to make this happen” states Mr. Joe Zammit Tabona, the Chairperson of the Malta Financial Services Advisory Council.
The public can access the National Strategy for Financial Services by visiting the following link: https://financemalta.org/publications/mfsac-strategy-document/.
