MFSA slaps €188,000 fine on Maltese ‘mobile phone bank’

A ‘mobile phone’ bank in Malta has been fined €188,445 by the financial regulator over several banking breaches.

The Malta Financial Services Authority said that between 18 July 2016 and 8 August 2016, Finnish-owned bank Ferratum, a subsidiary of Ferratum Oyj, had breached various provisions of the Banking Act and the technical criteria on governance arrangements and treatment of risks under the Banking Act.

The bank may appeal the decision of the Authority before the Financial Services Tribunal within 30 days from the date of notification.

Ferratum Group is an international provider of mobile banking and digital consumer and small business loans, distributed and managed by mobile devices.

Founded in 2005 in the Finnish capital of Helsinki, the bank now operates in 25 countries across Europe, Africa, South and North America and the Asia-Pacific region.

Ferratum’s mobile bank, launched in 2016, is an innovative mobile banking platform offering real-time digital payments and transfers, within a single app. It has approximately 1.9 million active and former customers who have an account or have been granted one or more loans in the past.

In 2017, it generated €221.6 million in revenues and an operating profit of €32.2 million.

The bank was licensed in 2012 to set up a Malta base to enter the European market.

Tonio Fenech, who as finance minister addressed the bank’s launch conference, later became a director of the bank after leaving government following the 2013 election. Another director of the Malta company is former Bank of Valletta CEO Charles Borg.