Banks not at par with government’s aspirations for financial sector, says PM

Banking institutions are not operating at the same pace as the government’s aspirations to move forward in the FinTech industry, Prime Minister Joseoh Muscat has said.

Muscat said FinTech was the natural evolution for financial services in Malta, but complained that banks had to developer further to innovate and take advantage of Malta’s good technology sector and robust regulatory framework.

 “Technology has become pivotal for the financial services industry,” Muscat told FinanceMalta’s 12th annual conference. “A new wave of innovation has opened new horizons for the industry, and it will be markedly different in the next decade from the past ten years.

“Technology will change how business is done – customers, providers of services and competition will be different. It will enable new players to enter the market […] and also to meet unfulfilled customer needs.”

The steps the government took in the last year when it comes to Distributed Ledger Technologies and positioning Malta as “the Blockchain island” were testament to its drive to innovate, Muscat noted.

However, he stressed that educational institutions had to be further developed so as to upskill people to cater for financial services developed, and foreign talent should also be attracted to Malta.

“We need to further develop local talent by upping our educational institutions to cater for these developments,” he said, “But we must also look towards Europe and the world to attract the right talent to enable Malta to compete internationally.”

The government’s role in this area was “to act as a facilitator”, he said.

“This does not mean relaxing systems. It means strengthening the regulatory framework and the country’s financial regulator. The Malta Financial Services Authority is looking to create a safe area for FinTech […] which attracts quality not quantity in the industry.”

There were also “problems and threats to growth”, he noted. “We must say clearly that we must develop our banking institutions, which are not moving at par with governments' aspirations to move forward,” he said.

The Prime Minister added that the government was undertaking a consultation process to build a FinTech strategy, based on solid regulation, constructing the required ecosystem, widening links, increasing knowledge, and strengthening security.