Supervisory interactions increased by 33%, financial services regulator says

The Malta Financial Services Authority carried out 1,345 supervisory interactions with licence-holders in 2024, a 33% increase over the previous year, its annual report shows.

This figure includes all types of interactions, from mystery shopping exercises to supervisory inspections and meetings.

The report, which was tabled in parliament by Finance Minister Clyde Caruana on Monday, shows that the financial services regulator carried out 134 enforcement actions. Of these, 126 resulted in administrative penalties, while two operators had their licence cancelled. The authority also issued four directives and two reprimands.

The MFSA levied penalties that totalled €926,485 of which €735,993 related to cases that were settled. Seven police reports were filed about scams and unauthorised business.

In a media briefing, MFSA CEO Kenneth Farrugia said the authority regulated 2,380 institutions at the end of 2024, a 3.3% increase over the previous year.

Farrugia said the authority more than doubled its employees since 2020 and now employed 519 full-time workers, a reflection of increased regulatory oversight and supervision.

Nonetheless, Farrugia said the MFSA was aligned with the perspective espoused by several EU jurisdictions in favour of cutting excessive red tape.

“The EU as a whole has a problem of overregulation and the MFSA is in favour of more streamlining and simplification of the rules without diluting regulatory oversight,” he said.

Farrugia stressed the financial services industry can never be risk-free. “We will always have that bad apple slipping through the net despite all our best efforts. But what is important is that when a problem is identified, action is taken immediately,” he said, adding the MFSA was constantly vigilant.

One such area of vigilance concerned consumer protection, where a team of 30 people carries out mystery shopping exercises, website reviews, advert scrutiny, issues public warnings and engages in financial literacy programmes.

The report said that the MFSA stepped up efforts to safeguard consumer interests in 2024 by identifying emerging risks early and guiding companies toward “fairer, more transparent practices”.

Financial services sector

In its overview of the financial services sector, the MFSA said the industry now accounts for 8.2% of the country’s real gross value added (GVA), a 0.2 percentage point increase over 2023.

Employment in the sector stood at 14,745 individuals as of October 2024, equivalent to 5.1% of Malta’s gainfully employed population. Since 2020, the sector’s workforce grew by 21.6%.