MFSA report shows sector up 9.5%
Regualatory stability and support for business reaps rewards for Malta’s financial services sector
An annual report on Malta’s financial service sector has been released by the MFSA. The stats show impressive growth for the Blockchain Island, revealing a 9.5% increase in 2018.
The country has sought to encourage new business by creating a stable regulatory framework for companies to operate within. In 2018 the government launched 3 much-lauded pieces of legislation on DLT during the inaugural edition of the Malta A.I. and Blockchain Summit, acts which have been key in encouraging the island to develop a reputation as a competitive hub for blockchain and other emerging technologies to flourish. The Virtual Financial Assets (VFA) Act came into force in November 2018 putting Malta at the foregront of distributed ledger technologies and digital assets.
A national strategy for A.I. has also been in the works, with a task force geared towards implementing mass adoption launching last year.
The MFSA said that, despite a challenging and highly competitive environment, it registered 144 new entities in 2018, with major players in the industry such as Binance leading the way, “as more businesses sought to make Malta their jurisdiction of choice, bringing the number of entities licensed by the MFSA up to over 2,300.”
The sector now contributes 11.6% of Gross Value Added (GVA), making it one of the highest-ranking contributors to the Maltese economy.
The MFSA focused on four specific areas during 2018:
- A restructuring and reform exercise in the organisational structure with the express aim of strengthening the Authority’s governance.
- Culture and conduct; combating money laundering and terrorist financing.
- Embracing technological innovation.
- Re-positioning the authority as a leading employer.
MFSA Chief Executive Officer Joseph Cuschieri explained that in view of the wide-ranging impact of money laundering and terrorist financing, an issue which has international ramifications, “the Authority will be strengthening its supervisory engagement, with the purpose of achieving our statutory objectives better, and this will, in turn, safeguard the reputation of Malta as a jurisdiction of choice for financial services. Whilst supervisory engagement shall be enhanced across the board, emphasis shall be placed on AML/CFT Supervision, in line with our AML/CFT Supervisory Strategy”.
At the end of 2018, the sector employed more than 12,000 people, 1,000 of which were new jobs generated last year. This brings the share of local employment within the financial services sector up to 5.3%, almost double that recorded for other member states of the European Union, which stands at 2.9%.
Speaking about the positive results, Parliamentary Secretary for Financial Services, Digital Economy and Innovation Silvio Schembri said, “Despite the fact that last year proved to be challenging for the financial services sector on an international level, Malta managed to consolidate and further grow this industry in a very significant and notable manner. In fact, as the results show, the financial services sector employed more than 12,000 people meaning that 1,000 new jobs were created last year”.
He explained that these successful results happened due to a restructuring process, which was set in motion 2 years ago within the Malta Financial Services Authority, which is transforming itself into an agile and dynamic regulator to reflect and adapt to today’s reality.
“As part of the continuous restructuring plan and the reform within the financial services sector, in the coming weeks, a consultative body will be launched which will serve as the forum of discussions between the government, the regulator and the industry to formulate a 10-year strategy for our financial services sector. Our ultimate aim is to make Malta a centre of excellence for the financial services sector”, concluded Silvio Schembri.