Following an extensive consultation with key stakeholders, the MFSA has finalised its FinTech Strategy, a key document in the Authority’s efforts to position Malta as a global FinTech Hub. The MFSA has also published a feedback statement highlighting the feedback received. The key points identified by respondents were as follows:
1. Positive Feedback
The proposed Strategy was positively received, with respondents noting, that besides reflecting the needs of the market, it is aligned with the trends being observed within the FinTech sector and generally deemed to be an enabler of technology induced financial innovation.
2. Robust Vision, Mission and Six Pillars
Overall feedback indicates that while the Strategy’s Six Pillars are crucial towards attaining the long-term sustainability of the sector, the implementation of the Regulatory Sandbox under Pillar 1 - Regulations, the FinTech Innovation Hub under Pillar 2 - Ecosystem and Open Application Programme Interfaces under Pillar 3 - Architecture are key elements towards Malta’s establishment as a global FinTech Hub.
3. Three Main Drivers
Respondents also emphasised that, in order to achieve its vision, it is important that the Strategy focuses on sustainable financial innovation, open dialogue and efficient and effective implementation.
4. Threats and Implications
Main threats and implications foreseen by respondents were mainly five: (i) proportionality and level playing field issues; (ii) barriers to entry for FinTech start-ups and scale-ups; (iii) lack of access to resources by FinTechs and established financial services providers; (iv) security threats, particularly those relating to cybersecurity; and (v) regulatory arbitrage by FinTechs towards other European or third-country jurisdictions with lower regulatory costs and barriers potentially brought about by the Strategy.
The MFSA’s holistic vision in the FinTech sphere is to create an innovation friendly environment within the financial services sector whilst ensuring effective investor protection, financial market integrity and financial stability. Indeed, the MFSA has yesterday formally approved the first nine VFA Agents.