While small in scale and limited by natural resources, Malta's financial services sector has seen impressive growth in recent years and was reported to have contributed nearly nine per cent to the country's GVA in 2023, employing over 19,000 people equalling 5.1 per cent of the workforce. However, its future was called into question after Malta was temporarily placed on the FATF greylist in 2021, an issue which was further intensified by the challenges of an increasingly complex European regulatory landscape.

As a public-private initiative set up to promote Malta as a financial centre, FinanceMalta has been at the forefront of addressing these challenges and more. Chief Strategy Officer Bernice Buttigieg has played a key role in steering efforts to revitalise Malta’s financial services sector and ensuring Malta remains competitive in the global landscape: “To achieve this long-term goal, we recognised that it’s important that everyone, from government bodies and practitioners to lawyers and advisors, should be working together and pulling the same rope. That’s what led to the creation of the Malta Financial Services Advisory Council (MFSAC).”

MFSAC is overseeing a long-term strategy, which aims to tackle immediate challenges and set the stage for further growth. Chaired by Joseph Zammit Tabona, the council brings together 15 working groups, each focused on key areas like banking, insurance, fintech, and broader issues such as bureaucracy, taxation, and sustainability. This collaboration led to a comprehensive 10-year strategy launched in March 2023, featuring 175 action points.

What’s more, the strategy was developed with input from over 100 experts, including major players like the Malta Financial Services Authority (MFSA), Financial Intelligence Analysis Unit (FIAU), Malta Business Registry (MBR), and the Malta Tax and Customs Administration (MTCA). This approach has ensured that the strategy is aligned with actual realities the sector is facing, with the council being able to draw valuable insights from within the industry to more effectively address its evolving needs and challenges.

“Making sure such a vast strategy is being put into action is no small task,” explains Dr Buttigieg. “That’s why a Program Management Office is actively overseeing MFSAC’s objectives, to ensure all action points are being implemented. It’s also important for us to keep this strategy alive and relevant. Every 18 months, we re-evaluate the plan to bring in new ideas and ensure that recommendations are being carried out, not just left on paper.”

Dr Buttigieg goes on to explain that the strategy is built on five key drivers: Speed, Standards, Simplification, Specialisation, and Sustainability. Each is designed to fuel the sector's growth, from speeding up regulatory approvals to fostering talent and expertise in niche areas.

“Simplification is especially crucial because we want stakeholders to focus less on red tape and more on innovation. But even simplification is not something that can be achieved overnight. It requires a lot of work, research, and collaboration to ensure the right processes and systems are put into place,” she notes.

In this light, the MFSAC is embracing digital solutions and AI to streamline bureaucratic processes, create efficiencies, and reduce the administrative burden on companies. Recent initiatives have included legislative updates aimed at strengthening Malta’s insurance and reinsurance sectors. The Malta Stock Exchange is also enhancing sustainable investment opportunities, while the Malta Business Registry is preparing a Central Identity Management system, which will simplify information sharing critical for compliance and due diligence.

In addition to improvements and enhancements, the MFSAC has also helped position Malta as a leader in several promising growth areas. Dr Buttigieg notes: “We were one of the first countries to regulate the crypto sector, and today we have around 15 companies operating on the island. Our focus here has been on quality over quantity. We want to attract and be a home to reputable businesses that contribute positively to our industry.”

Malta’s insurance sector has captured global attention. Many leading companies in the industry have set up operations on the island. Notably, Malta is the only full EU member state with Protected Cell Company (PCC) legislation, introduced as early as 2004. Looking ahead to 2025, FinanceMalta plans to focus its promotional efforts on several key sectors, including Aircraft Leasing, Insurance (with a special focus on Protected Cell Companies and Insurance-Linked Securities), Family Offices, Sustainable Investments, Fintech & AI, along with Capital Markets and Wealth and Asset Management. These efforts are closely aligned with the MFSAC's broader strategy for the future.

Dr Buttigieg remains positive: “Coming off the FATF grey list in under a year was a significant achievement. It’s important to note that we didn’t just do what was necessary, but we went above and beyond to improve our standards and adapt to EU requirements all the while remaining open to business. It was a delicate balance to achieve, but we’re confident it’s now working well for all operators, stakeholders, and regulators. In fact, in 2023 there were 948 new registrations to open a business unit in our financial and insurance activities sector. That is 81 more registrations than in the previous year.”

FinanceMalta has also been focussing on education, ensuring that the true story about Malta is being conveyed to counter any lingering negative perceptions. As Dr Buttigieg candidly notes, “I think it’s safe to say Malta had got a bit too comfortable and slowed down on networking, in part due to the pandemic effect, but in recent years, we’ve really ramped up our efforts, building strong relationships with international partners and entities, to re-establish trust.”

As part of the World Alliance of International Financial Centers (WAIFC), FinanceMalta is now actively engaging with counterparts across Europe, Africa, and Asia, with Dr Buttigieg appointed to the WAIFC board during the organisation’s recent Annual General Meeting held in Tokyo, Japan. This appointment is set to further elevate Malta’s standing in the global financial sector, reflecting the country’s increasing influence and reputation in the industry. Through greater collaboration, Malta is sharing insights on various topics and trends like supply chain finance and gender equality, contributing articles that showcase our initiatives and strengths. This approach is not only helping improve understanding and relationships but is opening doors for greater business opportunities for Malta’s financial sector.

Efforts to strengthen Malta’s financial sector and rebuild trust are showing positive results. From 2010 to 2023, the sector's GVA grew at an average annual rate of 10.2 per cent, and it was one of the few sectors to record growth during the pandemic, highlighting its resilience. In the first half of 2024, financial and insurance activities saw a 13.6 per cent increase in GVA compared to the same period in 2023, driven largely by financial services, which grew by 13.7 per cent. In September 2024, Fitch Ratings affirmed Malta’s ‘A+’ credit rating with a Stable Outlook.

While Dr Buttigieg is proud of the significant progress that both MFSAC and FinanceMalta have made so far, she acknowledges that the journey is far from over. “It’s been a very positive year. Financial activities are projected to grow by 12.4 per cent by the end of 2024, and we’ve seen hundreds of new business registrations in the past year alone. With the right strategy and commitment from all stakeholders, there’s no doubt that Malta is on the path to solidifying its status as a leading financial jurisdiction and capitalising on new opportunities.”