The fintech sector in Malta is experiencing notable growth at an impressive pace, placing the market in the spotlight. Mastercard, a global technology company in the payments industry, unveiled at the FinanceMalta 16th Annual Conference, insights from an in-depth analysis of Malta's fintech landscape. The study shed light on the vital contributors from both public and private sectors that fuel the local fintech ecosystem’s expansion. Through this analysis, Mastercard identified the key segments and players, as well as trends, developments and insights.

Supporting ecosystem

Mastercard mapped the supporting ecosystem of Malta's Fintech landscape into five categories: Government and regulators as part of the public sector, and financial institutions, private funding entities, and other essential enablers as part of the private sector.

Within the public sector, the Maltese Government supports the fintech ecosystem through several Government-backed organisations acting as enablers, connecting the industry with the regulators. Although there is no dedicated Government-backed organisation for the fintech segment, these entities collaborate to promote initiatives, events, and schemes for the sector while facilitating access to funding programs. The initiatives that are run by these institutions and that can be applied by fintech sector form part of the general startup ecosystem, and are usually one-offs rather than recurring or consistent.

In terms of regulators, there are two key players in the Maltese market which hold an instrumental role in shaping the local fintech landscape. It is worth mentioning that Malta has invested in developing forward-looking regulatory frameworks, such as the DTL Framework and the Fintech Regulatory Sandbox, which have set global standards, creating an environment conducive for growth.

With regards to the support of the financial institutions to the Maltese fintech segment and the overall interaction between them, Mastercard's research indicates that there is a significant area of opportunity for incumbent players to actively engage, in terms of support and partnerships, with the local fintech sector. In fact, if this opportunity is leveraged, it will benefit both the fintech segment but also the existing traditional banking segment, Mastercard’s findings show.

Mastercard's study also revealed that there is great potential in leveraging domestic private funding sources, emphasisng the importance of local investment. While the existing private funding sources focus on broader tech sub-industries, putting a focus on the fintech segment could significantly enhance its growth.

Finally, a small number of Malta-based private start-up accelerators and incubators were identified. These enablers have a broad scope, usually focusing on tech-related startups, and they include Fintech companies too. In addition to funding sources, such enablers can play a crucial role in the development of the locally grown Fintech ecosystem as well as attract foreign startups to relocate to Malta.

Malta’s Key Fintech Players & Segments

Mastercard also analysed five Fintech related segments that have a substantial local presence. The segments identified are:

1. Blockchain and crypto– This segment utilises blockchain technology for innovative solutions and offers crypto-related services. Malta hosts 17 companies in this sector and despite the crypto-friendly environment in Malta and signs of early success, attracting crypto Fintechs leaves room for potential growth.

2. Payments– This segment develops payment-related products and services, including acquiring solutions, account-to-account transfers, and peer-to-merchant transactions. 25 mature payment Fintechs operate currently in Malta, offering innovative solutions beyond traditional payments, venturing into emerging areas such as Embedded Finance and Banking as a Service.

3. Neobanking– This segment includes digital-only financial institutions that offer convenient services, like P2P transfers, current accounts, and debit cards. As of today, Malta hosts 4 digital-only financial institutions, poised for growth with potential expansions into loans and savings offerings.
   
   
4. Investment & trading– This segment enables individuals to trade or invest in various assets, such as stocks, bonds, and mutual funds, among others. 6 Fintech companies facilitate asset trading and investments in Malta, including B2C and B2B Fintechs. Mastercard believes that simplified, user-friendly platforms and advanced technologies are crucial for their expansion.

5. RegTech– This segment includes developing of compliance tools to manage and improve regulatory adherence and leverage AI and automation. 4 Maltese RegTech companies are pioneering in compliance tools, offering a wide range of B2B services focusing on KYC, regulatory compliance and enhanced identity identification, to address global regulatory challenges effectively.

Mastercard's analysis of Malta's Fintech landscape highlights both its strengths and areas for improvement. While public support and regulatory initiatives set a strong foundation, there is still opportunity for enhanced engagement from local financial institutions, the private sector, as well as the development of domestic funding sources.

The diverse fintech segments present promising opportunities, emphasising the vitality of user-friendly platforms and advanced technologies for sector-wide growth. As Malta continues to navigate the Fintech frontier, strategic collaborations, innovation, and responsive policies will be key in nurturing the sector’s flourishing future.

Panagiotis Polydoros, Country Manager for Greece, Cyprus, and Malta at Mastercard, stated: "The results of our study aim to cultivate fertile ground for collaboration, ignite innovation, and chart the course for the sustained success of this sector. As Mastercard, we are steadfast in our belief that leveraging our global expertise will offer invaluable insights and solutions, catalysing the growth and prosperity of Malta's payments ecosystem."