Following developments over the past few years, Malta’s financial services industry is suffering fatigue, President of the Institute for Financial Service Practitioners (IFSP) Tonio Zarb said during a conference on Thursday.
His comments were made during a panel discussion at FinanceMalta’s 15th Annual Conference, the first in-person annual conference to be held since the pandemic. Mr Zarb formed part of a panel discussion on the challenges and opportunities faced by the financial services industry in the months and years to come.
Mr Zarb spoke following a presentation made by Chairperson of the Malta Financial Services Advisory Council, Joseph Zammit Tabona, on a new vision for the financial services industry.
Last year, Finance Minister Clyde Caruana told BusinessNow.mt that the Council, who he referred to as “the wise men of the industry” would set a new strategy for the sector.
Without Mr Zarb going into the “developments” that took place in Malta and in the financial services industry specifically over the past years, it is not difficult to understand why the sector is fatigued. From the Panama Papers scandal in 2016, and the political turmoil that ensued, several major stories linking Government to big business and Malta’s entry (and subsequent exit) into the FATF grey list, the local financial services sector has been fighting to prove its credentials and bolster its reputation.
Speaking during the panel discussion, Mr Zarb said that the adoption of a new strategy for the financial services sector by Government “would set the tone”.
“There is a certain tiredness and lack of enthusiasm for the industry. It is important for us to get out of this mode to a much more positive frame of mind. The Malta Financial Services Advisory Council strategy will help in this regard.
“The fact that this strategy will be accepted and driven by Government is highly welcome. We need a positive message from Government that they are behind the sector.”
Taking a wider view, Mr Zarb went on to highlight that the cost of doing business in Malta “has increased tremendously”, making the country, and the sector, “less competitive”. He qualified that it is not a reduction in regulation that is being sought to counter these effects, but rather that regulatory processes are undertaken in a more efficient way.
“There should be a cost-benefit analysis before implementing new measures,” he added.
Turning to Malta’s judicial system, which was touched upon in the MFSAC strategy, he said the financial services sector is not being served adequately, pointing to the speed at which proceedings press on, as well as the quality of proceedings in some cases.
Lastly, he emphasised that “culture eats strategy for breakfast: if the culture is not there to back up strategy, it is not going to work. In this case, what is the necessary culture? Ultimately, we cannot operate without a frame of mind where we embrace regulation and compliance.”