FinTech Strategy

Supporting the financial services industry
to harness opportunities presented by
technological innovation

The MFSA FinTech Strategy aims to establish Malta as an international FinTech hub which supports and enables financial services providers to infuse technology in product and service offerings to drive innovation.

Overview of
the MFSA FinTech Startegy

Six Strategic Pillars
underpinning the MFSA FinTech Strategy

Time-line overview of
initiatives under the MFSA FinTech Strategy

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MFSA FinTech
Strategy Overview

The MFSA aims to establish the foundations to enable FinTech start-ups and  scale-ups, technology firms and established financial services providers to develop viable FinTech solutions which drive innovation and enhance access to financial products, increase competition whilst promoting market integrity, deliver better customer experiences, and ultimately, contribute to the long- term success of the Maltese financial services sector.

The MFSA will strive to:
1

Lead

..by taking on a steering role in the development of this emerging sector through actions and initiatives to drive innovation
2

Facilitate

..by becoming an enabler of innovation through (i) the establishment of a FinTech Regulatory Sandbox to promote innovation and experimentation, and (ii) supporting the development of a FinTech Innovation Hub to further stimulate collaboration and innovation.
3

Collaborate

..by working hand-in-hand with various stakeholders, international regulators and market participants to develop the FinTech sector while building trust and dialogue amongst parties.
4

Embrace

..innovation by adopting RegTech and SupTech solutions and by developing the capacity to understand and be proactive towards addressing the regulatory challenges brought about by such innovations.
5

Educate

..consumers and the industry as a whole on the benefits and risks of FinTech and any related technologies.
6

Strengthen

..confidence in the market and its institutions, thereby fostering a robust and dynamic FinTech sector in Malta.

The MFSA FinTech Strategy had been published for industry consultation through a Consultation Document. The feedback received and the MFSA’s response and position thereto are summarised in this Feedback Statement.

Overview of
the six strategy pillars

The MFSA FinTech Strategy proposes to set out six pillars for the MFSA to create a holistic long-term approach to catalyse innovation, growth and competition in the financial services sector, whilst ensuring robust investor protection, market integrity and financial soundness.

Regulations

Adopt regulatory and supervisory initiatives to support innovation and improve
regulatory efficiency

On 4 July 2019, the MFSA published a Consultation Document proposing to (i) launch a FinTech Regulatory Sandbox, (ii) set up a framework for the regulatory certification of RegTech solutions, while also encouraging persons developing SupTech solutions to approach the Authority through a dedicated online form, and (iii) provide a status update on the other strategic objectives presented under Pillar 1 of the FinTech Strategy. The deadline for stakeholders to provide feedback was 30 August 2019. During the consultation period the MFSA also held a Workshop in collaboration with FinanceMalta to provide interested parties with an additional platform to interact with the MFSA and put forward their views on the proposals under this Pillar.

Following the responses received from stakeholders through these initiatives, the MFSA issued Pillar 1 – Regulations Feedback Statement summarising the feedback received and setting out the MFSA’s position.

Today, FinTech operators can apply to test their innovations within the MFSA’s FinTech Regulatory Sandbox. The MFSA’s Rule 3 establishing the Sandbox, together with respective guidelines and FAQs and a dedicated proposal form, are also available online. Further developments and updates will be published on the dedicated page, whilst any queries are to be addressed to [email protected].

Ecosystem

Foster community, demand and collaboration and enhance access to finance.

The development of this pillar involves various deliverables aimed at creating a holistic all-encompassing ecosystem which has the necessary building blocks to foster financial innovation from both start-ups and industry incumbents. The strategic objectives under the Ecosystem Pillar are:

  1. Malta FinTech Innovation Hub
  2. National Cooperation
  3. Access to Finance and Resources
  4. Collaboration between FinTechs and Sector Incumbents
  5. Market Education, Inclusion and Adoption

Architecture

Encourage collaboration through the adoption of Open APIs and shared platforms.

The MFSA intends to promote the implementation of open architecture and the use of APIs in financial services to bring about a great degree of functionality and versatility.

Additionally, the MFSA intends to carry out a scoping and consultation exercise to determine the need and interest in shared platforms. Should the scoping exercise show that shared platforms would be beneficial for the industry as a whole, the MFSA is proposing to initiate discussions with its partners and interested parties to develop and implement the proposed solutions.

Knowledge

Cultivate deep talent pools and stimulate research and collaborative ideation.

The MFSA wishes to cultivate the country’s talent pool by means of specific policies and programmes focusing on increasing Malta’s capacity through national and international initiatives. One of these initiatives is the establishment of an Academy offering specialised training to financial supervisors.

The MFSA is also further suggesting the implementation of programmes to encourage R&D in innovation, in collaboration with government, other authorities and agencies and the private sector.

Security

Establish an environment that is resilient to cybersecurity threats.

In order to mitigate the possibilities of unintended consequences and threats emerging from the nature of the technologies employed, it is paramount that FinTechs and industry incumbents implement robust and comprehensive cyber security risk-management systems including risk-mitigation techniques and recovery plans in case of cyber incidents.

Timeline of Events

  1. FinTech Strategy | Consultation

    - January 31st, 2019

    While supporting the financial services industry to harness the opportunities presented by technological innovation, the MFSA is seeking to provide legal and regulatory certainty to industry players and ensure effective investor protection, market integrity and financial soundness in the FinTech environment, by embarking on a longer-term strategy.

    The Authority thus proposed the MFSA FinTech Strategy which presents a wider, cross-sectorial approach underpinned by six strategic pillars. The key foundational elements of the Strategy will be the introduction of a ‘FinTech Regulatory Sandbox’ and a FinTech Innovation Hub. The Consultation Document presented the MFSA’s vision and strategy towards developing Malta into a global FinTech hub.

  2. FinTech Strategy | Feedback Statement

    - May 15th, 2019

    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.

  3. Pillar 1 – Regulations | Consultation

    - July 4th, 2019

    Through the first Pillar of the FinTech Strategy, Regulations, the MFSA envisages to “adopt regulatory and supervisory initiatives to support innovation and improve regulatory efficiency.”

    The Authority has published a Consultation Document proposing (i) the MFSA Regulatory Sandbox, which will encourage FinTech innovation through its stated objectives and (ii) to set up a framework for the regulatory certification of RegTech solutions, while also encouraging persons developing SupTech solutions to approach the Authority through a dedicated online form. Additionally, a status update of the other strategic objectives presented under Pillar 1 of the FinTech Strategy was also provided.

    Industry participants and interested parties were invited to send their responses through an online survey, developed specifically for this purpose, by not later than 30 August 2019.

  4. Pillar 1 – Regulations | Consultation Event

    - July 30th, 2019

    Finance Malta, in collaboration with the MFSA, organised a briefing and consultation event with regards to the Consultation Document on Pillar 1 of the FinTech Strategy. The objectives of the event were to:

    - Provide an in depth overview of the Consultation Document and the proposals under this Pillar; and

    - Engage with the audience through an interactive workshop for feedback.

    Prospective Sandbox participants, collaborators and stakeholders from finance, law and tech were all invited to attend this workshop and communicate their views.

    Further details on this event may be found through the following link.

  5. Pillar 1 – Regulations | Feedback Statement

    - January 27th, 2020

    Following the responses received after a comprehensive consultation with stakeholders on Pillar 1 – Regulations Consultation Document, the MFSA issued Pillar 1 – Regulations Feedback Statement summarising the feedback received and setting out the MFSA’s position.

    The Authority has also published, annexed to the Feedback Statement, the proposed Rule establishing the MFSA FinTech Regulatory Sandbox. Industry participants and interested parties were invited to provide their feedback with respect to the Rule, by not later than 14 February 2020, on [email protected].

  6. Pillar 1 – Regulations | MFSA’s FinTech Regulatory Sandbox

    - July 22nd, 2020

    As of 22 July, FinTech operators can apply to test their innovations within the MFSA's FinTech Regulatory Sandbox, for a specified period of time and under certain prescribed conditions. The regulatory environment created aims to foster sustainable financial innovation, ensure regulatory certainty and promote knowledge sharing, whilst ensuring effective investor protection, market integrity and financial soundness in the FinTech environment.

    The MFSA’s Rule 3 establishing the Sandbox, together with respective guidelines and FAQs and a dedicated proposal form, are also available online. Further developments and updates will be published on the dedicated page, whilst any queries are to be addressed to [email protected].

Read our FinTech Strategy related...

Publications

MFSA FinTech Strategy

MFSA FinTech Strategy

 

This FinTech Strategy presents a wider, cross-sectorial approach underpinned by six strategic pillars identified therein..

 

 

 

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MFSA FinTech Strategy | Feedback Statement

MFSA FinTech Strategy | Feedback Statement

 

Following the public consultation on the MFSA FinTech Strategy, this document surmises the responses received hitherto and puts forward the Authority’s position.

 

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Pillar 1 Regulations | Consultation Document

Pillar 1 Regulations | Consultation Document

 

The Authority has published a Consultation Document proposing (i) the MFSA Regulatory Sandbox. which will encourage FinTech innovation through its stated objectives…

 

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Pillar 1 Regulations | Feedback Statement

Pillar 1 Regulations | Feedback Statement

 

Document outlining summary feedback to the Pillar 1 – Regulations Consultation Document and setting out the MFSA’s position.

 

 

 

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