As we come to the end of 2020, NewsHub looks back on the figures published in the Dashboard this year.
In the first ten months of 2020, the MFSA had conducted 51 enforcement actions, which is more than the number of enforcements carried out in 2018 (a total of 19) and 2019 (a total of 14) put together.
Commenting about this, Edward Grech, Head of Enforcement states that a big part of this success was the increased investment in human resources. “The MFSA has devised a clear strategy seeking to develop and improve all aspects of the financial regulator’s work, including the Enforcement process. In line with the recommendations made by international organisations, the Authority has invested heavily in its human resources throughout all areas within the organisation.”
Calvin Cassar, Head of People & Culture at the MFSA concurs, stating that, “Over the years the Maltese financial services industry has grown not only in size but also in complexity. In addition to this, there has been a significant increase in the degree of intricacy of supervisory requirements often ensuing from work carried out by the European Supervisory Authorities, within which the MFSA is an active contributor.” He adds that in order to address these growing needs, the MFSA embarked on a pathway to not only upgrade its technology and data handling capacity but also to grow its core supervisory teams. In fact, since 2018, the supervisory teams saw an increase of 40% in human resources, with 89 new staff members joining the Authority.
Edward Grech also spoke of the thorough process which the Authority engaged to enhance its procedures in order to achieve greater efficiency and effectiveness in the Enforcement process, in turn resulting in more timely enforcement action. He stated that these results are even more impactful when one considers the challenges presented during 2020 due to the restrictions imposed in relation to the spread of the COVID-19 pandemic. These challenges were addressed through the enhancement of the Authority’s IT infrastructure which allowed the MFSA’s work to continue without interruptions throughout this period.
COVID-19 also presented some challenges, mostly technological in carrying out inspections and examinations. However, Emily Benson, MFSA’s Head of Conduct Supervision, acknowledges that the move to remote onsite inspection was swift and seamless, proving very effective and resulting in higher completion rates. In fact, there was an increase in onsite inspections, which, up to October 2020 amounted to 389, surpassing the projected yearly amount of 350, and showing a marked increase when compared to 2019, when a total of 230 inspections and examinations were carried out.
Looking ahead at the coming year, Emily Benson stresses the importance of fully and effectively deploying the risk-based supervision model. “The most important target for us is that high-risk firms are subject to sufficiently frequent and intrusive supervision and that our supervision is agile and able to quickly and appropriately respond to emerging risks.”
In terms of human resources, Calvin Cassar states that “The MFSA is close to completing its rightsizing programme. As a next key priority, it is now looking at right skilling its workforce, through the provision of mechanisms aimed at developing the skills, knowledge, competencies and attitudes of its employees.” He refers to the Authority’s recently launched Financial Supervisory Academy which will contribute to this dimension through the provision of specialist and technical training. Having already seen a 50% increase in training between 2017 and 2020, this commitment of the Authority can only be a sign of better times ahead.