By Michael Xuereb – Chief Officer, Strategy, Policy and Innovation, MFSA
The primary role of the MFSA is to safeguard the integrity of markets and maintain stability within the financial sector for the benefit and protection of consumers. As regulators we must also keep abreast of the constantly unfolding changes within the market and be proactive.
Within this rapidly changing environment, the efficiency and effectiveness of regulation must remain under constant review while the longer-term strategic objectives of the MFSA must continue to be kept in sight. The Authority’s Strategic Plan 2019-2021 identifies seven cross-sector priorities: Governance, culture and conduct; Combatting financial crime, money laundering and terrorism financing; Financial stability and sustainability; Technology and innovation; Cybersecurity and resilience; Organisational and operational capacity; and Conduct supervision. We are now well into the third and last year of this Plan and must together start the thinking process that will lead to the next. Meanwhile key projects have been completed, others are in the course of implementation, while more will come on stream as we continue to pursue our objectives.
Last month, the Authority published its Strategic Update for 2021 which provides details on progress achieved so far and the impact that major external events, not least the COVID-19 pandemic, have had on our strategic priorities, whilst remaining aligned with the Strategic Plan 2019-2021, the Authority considers it necessary to re-orient its focus towards sustainability, the creation of long-term value and continued stability. This will also set the tone for the next strategic period starting 2022. With this in mind, the Authority has regrouped its strategic priorities under three key areas that are considered to be conducive towards achieving objectives: Supervisory Transformation, Fostering a Stronger Compliance Culture, and Innovation and Growth.
Our transformation process is fundamentally changing the way we operate. At this juncture the quality and effectiveness of supervision will keep us on course to maintaining a stable and resilient financial sector while enjoying a good standing and reputation with a view to consolidating Malta’s position as a jurisdiction of choice.
The Authority’s focus on compliance will seek to further facilitate and nurture a more compliant culture and development of holistic compliance mechanisms within regulated entities. The Authority firmly believes that a compliant culture is neither a burden nor a cost but a must. A high standard of compliance will help the industry succeed in a sustainable manner, including through better quality business from higher quality investors and operators.
We must keep in mind that in terms of innovation and growth, the Authority has an important role to play. We must prepare for a future that is made up of tech-based operators operating through virtual platforms and other multiple channels. Companies who will make use of big data to develop products and personalised financial services. This is bound to have an impact on supervisory processes if not on the whole supervisory approach, and finding the right formula will serve the Authority and the country in good stead.
Looking ahead, while the 2019-2021 term has largely been dominated by the Authority’s internal transformation, the next term should be characterised by more outward looking initiatives that will build on the Authority’s evolving capabilities, strengths and its ability to challenge its own practices, and to turn policy initiatives at national and European levels to its advantage.