Last week I had the pleasure of launching the MFSA’s Vision 2021 and FinTech Strategy. This is an important milestone of significant change for the Authority and the entire industry because it brings in its wake important changes in our approach to regulation and the role which the MFSA will play from this point onwards.
In the 20 years that the MFSA has been regulating the financial services sector, its role has grown exponentially to become the single financial services regulator. After such a long period, it is time to evolve, modernise and look ahead with a sense of achievement but, at the same time, it is equally important to learn from our experiences so that we take on board lessons learnt. The change we are embarking on will bring the MFSA closer to European standards of supervision but also provide a more meaningful regulatory system which is evidence based, proportionate and efficient.
What does this change mean?
People: We shall be investing further in the development of our human capital. This is key to ensure that the MFSA is “right sized” in order to supervise more effectively a growing and evolving sector – making sure that we are equipped with the skills and competences necessary to navigate through growing complexity and increased regulation. Our HR strategy is focused on recruiting the best talent, but most importantly in retaining and developing that talent.
Technology: Investment in the latest supervisory technology, business intelligence and knowledge management tools will become a mission critical to the success of the MFSA and Malta as a jurisdiction. This is key to unlock our potential and improve our efficacy as a European financial services supervisor. We cannot talk about FinTech hubs, FinTech strategies, Malta as a centre of excellence and Blockchain but at the same time shy away from making the necessary investment. Our new technology strategy will make the MFSA a European role model in the application of the latest technologies. This will undoubtedly strengthen our ecosystem which will further support our critical function.
Organisational Changes: The MFSA will shortly unveil its new organisational structure and a number of key organisational changes. These changes are designed to strengthen our governance structure but also streamline our organisational structure with clearer lines of responsibility and accountability, eliminating unnecessary bureaucracy where possible, but also adding new critical functions such as research and innovation, a dedicated FinTech team, risk management, strengthening of financial crime compliance and business intelligence.
Stakeholder engagement: We are planning to engage more with our peers at European level on many fronts to contribute in sectoral reforms and policy development. We shall also be engaging further with other international bodies and supervisory entities to ensure we deploy our best people when shaping the international regulatory agenda.
FinTech in focus: Across the spectrum of Fintech companies, from innovative start-ups to established global financial institutions seeking competitive advantage via increasing adoption and deployment of technology, the focus on investment in financial services technology has never been greater. Global corporations are adopting multiple strategies to deliver on these challenges and opportunities, such as incubate, invest and collaborate. Our aim is to provide a tailored approach to authorisation for innovative firms. Such a tailored approach may include the provision of pre-application support to firms, or authorising them with restrictions, in order for such firms to test their business models and products in a controlled environment. Our strategy aims to build on our success to date by working with new and existing companies to capture additional financial technology investment and help drive increased investment, entrepreneurship and employment across the industry. Similar to other major financial services regulators, the MFSA is currently assessing viable solutions to nurture innovation and facilitate the industry’s access to FinTech.
For the financial services industry, the next chapter offers exciting challenges and opportunities where technology will play a major role. We are very happy to be at the forefront of these exciting times. My energies and that of my team shall remain focused on ensuring that the MFSA raises the bar in its supervisory standards to ensure a sustainable future for this industry.
This transformational journey is not only about rebranding, vision statements and strategic announcements – this is a real commitment to race to the top and reposition ourselves as a top tier European financial regulator.
I would like to take this opportunity to thank all my colleagues for their efforts and hard work but also their determination and commitment to positive change.
Dr Joseph Cuschieri is the Chief Executive Officer of the Malta Financial Services Authority