The Fintech sector in Malta has exhibited remarkable growth in recent years, thus presenting a compelling area for exploration. In a recent study presented at the 16th FinanceMalta Annual Conference, Mastercard examined a variety of strategies with which the public sector can further nurture Fintechs in a holistic way for sustained success. Mastercard explored international methods of support and best practices from successful European Fintech hubs such as the UK, France, Germany, the Netherlands, and Ireland, as well as emerging players in Lithuania and Estonia, identifying four key areas of support.
Access to Capital and Expertise
The first area of support identified, focuses on securing funding and guidance for Fintechs through both public and private sources.
Grants and funding programs, which do not require equity in return, empower startups to innovate and grow. Such grants play a crucial role, particularly for early-stage start-ups that receive funding without losing equity as they allow them to foster innovation, entrepreneurship, and economic growth, and support them to overcome early-stage challenges and accelerate their development.
Another way to increase the Fintech sector's access to capital and expertise is via public-private partnerships in the form of startup incubators and accelerators, which play a crucial role in skill development and talent attraction. These are essentially partnerships between governments and private organisations that nurture and support early-stage Fintech startups. Such programmes offer mentoring, funding, office spaces, and resources, as well as networking opportunities, while also attracting domestic and international talent to the sector.
Another impactful action the public sector can drive is the creation of information and collaboration platforms that support Fintechs with the resources, connections, and diverse support they might need. This can be done through networking opportunities, facilitating market access and partnerships with established institutions, as well as regulatory support and knowledge sharing.
Regulatory Environment & Infrastructure
The second area of support identified focuses on ways that ensure a conducive regulatory and technological environment for Fintechs to scale and thrive.
Regulatory Sandboxes provide a controlled space for Fintechs to innovate under guidance, fostering collaboration and ensuring consumer protection.
It is important to understand that regulation is key when it comes to the development of Fintechs and innovative startups in general. Therefore, progressive regulatory frameworks are crucial to attract Fintechs. Best practices of regulation are streamlined licensing, tailored regulations, regulatory guidance, as well as regulatory flexibility.
Furthermore, a robust digital infrastructure that supports digital transformation, economic growth, and innovation while shaping the country's ability to participate in global digital interactions and innovations, are all prime factors in the success of the Fintech ecosystem. The key features of such infrastructure include strong broadband and internet connectivity, cloud computing infrastructure, cybersecurity frameworks, digital payment infrastructures, e-government platforms, and digital identity solutions.
Talent Attraction & Development
The third area of focus highlights methods that enable Fintechs to access top-tier and diverse talent and provide avenues for continuous learning and expertise development.
The attraction of foreign talent is vital since it brings along fresh perspectives, specialised skills and global connections that help accelerate development. To facilitate this process, the public sector can investigate initiating startup visas and entrepreneurial programmes, collaborate with universities to offer post-study work incentives, run global talent attraction campaigns that showcase the opportunities within the country and provide relocation support services that keep in perspective housing, healthcare, banking, and cultural integration.
While the attraction of foreign talent is important, fostering local talent is just as crucial. This can be done by nurturing and initiating partnerships between Fintech companies and educational institutions and offering internship programmes aimed at growing skills and expertise. Additionally, the public sector could also incentivise the organisation of boot camps and skills development programmes that provide platforms for ideas to flourish and skills to be put to the test and grow.
International Collaborations & Promotion
The final area of focus is the promotion of the Fintech industry through global partnerships, hosting or participating in international events, and overall engagement in promotional activities to showcase and attract Fintechs, talent, and investment to the local Fintech ecosystem. Such opportunities allow experts to come together to discuss and explore ways to propel the sector, especially by looking into case studies in different countries as a base.
Mastercard's study highlights that the public sector's strategic support is vital for Fintech sector growth, as is the collaboration with the private sector. By providing support, incentivising private investment, creating Fintech-friendly regulations, fostering talent through incubators and accelerators, and facilitating international collaborations, governments can create an even more robust ecosystem where Fintechs thrive. As nations like Malta tap into these strategies, they pave the way for a flourishing Fintech industry, driving innovation, economic growth, and global recognition, ensuring that promising startups not only survive but also thrive in the competitive digital landscape.