MFSA to Prioritize the Fintech Industry

September 30, 2019 | 2 minute read

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Through a strategic document covering the period from 2019 to 2021, the Malta Financial Services Authority (MFSA) has recently issued a three-year plan.

With the establishment of Malta’s position as a blockchain and crypto hub, the MFSA plans to host related projects and be open to the adoption of innovative technologies.

Fighting Financial Crime

One of the priorities outlined in the publication focuses on the fight against financial crime. The regulator has reiterated that this encapsulates combating money laundering and the financing of terrorism as well as related activities. To support this, the MFSA stated in its report, that it would be actively monitoring and managing business-related risks. These relate to licensed virtual assets and cryptocurrency businesses.

The report went on to affirm that, while the nation remains to be a blockchain and cryptocurrency-friendly jurisdiction, the challenges are not to be overlooked. The innovations in question pose continual challenges in the prevention of money laundering and terrorism funding.

The MFSA will be striving to modernise our regulatory approach to be prepared and be a step ahead of industry developments. MFSA will continue to work closely with the FIAU and other national and international authorities, including the newly set-up Malta Digital Innovation Authority (MDIA).

Using RegTech and SupTech

To adequately supervise the financial industry in Malta, the regulator is going to rely increasingly on technology. It also expects that firms within the sector will themselves, take a technology-driven approach to regulatory compliance.

The report further emphasises its hope that more companies within the blockchain and crypto trading sphere implement RegTech; a technology that involves artificial intelligence and automation. The MFSA is confident that this resource will be widely utilised in the near future. 

The institution explained that it intends to employ  RegTech to monitor and manage business risks that are expected when dealing with digital assets and crypto platforms. In the future, the resources will also extend to include SupTech intelligence.

The main objective of the MFSA’s strategic plan is to improve the regulator’s capacity to detect fraudulent activity, prevent money laundering and the financing of terrorism to safeguard clients, investors and shareholders. 

Therefore, by using such intelligence tools, the MFSA will have the necessary resources to automate the regulatory processes and examine the risk management of the digital assets industry that is licensed in Malta.




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