MFSA outlines expectations on financial crime risk mitigation in industry workshop

Financial services stakeholders discuss better ways of protecting themselves from being used as vehicles for financial crime

MFSA Chief Officer Supervision, Marianne Scicluna addressing the industry workshop
MFSA Chief Officer Supervision, Marianne Scicluna addressing the industry workshop

With the turn of the year, the Malta Financial Services Authority (MFSA) has renewed its commitment to create opportunities through which it can strengthen its engagement with stakeholders in the financial services industry. 

Placing this at the top of its agenda, the Authority today organised an industry workshop, intended to assist entities as they endeavour to protect themselves from being used as vehicles for financial crime. The session, which was attended by over 300 industry stakeholders, was organised in collaboration with FTI Consulting, and led by Senior Managing Directors Federica Taccogna and Nigel Webb, as well as Managing Director Thea Utoft.

MFSA Chief Officer Supervision, Marianne Scicluna reiterated the MFSA’s strategy of embedding financial crime compliance into all of the Authority’s Supervisory activities, in its continuous efforts to adopt a more holistic approach towards supervision.

She highlighted the MFSA’s ongoing coordination and cooperation with the Financial Intelligence Analysis Unit (FIAU), for which the Authority acts as an agent.

"While the MFSA is first and foremost a regulator, it must also fulfil the role of industry partner in order to minimise the opportunities for criminals to use Malta as a vehicle for illicit activity," she said.

An overview of the Anti-Money Laundering (‘AML’) and Counter Terrorist Financing (‘CTF’) principles and the overarching regulatory framework referencing the EU third, fourth and fifth money laundering directives were shared by the speakers during the event. This was complemented by an explanation of the varying methods used by criminals in relation to their objectives, along with the responsibilities of officials in the event of suspicion being raised.

During the workshop, FTI Consulting’s Senior Managing Director, Federica Taccogna also touched upon the emerging risks associated with both changing legislation and Malta’s economic development strategy such as the challenges which the FinTech revolution will bring about. She outlined the MFSA’s pivotal role in developing a complete framework which caters for all key areas of risk, and its continued efforts to guide regulated firms to become compliant.

Concluding with a discussion on the role of the Money Laundering Reporting Officer (MLRO) and the areas in which shortcomings are often detected within AML frameworks, Taccogna reiterated the need for a strong compliance culture and the importance of having a clear “tone from the top”.

"While it is crucial for regulated firms to continue to invest in measures which prevent criminals’ abuse, regulators also need to strive to provide the necessary training through such workshops and seminars, for industry players to actively detect malicious activity,” she said.

The training on Financial Crime Risk Mitigation was provided for Money Laundering Reporting Officers, Compliance and Risk managers and Senior executives through two separate workshop sessions. The first session targeted Company Service Providers, Trustees and Fiduciaries, whilst the second was tailored for Credit and Financial Institutions.

More in Banking & Finance