Mastercard explores the Fintech landscape of Malta

In the ever-evolving landscape of global finance, Fintech companies are consistently emerging as dynamic catalysts, spearheading revolutionary changes through their innovative and transformative initiatives. Mastercard, a global technology company in the payments industry, has been actively exploring the future of Fintech in Malta and this was exemplified by the recent completion of their extensive study. The study was unveiled for the first time during the 16th Annual Conference organised by FinanceMalta, with the primary objective of shedding light on the intricacies of Malta's thriving Fintech sector and offering strategic recommendations to further foster its growth.

Under the guidance of the “2023 Strategy for Financial Services” released by the Malta Financial Services Authority Council (MFSAC), Mastercard commenced a thorough study, meticulously charting the Fintech ecosystem in Malta. The study identified key segments, players and trends within the expanding Fintech landscape, also looking at the European and global trends, leading to a series of recommendations that aim to support the growth and prosperity of Malta’s Fintech sector.

The Fintech landscape in Malta

A pivotal aspect of the study involved an extensive examination of the Fintech sector, revealing the dynamic and rapidly evolving narrative of Malta's Fintech landscape. In the course of sector analysis, five primary segments were identified: Government, Private Funding, Financial Institutions, Regulators and other enablers. This analytical approach allowed Mastercard to gain an understanding of how different stakeholders contribute to the growth and advancement of the sector. Beyond this supporting ecosystem, Mastercard also pinpointed critical segments within Fintech that are actively shaping Malta's financial landscape. These segments encompass Blockchain and Cryptocurrency, Payments, Neobanking, Investment and Trading and Regulatory Technology (RegTech).

International trends & practices

The next chapter of the study focused on the exploration of the global Fintech trends and developments affecting the financial services industry, as well as the methods the public sector can employ to further support Fintech companies. According to the study’s insights, Digitalisation, Cutting-edge Technology and Customer Centric Thinking are the core forces that will continue to shape the trends and developments in the coming years, as we expect a further shift towards online and mobile banking and the adoption of new customer centric technologies.

Advancements in technology have empowered financial institutions to develop more sophisticated solutions, underpinned by modern technology in what is being referred to as a race to become a super-app for clients. 

Another key component driving the promotion of Financial Institutions is their association with Sustainability. Considering that 67% of consumers give weight to ESG initiatives when choosing financial providers, it is evident that sustainability has taken on a prominent role in influencing how companies are perceived by their customers. 

Open Banking is transforming interactions with financial institutions, while Banking-as-a-Service reduces costs and improves the customer experience. Embedded Finance improves access to financial services and fosters better relationships, while Buy Now Pay Later enjoys widespread popularity globally as it offers consumers the flexibility to acquire products and choose to either delay payments or make them in instalments with minimal or no associated charges. In the new era of financial inclusion, Blockchain and Cryptocurrency solutions are also applicable across all issuers’ and acquirers' offerings, representing a new way for financial institutions to interact with customers and partners. Finally, the adoption of Real-Time Payments is surging, driven by the growing demand from both consumers and businesses for instantaneous transaction outcomes.

Additionally, the research delved deeply into the ways Malta's public sector supports Fintechs and the broader ecosystem in which they operate. It identified key pillars of support, with a particular focus on Access to Capital & Expertise, the Regulatory Environment & Infrastructure, Talent Attraction & Development, as well as Collaborations & Promotion. These fundamental pillars collectively serve as the bedrock upon which the thriving Fintech sector can further flourish. In addition to the public sector, the study also shed light on various other entities, both at a European and global scale, that contribute to supporting Fintech companies. These entities include non-governmental organisations (NGOs), private enterprises and European agencies, each offering their unique forms of support.

Recommendations

After investigating the local ecosystem and analysing global trends and practices, Mastercard formulated a series of recommendations that could contribute to the growth of Malta's Fintech sector. These recommendations were built upon the identified areas of improvement outlined by MFSAC and covered a spectrum of initiatives, including governance enhancement, garnering support from both the public and private sectors, implementing measures to attract foreign investments and devising strategies to secure additional funding.

Mastercard's research endeavours, combined with its customised solutions for Fintech businesses, stand as a testament to the sector’s promising growth prospects and the company's steadfast dedication to actively shaping the future of finance within the country.