Malta is well positioned to embrace the Fintech startup and scaleup ecosystem! Together with Panagiotis (Panos) Polydoros and Anthony Lacavera, we entered the wider dialogue and shared our percepctives on Fintech and Malta.
The interview was covered by Globalive Media’s “Beyond Innovation” programme airing on Bloomberg TV. For the benefit of readers, since only parts of this interview is available online, i have added below the questions I was asked and how I replied, on this blog I have also amplified where I could and added links.
What programs or initiatives have you leveraged in your work together?
Moneybase is the leading Fintech firm in Malta and Mastercard is at the forefront of Fintech in Malta, therefore there has been great collaboration, Mastercard have been very supportive of our vision to make managing money simple for everyone.
We worked together to provide customers with complete digital experience. We were the first Fintech to launch Google Pay locally and worked together on the provision of other digital wallets.
Going forward we are also collaborating on various other projects including cards for business and disruptive lending services.
What are the main challenges currently facing your market and clients; and how are you addressing these? What strategic developments are you making to ensure your continued success in the region amid global market conditions?
Whilst Global market conditions remain uncertain, we remain optimistic for 2023, Moneybase has been received positively and we have a clearly defined roadmap for 2023.
In a positive interest rate environment, we will are working on collaborating with banks to offer our customers a marketplace for fixed term deposits (known as CD’s in the US) allowing customers to choose between various banks and currencies providing customers with choice but also protection via the depositor compensation scheme.
Businesses are demanding the same convenience that we currently provide to retail customers therefore we plan to extend our technology to help businesses. The demand for Embedded finance by SMEs provides a great opportunity for Fintech’s. Companies want an platform where not only can they open an account quickly, and make use of a platform that is easy to use and which allows them to manage their finances in one place. They also want to get access to credit easily, integrate with their cloud accounting system, manage their investments and more. We see a tremendous potential in this area.
What do you find most exciting about Malta’s fintech ecosystem?
The local regulator’s vision is to establish Malta as an international FinTech hub which supports and enables financial services providers to infuse technology in product and service offerings and to drive innovation. This is a bold statement which shows a clear commitment. You can download the strategy document here.
In 2023, The MFSA launched its second version of the regulatory sandbox environment that can help start-ups allowing them to test new products easily with the aim of driving innovation.
The government is working on providing incentives for Venture Capital Funds as announced in the strategy document whilst Malta has managed to attract some big players to establish themselves here including eToro and Crypto.com
Central Bank has launched MTEUROPAY which allows locally regulated Fintechs to connect to it and to process SEPA payments.
Multinational IT service providers such as Microsoft have a strong local presence providing comfort to FinTech’s demanding local support, whilst Enterprise B2B Banking service providers are also actively providing services to Fintech’s locally thus facilitating the growth of the ecosystem.
There is currently a great deal of positivity and momentum surrounding Malta with regards to Fintech right now and my feeling is that it will accelerate in 2023 regardless of global market conditions.
Do you think virtual banks will eventually overtake physical banks?
In my opinion there is no doubt that Digital Banks and Fintech’s will overtake physical banks, it’s simply a matter of time and in some ways they have already.
Fintech’s such as Moneybase have already proven that complex legacy processes can be broken down its simple ones which leave a positive experience with the customer.
Today customers have become used to managing their cards completely digitally practically without the need of a physical card. Customers have become accustomed to viewing their PIN code, control card security, and making payments or converting currencies easily all within the same app. We are swiftly moving towards a cashless society which was also accelerated by Covid.
Apart from payments, a Fintech such as Moneybase is providing customers with a full suite of investments opportunities across 40 markets including Stocks, ETFs, Bonds and Funds so I believe we are on the right path from a B2C perspective.
We are also seeing FinTech’s addressing areas like credit, opening banking, blockchain payments and pensions just to mention a few.
However Banks will always remain very important for Fintechs and collaboration is key, today the trend is for the large Banks to become more focused on providing B2B services to Fintech’s themselves which probably means they can do the same amount of business or maybe even more, but leave it in the hands of the Fintech’s to face the volumes of retail customers which they are unable to handle efficiently.
What are your plans for cryptocurrency, specifically in this region?
Malta was one of the first countries world-wide to introduce comprehensive regulation for Crypto Assets and Blockchain back in 2018. A positive and much awaited addition to this is the fact that the European Union is currently harmonising regulation across all member states by introducing MiCA.
Essentially this means that we will have a level playing field for all market participants but more importantly it means much greater consumer protection across the EU. Harmonisation and deeper regulation across the EU, will also facilitate acceptance of virtual assets which is a key enabler.
In regards to Moneybase once EU harmonisation has taken place, we are interested in offering such services to complement our current offering be it simply trading of virtual assets or maybe utilising the blockchain for cross border payments in a regulated environment is interesting.