Opening Speech By Ms Juanita Bencini For The IFSP Annual Conference 2018
Hon Minister Scicluna, Hon Parliamentary Secretary Schembri, distinguished guests and fellow practitioners.
Good morning and thank you for joining us for this IFSP conference which this year has been aptly named Efficiency and Innovation – the way forward for Malta’s financial services industry. A lot of thought has gone into this title because we, the Council of the IFSP believe that the financial services sector is at a crossroads. Most of us desire to be able to look back in say 10 years time and see an industry that has grown from strength to strength from where we are today, but in order to be able to do that we believe that this is the opportune moment to take a long hard look at the sector and decide where we want to go and how to get there.
First of all let’s focus on the word “Efficiency”. Over the years the practitioners – of which there are many in this room – will attest to the decline in efficiency that we have seen from the regulatory bodies and government agencies that support our industry and which underpin all our marketing efforts to attract international business to our shores. We all have our personal war stories of dealing with these bodies and we draw comfort from sharing such stories with each other because at least we feel we are not alone and being singled out. Tax refunds are horrendously late, Supervisory Council takes forever to issue a decision, it is difficult to find someone at their desk, first go – this is the bane of our daily life. If we seriously want this sector to grow, then the support structures must be able to do just that – “support” in a timely and effective manner, providing the impetus and the platform for practitioners to go out there and get more business. Today we find ourselves in situations where we are constantly defending these support structures and coming up with all sort of excuses to appease our clients and hopefully persuade them not to jump ship and lose them to another jurisdiction. These structures have become lack lustre and very bureaucratic and the spark and thirst to be there alongside the practitioners to help them win business needs to be re-ignited.
Secondly “innovation”. Most people in this room are convinced that innovation through the embracing of fintech is the way to go and that leading the way in embracing technology may create the next pillar of growth for Malta’s economy. We have heard about a lot of initiatives being promoted by government, in this space, over these last few months, but questions still prevail and some consider the uncertainty to be stopping us from moving ahead. How will our laws be changed to embrace blockchain? When are we going to have regulatory sandboxes? How are we going to embrace regtech? Will it be the same regulator who will licence fintech companies or do we need a different mindset to be able to deal with fintech? These and many other questions need to be tackled fast and the momentum needs to gather. We have already lost first mover advantage in this space but hopefully it’s not too late to play catch-up.
BUT innovation should not only be in the fintech space! If we look at the past, we can cite several examples of instances where Malta was clever and innovative in adopting EU regulation. Think here of the PCC and the PIF regime. Therefore my fear is that in the hype that is currently surrounding fintech, we may forget that we also have to be innovative in how we transpose directives into Maltese law and take time out to study directives and regulation to come up with products that are attractive within the context of EU legislation. What I call “mainstream” or non-fintech space, is here to stay and therefore we should not give that up and concentrate all our efforts and energies on the fintech arena only. Innovation is also a key word when devising our tax laws of the future to make them more suitable to the current global environment that seems to be the direction of travel for the years to come.
The title of the conference also talks about “the way forward for Malta’s financial services industry”. The series of events over the past two years, some of which have impacted the industry directly, have generated a lot of uncertainty amongst practitioners about the way forward for the financial services industry. We feel that we are living life in suspended animation. Speculation abounds about changes that will happen at the regulator and the ever increasing burden of European regulation, which even in the face of an America that is looking to soften regulation, continues unabated. At the same time to add to our uncertainty ( and fury I must say) some of our own compatriots have resorted to full page articles in the press asking whether Malta is a tax haven and trying to convince the readers that in fact, it is. Whilst it is healthy for practitioners to constructively criticise with the aim of creating a better final product, yet this type of self-harm, which is akin to what frustrated and sick adolescents resort to, is extremely short-sighted and dangerous.
Therefore the timing of this conference is spot on. Whilst the industry is registering growth and there is still keen business interest in the sector especially from foreign players, yet there is a lot that needs to be done. So let this be the bugle call – a call for action to truly find the way forward for Malta’s financial services industry which will necessitate crafting a national strategic plan for the industry – one that will make sure we can look back in 10 years time with satisfaction, at an industry that remains an important part of the Maltese economy.