MFSA Chairman, Jesmond Gatt: “MFSA has evolved into an agile, forward-looking regulator capable of adapting to rapid changes in the global financial landscape.”

On January 9, 2026, the Malta Financial Services Authority (MFSA) published its Strategic Update, setting out the progress towards the priorities set out in the Strategic Statement. Business News Malta sat down with MFSA Chair Jesmond Gatt to discuss the Authority’s progress, the challenges ahead, and his vision for the Malta financial services sector.

Q1. The MFSA has achieved a 73% completion rate across its 27 strategic priorities. What do you consider the most significant accomplishments, and what does this level of progress say about MFSA’s capabilities?

Jesmond Gatt: The 73% completion rate reflects the collective commitment and professionalism of our team at the MFSA. Among our most significant accomplishments, I would highlight the successful implementation of the Markets in Crypto-Assets Regulation (MiCAR) and the Digital Operational Resilience Act (DORA), which position Malta at the forefront of regulating emerging financial technologies. We've also made substantial progress in supervisory digitalisation, introduced new comprehensive rulebooks for credit institutions and company service providers, and advanced our sustainable finance initiatives.

What this progress demonstrates is that the MFSA has evolved into an agile, forward-looking regulator capable of adapting to rapid changes in the global financial landscape. We've proven that we can balance innovation with robust oversight, maintain high standards while reducing administrative burdens, and align with European requirements while addressing Malta's specific market needs. However, I want to emphasize that these achievements are not endpoints, they're foundations upon which we continue to build.

Q2: You've extended the current strategy through 2026 rather than concluding it in 2025 as originally planned. What prompted this decision, and what will the Authority focus on during this extension period?

Jesmond Gatt: The extension was a strategic decision driven by two considerations. First, whilst we've made significant progress, several complex initiatives require additional time to reach their full potential. Rather than rushing to meet deadlines, we chose to ensure quality implementation. Second, the financial services landscape has evolved considerably since we launched this strategy in 2023. New priorities have emerged, from geopolitical tensions affecting financial stability to accelerating developments in artificial intelligence and digital finance, that require our attention.

During the extension period, we'll focus on completing outstanding initiatives whilst simultaneously preparing for our next strategic cycle. This includes finalising our crisis management frameworks, further embedding outcomes-based supervision across all sectors, completing important legislative work such as the Administrative Bank Insolvency Law, and advancing our work on emerging business models like Islamic finance and aircraft leasing. Crucially, 2026 will also be dedicated to shaping the MFSA's next Strategic Statement, incorporating the lessons we've learned and positioning ourselves for the challenges ahead.

Q3: In your remarks at the launch event, you emphasized the MFSA’s "deep sense of responsibility" to consumers. How does consumer protection intersect with Malta's ambitions to remain a competitive, innovation-friendly jurisdiction?

Jesmond Gatt: This is a fundamental question that goes to the heart of our regulatory philosophy. Some perceive a tension between consumer protection and competitiveness, but I see them as complementary objectives. A jurisdiction that fails to protect consumers ultimately undermines its own reputation and competitiveness. Conversely, overly restrictive regulation that stifles legitimate innovation serves neither consumers nor the industry.

Q4: The Strategic Update highlights significant progress on digital finance and innovation. How do you balance encouraging innovation with managing the risks that new technologies inevitably bring?

Jesmond Gatt: Innovation in financial services is not optional, it's inevitable. Technologies like artificial intelligence, blockchain, and tokenization are transforming how financial services are delivered. Our role is not to resist these changes but to ensure they develop in ways that protect financial stability and consumer interests.

Our approach has several elements. First, we invest in understanding emerging technologies before they become mainstream. We participate in European Commission wide projects and engage with international bodies on best practices in digital regulation. Along with this, we conduct horizon scanning to identify opportunities and risks early.

Second, we've created frameworks that accommodate innovation whilst maintaining standards. The early implementation of regulations for digital assets demonstrates this: we enabled crypto-asset service providers (CASP) to operate under clear rules rather than in regulatory grey zones. Similarly, our position paper on tokenization of fund units provides clarity whilst enabling innovation in asset management.

Third, we recognize that new technologies bring new risks, particularly operational and cyber risks. The implementation of the Digital Operational Resilience Act (DORA) has been critical here, enhancing our oversight of ICT dependencies and digital resilience across the financial sector. We've developed cyber mapping models to understand interconnections and concentration risks. We're working with the European Systemic Risk Board on frameworks for addressing systemic cyber incidents.

Finally, we maintain proportionality. Not every innovation requires heavy regulation. Our role is to intervene where risks to stability, market integrity, or consumers are material, whilst allowing beneficial innovation to flourish.

Q5: Looking ahead to 2026 and beyond, what gives you confidence about the future of Malta's financial services sector?

Jesmond Gatt: What gives me confidence is the demonstrable resilience and quality of Malta's financial services sector. Our banking sector maintains strong capital ratios and liquidity positions. Our investment funds sector has successfully adapted to new frameworks like European Long-Term Investment Fund (ELTIF) whilst exploring innovations like limited partnership structures. Our financial institutions sector has embraced MiCAR and positioned Malta as a serious jurisdiction for digital assets. Our insurance sector maintains sound solvency positions well above regulatory thresholds.

I'm also confident in the MFSA's institutional capacity. The professionals working within the Authority have demonstrated their expertise and dedication. The systems and frameworks we've built, from risk models to digital infrastructure, provide solid foundations. And our relationships with stakeholders, both domestic and international, create networks of collaboration that strengthen our collective resilience.

Ultimately, the financial services sector's contribution to Malta's economy, representing nearly 9% of Gross Value Added (GVA) and employing over 16,000 people, reflects its fundamental importance. With effective regulation, continued innovation, and collaborative engagement between the Authority, industry, and government, I'm confident that Malta's financial services sector will continue to thrive whilst maintaining the highest standards of integrity and consumer protection.