MFSA Launches Public-Private Partnership to Combat Rising Fraud Threat

Written by Matthew Scicluna, Head of Financial Crime Compliance

Malta’s financial services sector, characterised by both its strong domestic foundation and international reach, has undergone significant transformation in recent years. This evolution has been driven by changing regulatory frameworks at both local and global levels, geopolitical developments, and the emergence of new and increasingly sophisticated criminal typologies.

A particularly concerning development has been the marked increase in fraud and scam cases targeting members of the public. These incidents have resulted in substantial financial losses, as well as significant psychological and emotional distress for victims. The growing complexity of such crimes often spanning multiple institutions and jurisdictions underscores the urgent need for coordinated and collaborative responses.

Mr. Kenneth Farrugia, MFSA’s Chief Executive Officer, Mr Matthew Scicluna and Ms Sephora Debono Head and Deputy Head of the Financial Crime Compliance Function respectively, highlight the Authority’s proactive approach in addressing this evolving threat, particularly as it is increasingly fuelled by rapid technological advancement.

“As technology continues to evolve, criminal actors are becoming more adept at exploiting it, often remaining one step ahead of financial institutions’ mitigation measures and law enforcement efforts,” Mr Scicluna stated. “Fraudsters frequently employ a combination of advanced and traditional techniques, making detection and prevention more challenging for both supervisory authorities and financial institutions.”

A Unified Response: Establishment of the Public-Private Partnership

In response to these developments, the MFSA has established a Public-Private Partnership (PPP) dedicated to fraud detection and prevention. This initiative brings together key public authorities and private sector stakeholders with the objective of strengthening coordination and enhancing collective efforts in tackling fraud.

Ms Debono explained that the initiative is being led by the MFSA with participating public authorities including the Financial Intelligence Analysis Unit (FIAU), the Malta Police Force, the Central Bank of Malta, and the Office of the Arbiter for Financial Services. In its first year of operation, the Partnership will involve private sector participation from credit institutions servicing retail clients.

“This emphasis on fraud reflects a broader global shift,” Ms Debono noted. “Entities engaged in combating financial crime are increasingly integrating fraud into their core priorities, alongside anti-money laundering and counter-terrorist financing efforts.”

Alignment with International Developments

The initiative is closely aligned with international trends and regulatory priorities. Mr Scicluna pointed to the Financial Action Task Force (FATF), which announced during its February 2026 Plenary that combating fraud will be a key focus area in the years ahead.

The creation of this Partnership also addresses the fragmented nature of existing anti-fraud initiatives undertaken independently by various authorities.

“While these initiatives are well-intentioned, the absence of a unified and coordinated strategy can limit their overall effectiveness,” Mr Scicluna explained. “The MFSA’s PPP aims to consolidate such efforts within a single forum, thereby achieving a stronger and more cohesive national impact.”

This Partnership represents an important milestone in strengthening Malta’s collective response to fraud as it brings together key public authorities and leading credit institutions around a shared objective; protecting consumers and safeguarding the integrity of Malta’s financial system.

Closing Coordination Gaps

The initiative is designed to bridge existing gaps by synchronising national anti-fraud efforts and providing a platform for the exchange of typologies, intelligence, and best practices. The partnership will also facilitate greater alignment among supervisory authorities, fostering a clearer regulatory environment with more coherent expectations and obligations for the private sector thereby strengthening its role in fraud prevention.

Enhancing Knowledge and Public Awareness

The Partnership will serve as a central hub of expertise, enabling early detection of emerging threats and coordinated responses to current risks. Insights generated through this collaboration will also support and enhance public awareness campaigns conducted by participating entities.

Furthermore, the partnership will improve collective understanding through the sharing of real-world experiences, best practices, and lessons learned by credit institutions, thereby strengthening internal controls and resilience within the banking sector. Members will also be able to exchange non-sensitive intelligence, trend analyses, and strategic insights.

Looking ahead, the MFSA envisions the gradual expansion of the Partnership to include entities from a broader range of financial sectors, as well as other private sector stakeholders. This evolution will support a more comprehensive and inclusive approach to fraud prevention and could serve as a model for future public-private collaborations addressing other challenges.

Driving Impact Through Guidance and Collaboration

Ms Debono emphasised that the collaboration will ultimately result in the issuance of both public and sector-specific guidance outlining current and emerging risks, along with strategies to mitigate them.

“Guidance is one of the most effective tools in empowering both industry players and the public to identify, prevent, and disrupt fraudulent activity at its source,” she stated.

“By strengthening collaboration and enhancing transparency, Malta is better positioned to protect its financial system and its citizens from increasingly sophisticated criminal activity,” Ms Debono concluded.

The strategic nature of this partnership reflects a deliberate approach chosen so that time sufficient time is given for the building of trust and confidence between the public and private sectors. While still in its initial phase, the Partnership represents a significant step forward in Malta’s efforts to combat fraud and demonstrates the jurisdiction’s commitment to addressing this evolving threat.

Ultimately, the initiative aims to reduce the incidence of fraud through strengthened controls and improved consumer awareness, while also increasing the successful recovery of illicit proceeds.

MFSA’s Chief Executive Officer concluded:

“This Public-Private Partnership marks a significant step forward in strengthening Malta’s unified approach to combating financial fraud. By bringing public authorities and industry stakeholders together within a structured framework, we are enhancing information sharing, enabling earlier detection of emerging risks, and fostering a more coordinated national effort to protect consumers and safeguard the integrity of our financial system"