The Boardroom Brief | FIAU’s Elena Tabone on Enforcement, AI, and the Future of AML in Malta

In our first edition of The Boardroom Brief, we hear from Elena Tabone, who heads the Enforcement Section at Malta’s Financial Intelligence Analysis Unit (FIAU) - the central agency responsible for the collection, collation, processing, analysis and dissemination of information to combat money laundering and the funding of terrorism.  Joining as a Compliance Officer in 2015, Elena has shaped what the FIAU has become today, including leading the rollout of CASPAR, the platform the FIAU uses to assess and monitor the businesses it supervises.

Q1 What will the ability to settle enforcement cases mean in practice for businesses?

The FIAU's ability to enter into settlement agreements means that obliged entities may resolve regulatory breaches through an agreement with the Authority, rather than going through a full and formal enforcement process. In practice, this has several implications.

Settlement allows for faster resolution of enforcement matters and helps reduce disruption to daily operations by shortening the enforcement process. In addition, settling a case is typically less costly than pursuing an appeal, as it helps avoid the extensive legal and administrative expenses associated with prolonged litigation.

Settlements encourage obliged entities to cooperate with the FIAU at an early stage, facilitating a more constructive and efficient resolution of enforcement matters. Our approach will place greater emphasis on remediation and the strengthening of internal controls rather than solely on the administrative penalty. As a result, it contributes to improving compliance frameworks and fostering a stronger overall AML culture within obliged entities.

Q2 Why does business input matter in AMLA’s sanctions/penalties consultation, and what does AMLA’s arrival mean for enforcement?

Obliged Entities’ input is important in consultations because it helps ensure that the standards developed by AMLA are practical and effective within real-world contexts. Obliged Entities are best placed to provide insight into how compliance measures operate in practice and the challenges faced when implementing AML/CFT controls. This feedback allows AMLA and regulators at large to design standards that maintain a strong control culture, deter criminals from utilising the EU financial system, while remaining workable and yielding effective results. It also helps identify unintended consequences, which may not have been captured by regulators. Overall, the regulatory technical standards (RTS) on sanctions support greater clarity and consistency in how penalties may be applied across the European Union.

AMLA’s entry into force is expected to significantly strengthen enforcement within the EU AML framework, reducing inconsistencies in how breaches are addressed across member states. In practice, this will likely lead to more coordinated supervision, clearer expectations for obliged entities, and more consistent and credible enforcement actions across the EU. Obliged entities should experience operating in an environment where compliance standards and enforcement approaches are aligned at the European level.

Q3 Real estate STR reporting rose by 80% in 2024: how much is due to enforcement, and what does this signal?

The 80% increase in STRs from the real estate sector in 2024 reflects a combination of factors, not enforcement alone. A key driver has been increased guidance and outreach, particularly around the identification of red flags, as well as the publication of the NRA, which provides sector-specific insight into the threats and vulnerabilities faced by real estate operators. More focused supervisory activity has also played an important role. For example, following thematic reviews of the property sector, guidance papers were issued to help real estate professionals implement practical controls and compliance frameworks to address the highest risks in the sector.

Enforcement action and legally binding directives requiring remediation have also contributed to higher reporting levels. Entities subject to enforcement measures often strengthen their internal controls, which can lead to increased identification and reporting of suspicious activity. At the same time, the publication of enforcement outcomes has a broader cross- sectoral impact. By highlighting key findings, these publications help other obliged entities understand compliance weaknesses and areas of risk. The key takeaways from these publications provide practical guidance on what obliged entities should pay particular attention to when enhancing their AML/CFT controls, and how these enhanced controls also contribute to increased reporting across the sector.

All this also points to a growing maturity within the sector itself and a strengthening of the AML/CFT compliance culture. Although progress has certainly been made, reporting in the sector remains below optimal levels, especially considering the importance of the real estate business in Malta.

Q4 How is the FIAU thinking about AI in financial crime (both risk and detection)?

AI is becoming an increasingly important contributor to effective compliance. This enables more efficient, proactive, and data-driven approaches to risk understanding and management. Through advanced data analytics and machine learning, AI systems can process vast volumes of transaction data, detect unusual patterns, and identify potential suspicious activity more quickly than traditional methods. Through AI-enabled tools, transaction monitoring shifts from a static to a more dynamic approach, adapting to new patterns and trends and enabling more rigorous future-looking monitoring. This allows compliance teams to prioritise high-risk cases, focus resources effectively, and reduce false positives. At the same time, not every process needs to be AI-driven to be efficient; well-designed automated or hybrid controls, clear procedures, and human oversight remain essential components of an effective compliance framework. Manual controls may also be effective, particularly for smaller businesses that have more visibility of their customers and the activities undertaken.

FIUs and AML Supervisors are also increasingly relying on advanced analytics and technology globally. FIUs are adopting state-of-the-art IT solutions to enable faster, more efficient cross-matching of data, while Supervisors are implementing tools that enable more holistic risk understanding and data analytics for focused risk sampling. The emphasis for regulators is on pattern recognition, real-time cross-border matching, and anomaly detection.

AI is also increasingly being used for illicit purposes. Criminals rapidly exploit new technologies, especially AI-driven fraud, identity spoofing, deepfakes used for onboarding, synthetic identities, and automated layering. Awareness campaigns for the public are therefore on the increase, as is global outreach for enhanced mechanisms to more effectively detect and manage fraud. Criminals move at the speed of money, exploiting opportunities in real time, while regulators traditionally move at the speed of the law. AI is helping bridge that gap, enabling compliance and enforcement to keep pace with increasingly sophisticated financial crime.

Q5 How do you see the FIAU’s role evolving as Malta’s financial services sector grows?

The FIAU is already a mature supervisor; therefore, it’s not about evolving but about building resilience. Data-driven, risk-focused supervision, for both the financial and non-financial sectors, is built into the FIAU’s supervisory strategy. Enforcement actions are equally risk-based, ensuring that the administrative measures imposed are proportionate to the materiality and severity of the failures observed, effective in driving corrective and remedial actions, and dissuasive by reaching all obliged entities, with a focus on ensuring effective controls are implemented. Intelligence is also risk-oriented, shifting to prioritise high-impact cases and more targeted disseminations. This, in turn, strengthens our preparedness for the EU AML package.

The Authority’s ability to anticipate, withstand, respond to, and adapt to evolving risks while maintaining effective supervision and enforcement necessitates continuous investment in data, technology, and analytical tools, reinforced cooperation and information sharing with local and foreign counterparts, and sustained public trust. Indeed, an important component of the local compliance ecosystem has always been the FIAU's support for obliged entities, providing guidance and assistance through outreach events and one-to-one sessions whenever necessary. While our precise role in guidance and outreach is still to be fully understood under the new EU AML Package, we remain fully committed to supporting all stakeholders and adding value in ensuring effective AML/CFT controls are implemented.

Q6 You've built your career from the ground up within one of Malta's most important regulatory institutions. What would you tell those entering the field today?

Be curious from an early age. Studying is essential, but work experience will shape you into someone who can focus on multiple projects, manage time effectively, and appreciate the sacrifices for a better tomorrow. Curiosity should not end with a degree; if anything, that should be a stepping stone. Be curious, ask questions and don’t be afraid to stand out. Mistakes will shape you, not break you. Keep your feet on the ground, understand where you can improve, and find a mentor who will shape who you are. Don’t close yourself off to only your section; an organisation such as the FIAU has many different functions that enable you to learn more, grow, and understand how things can be improved. Whatever you do, keep the organisation’s values at heart, be firm but just, listen with empathy, and give your opinion, even if it contradicts the rest of the room. Always address change as an opportunity and not as a threat, be it changes in processes, procedures or technologies, see the change with an open mind and identify how this will more effectively shape your work, not threaten it. Above all, make sure that whatever you do brings happiness to your heart and gives you the energy you need to always move ahead in time.

This is the first edition of The Boardroom Brief, a series featuring in-depth conversations with the financial leaders shaping Malta's economy.