Banking and Financial Institutions

The industry maintains a healthy reputation ranking 38^th out of 141 countries worldwide, with regards to the local financial system. (World Economic Forum’s – The Global Competitiveness Report 2019). This is further supported by the fact that the economy remained relatively unscathed by the 2008 financial crises. As at May 2023, the number of locally licensed credit institutions totalled 17, with another 2 local branches of foreign banks. This provides for additional testimony to the strength of the industry in an island which measures just 316 square kilometres. The Central Bank of Malta (“CBM”) classifies banks into three distinct categories, namely Core Domestic Banks, Non-core Domestic Banks and International Banks. Since the advent of the Single Supervisory Mechanism (“SSM”) in November of 2014, the local Regulator (the Malta Financial Services Authority “MFSA”) jointly supervises, together with the European Central Bank (“ECB”) the three largest domestic banks. The MFSA is also directly responsible for the remaining Less-Significant Institutions and is also the first port of call for those entities looking to set-up shop in the financial services industry in Malta. Malta has positioned itself as a jurisdiction of choice for banks and other financial services players by maintaining its reputation as a robust, tax efficient, well regulated EU member state.

The introduction of Payments Services Directive II (“PSD II”) further encouraged the emergence of payment institutions and electronic money intuitions all over Europe. In fact, over 50 financial institutions (including payment and electronic money institutions) have obtained their licence from the MFSA.

In the midst of a playing field which is highly-regulated, our qualified and experienced audit, tax and advisory teams assist the majority of the banks and financial institutions on the Island. Being part of a larger network, our local advisors can also leverage expertise off other member firms, including the KPMG ECB Office, which the local office is a proud member of. The KPMG ECB Office specifically focuses on, and specializes in, pressing issues related to the SSM. Furthermore, our banking and financial institutions industry experts offer a wide range of services across all areas, including, but not limited to; the provision of external and internal audit services, project managing regulatory authority applications for banking licenses, mergers and acquisition processes, assistance with ensuring regulatory compliance, actuarial services including financial modelling and capital management, accounting advice, risk management reviews, and tax advisory, compliance and structuring services in the banking and financial services industry.

Banks and Financial Institutions are facing ever increasing additional regulatory burden, heightening requirements for the second line especially the risk and compliance functions. We can help organisations navigate these challenges by assisting these functions, and the institution in general in a multitude of ways.

Assistance to the Compliance Function:

Assistance in developing a Compliance Obligating Register and performance of a Compliance Risk Assessment.

Assistance in developing a Compliance Programme.

Delivery of compliance-related training on a number of topics which can be tailor-made to the institutions’ needs. Training can be developed and delivered to the Board of Directors, Senior Management and even first line functions depending on the needs of the institution.

Co-sourcing of the Compliance Function for a short-term period until the institution identifies additional resources.

Setting up of the Compliance Function including assistance in drafting compliance-related policies, procedures and / or frameworks.

Reviews or assistance in drafting of compliance-related policies and procedures, including but not limited to Outsourcing Policy, Complaints Handling Policy, and Product Oversight and Governance Arrangements Policy.

Performance of Regulatory Gap Analysis between the institutions’ internal policies and procedures vis-à-vis upcoming or already implemented regulations.

Assistance with regulatory correspondence on compliance matters

Assistance to the Risk Function:

Assistance in developing a Risk Management Framework, including but not limited to developing risk policies and procedures, performing Risk Assessments, and developing a Risk Register.

Delivery of risk management related training on a number of topics which can be tailor-made to the institutions’ needs. Training can be developed and delivered to the Board of Directors, Senior Management and even first line functions depending on the needs of the institution.

Co-sourcing of the Risk Function for a short-term period until the institution identifies additional resources.

Setting up of the Risk Function including assistance in drafting compliance-related policies and / or frameworks.

Reviews or assistance in drafting of risk-related policies and procedures. Such assistance can relate to enterprise-wide risk management or specific risk management areas for example; Credit, Market and / or Operational Risk.