A survey of professionals working in Malta’s financial services industry carried out by Managing Partners Group (MPG), the international asset management group, reveals the clear majority expect the sector to enjoy strong growth over the next five years.(1)
The sector currently contributes just over 12% of Malta’s GDP, but 87% believe this will be higher by 2022, with 70% anticipating it will account for 15% or more.
One of the key reasons behind this growth will be an increased focus on innovation. Some 16% of those interviewed expect product innovation in the Maltese financial services sector to increase ‘dramatically’ over the next five years and a further 68% anticipate some sort of improvement here. The main driver behind this trend will be more financial services companies locating to Malta – the view given by 71% of respondents – followed by 50% who believe the country’s flexible legislative and regulatory system will also help.
When it comes to which sectors in Malta’s financial services industry are likely to see growth between now and 2020, 82% anticipate fund administration will grow, followed by asset management, asset servicing and corporate banking (74% of those interviewed expect these sectors to grow over the next three years).
|Financial services sector in Malta||Percentage of respondents who expect ‘dramatic’ growth over the next three years||Percentage of respondents who expect ‘slight’ growth over the next three years||Percentage of respondents who expect growth over the next three years|
Jeremy Leach, Chief Executive Officer at MPG, commented: “Our research shows that people working in Malta’s financial services sector expect their industry to enjoy strong growth over the next few years. The pool of talent in the industry, its level of professionalism and the robust but flexible regulatory environment provide the building blocks for the industry to continue to grow and build on its reputation as a leading international financial services centre.”
Kenneth Farrugia, Chairman of Finance Malta, commented: “The results of this survey and the highly positive outlook therein are primarily driven by the growth that the industry is currently experiencing particularly in the asset management, insurance and private wealth sector.
“Despite Malta’s relatively recent entry in the international financial services arena, innovation-led developments such as the Notified AIF (NAIF) in the asset management sector, the Protected Cell legislation in the insurance sector, which I must add is unique in Europe, as well as the presence of a highly competitive securitization framework, have attracted a number of international operators to Malta.
“This has in turn brought about a marked increase in business as a result of an increase in the business being managed through existing operators but equally so driven by the new financial services operators that are setting up in Malta.”
Joe Portelli, Chairman of the Malta Stock Exchange, added: “Malta offers a highly competitive, cost-effective solution for any company looking to establish itself within the EU. As more companies consider their Brexit options, we anticipate that Malta’s qualities as a well-regulated, English-speaking financial centre with a hardworking and educated workforce will prove to be very attractive to them.”