A more agile and data-driven regulator
MFSA’s digital transformation is enhancing its supervisory effectiveness
June 8, 2021
4 min read
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Consider a five-minute power cut. The electricity is gone, all the appliances have come to a standstill, the WiFi signal has just disappeared and your mobile is running out of juice. It is such instances that show us the importance that technology has in our lives – and the dependency we have on it. 
Not just us – but whole sectors, including financial services whose players have, in recent years, recognised the need to step up their digital capabilities. 
In 2019, the Malta Financial Services Authority launched its Technology and Data Management Strategy. Designed to cater for the digitisation and digitalisation of the MFSA’s operations over a period to 2025, its objective is to enable a more harmonised, data-driven and risk-based supervision. The strategy was inspired by the MFSA’s acknowledgement that, together with its human capital, the digitalisation of its processes will provide unmatched capability to drive both efficiency and effectiveness in the Authority’s supervisory efforts, in line with its priorities. 
“The Authority's ‘digital transformation’ is a concept which has been enshrined in our vision and is more than just an isolated technology implementation. It is one of our Business Strategy pillars,” said Reuben Vella, MFSA Head Technology. 
The MFSA’s Technology team was restructured to enhance technology governance, delineate better functional expertise in IT operations and strengthen information systems management and development. 
“Furthermore, in view of this strategy, the MFSA needed to renew its infrastructure, while adapting its human resources. We have built a new platform that, together with updated devices, could provide our people with a secure and seamless mobility. This meant that our people could work from outside the office safely, securely and efficiently. 
“Innovative technologies have shifted the way we do business, and to push this strategy forward, our people also needed to be empowered, through training, in order to adapt to a new way of working. When the coronavirus pandemic hit, we already had a high level of readiness,” said Vella. 
“The improvements we had made on the technical infrastructure made the transition from office to remote work seamless, with 50 per cent of the staff complement working from home as early as March 2020. It also enabled us to keep our supervisory commitments with the industry. 
This not only enabled the Authority to be at the forefront of technological modernisation, but also empowered the rest of the workforce to continue operating unhindered, which is evident from the significant increase in inspections carried out in 2020 when compared to the previous year. The MFSA is also demonstrating organisational agility by facilitating information access, sharing and collection through its various software solutions. Websites such as the Licence Holder Portal enables existing and prospective licence holders to submit documents, returns, applications and any data requested by the Authority online through secure means. 
Technology is not a one-act play – another driver for digital transformation is data. 
“Data-driven supervision is seen as critical for increasing effectiveness – and is an inherent element in the MFSA’s strategy,” said Daniela Bagnaschi, Head of Data Management and Business Intelligence.
“Our aim is to become a data-driven organisation with a risk-based approach, and our strategy sets formal data governance and centralised data management at its core. A data-driven supervisory approach is based on key performance indicators and risk metrics.  It is an approach aimed at identifying emerging risks earlier through deep insights and analytics,” added Bagnaschi. 
The MFSA’s entire data architecture is being rebuilt and a new data warehouse has been set up. Works on a new business intelligence platform are also underway. Such changes in the data infrastructure also enabled the MFSA to make efficiency gains through standardised management information and dashboards
“The MFSA is the single financial services regulator in the jurisdiction and the cross-sectorial span of supervision and regulation is significant and diverse,” said Kevin Fitzgerald, MFSA Head Project Management and Quality Assurance. 
“As part of the MFSA’s transformation, we looked at business process re-engineering and identified the commonalities across different sectors clearly articulating the specificities. This has been a huge effort and involved analysing more than 800 processes. The re-engineering of core business processes, in order to make them more streamlined, will improve their efficiency and effectiveness,” added Fitzgerald. 
“There were also other processes that involved the definition of metrics and the upgrading of the management information network. All this translates into greater efficiency, as well as more committed timelines and transparency,” said Bagnaschi.
“The change is sizeable, as much as it is a learning process, and has to be incremental. The MFSA’s digital transformation is a journey – and these are the first important steps.” 
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