Positive wildcards
17 Sep 2025
As a centre for asset servicing, Malta is growing rapidly from a low base, and should continue to do so in 2025-26. Andrew Hutchings asks are EU standards, the rise of digital assets, and increasing AI, major – and positive – wildcards?
Image: proxima_studio/stock.adobe.com
The year 2025 will probably be remembered for higher tariffs, as the United States government moved decisively away from the multi-lateral institutions and free(ish) trade that had characterised the global economy over the previous 80 years.
This does not appear to pose a problem for Malta. As a small, services-focused economy within the EU, and one that runs a trade deficit with the US, Malta is far less exposed to the big changes than, for instance, Germany. A spokesperson for FinanceMalta, an initiative to promote the international financial centre, highlights a recent survey by the local office of consultancy PwC that found that two-thirds of the country’s CEOs say that they are not worried about higher tariffs in the US.
Other commentators also emphasise the general solidarity of the EU in face of challenges from elsewhere. As an official at the Malta Financial Services Authority (MFSA) notes: “The current situation presents the country and its regulators with an opportunity to further strengthen their engagement within EU structures and contribute to regulatory and policy development at the EU level.”
Strengthening the regulatory environment in 2025-26
Meanwhile, the coming year will see a number of important regulatory changes. According to FinanceMalta: “This includes the implementation of AIFMD 2.0 from 16 April 2026, which will allow alternative investment funds to source depository services from other EU member states.
“There will also be an updating of the Rulebook for Trustees and Fiduciaries: this will align requirements for both professional and non-professional trustees with FATF standards.
“Additionally, Malta will update its framework for the beneficial ownership register of trusts to align with the 2024 EU Anti-Money Laundering Directive and Regulation, ensuring compliance with new EU-wide obligations.”
The MFSA adds: “We recently launched a series of initiatives to streamline regulatory processes and frameworks to better align with the current structure and pro?le of the Maltese asset management industry.
“These initiatives include simpli?ed processes for authorising start-ups and growth-stage professional investor funds and fund services, as well as streamlining the process for European Venture Capital and Social and Environmental funds.
“Additionally, an unincorporated Limited Partnership structure for funds, the Special Limited Partnership Fund, has just been introduced. Meanwhile, the regulatory interplay between single family trust setups, wealth management, and investment fund structures under Maltese law has been re?ned.
“These initiatives should continue to strengthen Malta’s positioning within the European Single Market for ?nancial services as underpinned by various EU legislative frameworks regulating retail and alternative investments, market intermediation services and — more recently — the crypto asset market.”
Still in growth mode
Malta’s asset servicing industry is likely to continue its expansion over the coming year or so. As a FinanceMalta spokesperson observes: “In the coming years, we anticipate continued growth in the asset servicing industry, with recognised fund administrators offering a range of back office services to other group entities.
“This follows a strong upward trend in recent years with assets under administration for non-Malta-domiciled funds rising from €5.8 billion in 2022 to €9.4 billion in 2024.
“Malta’s comprehensive digitisation strategy is already helping fund administrators and custodians to streamline their operations, improving efficiency and reducing costs.
“As we look forward, digital tools will become increasingly embedded. For instance, the Trusts Ultimate Beneficial Ownership Register platform has been upgraded to feature automation, improve efficiency, and data accuracy.
“Another trend is digital assets being further integrated into the financial services sector. As an early regulatory adopter of digital assets in the EU, MFSA is already on the front foot and has recently published a position paper on the use of tokenisation as part of the transfer agency process within the fund industry.”
The regulator is similarly upbeat. As an MFSA official notes that investment in technology in general and AI in particular should boost growth: “Asset servicing ?rms are increasingly adopting automation to enhance operational ef?ciency and reduce costs, particularly for functions such as reconciliations, transaction monitoring and regulatory repository.
“On the downside, small and medium-sized ?rms may face challenges in keeping pace with technological developments due to limited resources.
“These are challenges the MFSA remains particularly sensitive to. We will continue to monitor their impact on the competitiveness and resilience of these ?rms.
“The increased use of technology in asset advisory services also triggers a need for more investment against heightened levels of cyber risk. Asset management ?rms must therefore continue to invest in robust IT infrastructure and employee training, to safeguard operational integrity and maintain client trust.”
Two wildcards to watch
Digital assets remain something of a positive wildcard, as a FinanceMalta spokesperson explains: “Malta prides itself on being a hub for digital asset innovation. When the Markets in Crypto-Assets Regulation came into force in 2024, the MFSA was in a strong position to move quickly, without rushing, by virtue of the fact that Malta was the first country to implement a full licensing regime for Crypto-Asset Service Providers back in 2018 when it adopted the Virtual Financial Assets Act.
“More broadly, Malta’s agile ecosystem has allowed it to successfully regulate fast-evolving industries whether that be digital assets, esports, or iGaming. This is thanks to a proactive and nimble regulatory approach that reduces risks while fostering innovation.”
Meanwhile, the regulator has established a specialised Fintech Supervision team. The team undertakes risk-based assessments of CASPs and oversees formal applications from companies that are involved with digital assets. The team represents the MFSA at EU-level forums and engages with fintechs in order to better understand their business models.
AI is also a positive wildcard. As a FinanceMalta spokesperson notes: “While many of the implications are still unknown, we are already seeing the increasing adoption of AI and digital tools by financial firms to reduce administrative burdens and enhance operational efficiency.”
In early June 2025, the MFSA began a three-month survey on the use of AI by financial entities. In the words of an official, the survey “should enable the MFSA to better understand the extent AI is being used by licensed entities, which sector or sectors are making predominant use of it and the purpose for which AI is being used”.
The human factor
Availability of skilled personnel is not a constraint on the further development of Malta as an asset servicing centre. As a FinanceMalta spokesperson points out: “Malta boasts a wealth of talent in the financial services industry with the local labour pool being made up of highly skilled, English-speaking professionals. This is partly thanks to joint efforts between the National Skills Council, the Malta Institute of Accountants, the University of Malta, and MCAST.”
A MSFA official adds: “To complement the existing skills base, Malta also offers an attractive tax package for expats taking up designated professional roles in ?nancial services and other high-value sectors.
“This makes Malta an attractive destination for highly skilled expatriates and companies looking to establish a presence in the EU, thereby driving further development in the sector.”
The bottom line
Malta is an international financial centre where the geopolitical storms of 2025 are unlikely to have much impact.
Far more important for a centre where asset servicing is growing rapidly from a low base are regulatory changes and further alignment with EU norms. Digital assets and AI represent positive wildcards.
This does not appear to pose a problem for Malta. As a small, services-focused economy within the EU, and one that runs a trade deficit with the US, Malta is far less exposed to the big changes than, for instance, Germany. A spokesperson for FinanceMalta, an initiative to promote the international financial centre, highlights a recent survey by the local office of consultancy PwC that found that two-thirds of the country’s CEOs say that they are not worried about higher tariffs in the US.
Other commentators also emphasise the general solidarity of the EU in face of challenges from elsewhere. As an official at the Malta Financial Services Authority (MFSA) notes: “The current situation presents the country and its regulators with an opportunity to further strengthen their engagement within EU structures and contribute to regulatory and policy development at the EU level.”
Strengthening the regulatory environment in 2025-26
Meanwhile, the coming year will see a number of important regulatory changes. According to FinanceMalta: “This includes the implementation of AIFMD 2.0 from 16 April 2026, which will allow alternative investment funds to source depository services from other EU member states.
“There will also be an updating of the Rulebook for Trustees and Fiduciaries: this will align requirements for both professional and non-professional trustees with FATF standards.
“Additionally, Malta will update its framework for the beneficial ownership register of trusts to align with the 2024 EU Anti-Money Laundering Directive and Regulation, ensuring compliance with new EU-wide obligations.”
The MFSA adds: “We recently launched a series of initiatives to streamline regulatory processes and frameworks to better align with the current structure and pro?le of the Maltese asset management industry.
“These initiatives include simpli?ed processes for authorising start-ups and growth-stage professional investor funds and fund services, as well as streamlining the process for European Venture Capital and Social and Environmental funds.
“Additionally, an unincorporated Limited Partnership structure for funds, the Special Limited Partnership Fund, has just been introduced. Meanwhile, the regulatory interplay between single family trust setups, wealth management, and investment fund structures under Maltese law has been re?ned.
“These initiatives should continue to strengthen Malta’s positioning within the European Single Market for ?nancial services as underpinned by various EU legislative frameworks regulating retail and alternative investments, market intermediation services and — more recently — the crypto asset market.”
Still in growth mode
Malta’s asset servicing industry is likely to continue its expansion over the coming year or so. As a FinanceMalta spokesperson observes: “In the coming years, we anticipate continued growth in the asset servicing industry, with recognised fund administrators offering a range of back office services to other group entities.
“This follows a strong upward trend in recent years with assets under administration for non-Malta-domiciled funds rising from €5.8 billion in 2022 to €9.4 billion in 2024.
“Malta’s comprehensive digitisation strategy is already helping fund administrators and custodians to streamline their operations, improving efficiency and reducing costs.
“As we look forward, digital tools will become increasingly embedded. For instance, the Trusts Ultimate Beneficial Ownership Register platform has been upgraded to feature automation, improve efficiency, and data accuracy.
“Another trend is digital assets being further integrated into the financial services sector. As an early regulatory adopter of digital assets in the EU, MFSA is already on the front foot and has recently published a position paper on the use of tokenisation as part of the transfer agency process within the fund industry.”
The regulator is similarly upbeat. As an MFSA official notes that investment in technology in general and AI in particular should boost growth: “Asset servicing ?rms are increasingly adopting automation to enhance operational ef?ciency and reduce costs, particularly for functions such as reconciliations, transaction monitoring and regulatory repository.
“On the downside, small and medium-sized ?rms may face challenges in keeping pace with technological developments due to limited resources.
“These are challenges the MFSA remains particularly sensitive to. We will continue to monitor their impact on the competitiveness and resilience of these ?rms.
“The increased use of technology in asset advisory services also triggers a need for more investment against heightened levels of cyber risk. Asset management ?rms must therefore continue to invest in robust IT infrastructure and employee training, to safeguard operational integrity and maintain client trust.”
Two wildcards to watch
Digital assets remain something of a positive wildcard, as a FinanceMalta spokesperson explains: “Malta prides itself on being a hub for digital asset innovation. When the Markets in Crypto-Assets Regulation came into force in 2024, the MFSA was in a strong position to move quickly, without rushing, by virtue of the fact that Malta was the first country to implement a full licensing regime for Crypto-Asset Service Providers back in 2018 when it adopted the Virtual Financial Assets Act.
“More broadly, Malta’s agile ecosystem has allowed it to successfully regulate fast-evolving industries whether that be digital assets, esports, or iGaming. This is thanks to a proactive and nimble regulatory approach that reduces risks while fostering innovation.”
Meanwhile, the regulator has established a specialised Fintech Supervision team. The team undertakes risk-based assessments of CASPs and oversees formal applications from companies that are involved with digital assets. The team represents the MFSA at EU-level forums and engages with fintechs in order to better understand their business models.
AI is also a positive wildcard. As a FinanceMalta spokesperson notes: “While many of the implications are still unknown, we are already seeing the increasing adoption of AI and digital tools by financial firms to reduce administrative burdens and enhance operational efficiency.”
In early June 2025, the MFSA began a three-month survey on the use of AI by financial entities. In the words of an official, the survey “should enable the MFSA to better understand the extent AI is being used by licensed entities, which sector or sectors are making predominant use of it and the purpose for which AI is being used”.
The human factor
Availability of skilled personnel is not a constraint on the further development of Malta as an asset servicing centre. As a FinanceMalta spokesperson points out: “Malta boasts a wealth of talent in the financial services industry with the local labour pool being made up of highly skilled, English-speaking professionals. This is partly thanks to joint efforts between the National Skills Council, the Malta Institute of Accountants, the University of Malta, and MCAST.”
A MSFA official adds: “To complement the existing skills base, Malta also offers an attractive tax package for expats taking up designated professional roles in ?nancial services and other high-value sectors.
“This makes Malta an attractive destination for highly skilled expatriates and companies looking to establish a presence in the EU, thereby driving further development in the sector.”
The bottom line
Malta is an international financial centre where the geopolitical storms of 2025 are unlikely to have much impact.
Far more important for a centre where asset servicing is growing rapidly from a low base are regulatory changes and further alignment with EU norms. Digital assets and AI represent positive wildcards.
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