PwC Malta, in collaboration with FinanceMalta, has carried out the first local Financial Services Survey. The survey was carried out between March and April 2016 and was directed towards the regulated banking, insurance and asset management institutions. The survey will be held on a semi-annual basis and will serve to gauge trends and industry developments over time.
The survey shows that there is strong performance within the sector with 59% of firms reporting increased business volumes over the previous six months. Total operating expenditure is on the increase, driven mainly by increasing levels of employment, increased salary costs, larger IT expenditure, as well as increasing costs for regulatory compliance. These increased costs appear to be impacting the insurance sector in particular.
The survey also invited respondents to give their views on Malta's competitiveness as a financial services centre. Respondents flagged a number of issues particularly with regard to the impact of the proposed Base Erosion and Profit Sharing (BEPS) tax rules, the introduction of the Common Reporting Standard, Malta's international repute coming under attack as a result of Panama Papers, as well as the Brexit referendum. One also notes the concern raised with regard to the difficulty in opening and maintaining bank accounts locally.
Kevin Valenzia, PwC Malta Territory Senior Partner commented, "Malta is today recognised as a leading European financial services centre, combining high regulatory standards and rigorous enforcement. However, it is a highly sensitive and volatile industry and there are challenges and threats that need to be addressed by policy makers and regulators in order to sustain Malta's competitiveness."
Kenneth Farrugia, Chairman of FinanceMalta commented, "This survey will surely prove to be an important indicator of the business confidence and sentiment of the financial services industry in Malta. Its results will also allow policy makers and other stakeholders of the industry to strengthen the success factors that are deemed as key drivers of growth of the sector and to better manage the challenges that the industry faces from time to time."
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