The effect of fintech companies on the local financial services industry in the Maltese islands

Abstract

Technology has always been transforming our lives. Throughout the last couple of years, we have seen the rise of many financial technology firms. Nonetheless, what effects are these firms leaving on traditional brick and mortar financial institutions? How are they responding to these new emerging enterprises? This study investigates how traditional financial institutions are being impacted by these new firms. It also examines how they are confronting and adapting to these businesses. This research was enhanced by interviewing regulatory and monetary authority organisations to get a clear view of how fintech is requiring change, not only by commercial firms but also by the supervisors of our economy. This research involves different organisations from diverse financial services sectors. These consist of commercial banks, stockbrokers, insurers, and regulators. This way we can see how different sectors in the finance industry are being impacted and responding to this change. From this research, we have seen that some organisations especially banks have been negatively affected but other institutions such as insurers and stockbrokers have been less impacted. They are adapting with technology along the years and some also cater for clients who want a personalised experience and/or struggle with the use of technology. Additionally, regulators are very active in the fintech space and are consistently monitoring and overseeing these firms, without under or overregulating the industry. With the use of sandboxing, regulators can easily monitor these firms’ offering while making sure that the services they are providing, are safe and harmless to society. This research concluded that technology like all other industries is changing the way we manage our finances. Additionally, innovation is what makes us grow and advance as humans.