“The banking sector has experienced huge transformational shifts over the past 30 years however, the industry needs to be prepared because in just the next five years, the changes are going be significantly bigger.”
This was stated by Kenneth Farrugia, Chair of the Malta Bankers Association in his opening address of the 10th annual Banking and Payments seminar organised by Ganado Advocates.
In his delivery, Mr Farrugia addressed key topics that are impacting the banking sector including the rapid evolution of payment methods, how fintech companies are having a significant impact on the traditional banking model and how the challenges of cybersecurity threats continue to underscore the need for vigilance in protecting customer data and maintaining trust in the banking sector.
Referring more specifically to the impact of AI on banking, Mr Farrugia noted that the impact that this technology is having on most sectors will also define the future of banking as we know it.
“AI is here to stay and it will bring as much change to banking as much as we have witnessed over the past thirty years. However, we must embrace this technology and view it as an opportunity that can enable more meaningful customer experiences.”
Dr. Conrad Portanier, Partner, at Ganado Advocates also delivered an opening address during which he emphasized the significant regulatory and geopolitical shifts shaping the banking sector, particularly in the EU’s evolving role on the global stage.
“The coming years will be defined by a careful balancing act between streamlining regulation and maintaining standards to protect stakeholders’ interests. With increasing divergence between the US and the EU—especially in areas like digital finance, sustainability policies, and financial market regulation—Europe is re-evaluating its regulatory framework to remain competitive.
Dr Portanier pointed out the Draghi report’s stark warning that Europe’s economic decline is an “existential challenge” that requires urgent investment and regulatory reform to prevent further loss of competitiveness and highlighted the shifting dynamics in Malta’s legislative landscape, particularly in banking and financial regulation.
“Europe’s growing reliance on non-EU payment providers raises strategic concerns, reinforcing the urgency of initiatives like the Digital Euro. But while regulatory oversight is crucial, excessive red tape could stifle innovation. It is therefore imperative that the EU finds a way to encourage growth while ensuring robust governance,” he added.
In their presentation on the AI Act and the challenges and opportunities for financial services providers, Paul Micallef Grimaud and James Debono from Ganado Advocates described the AI Act as a turning point in global technology regulation.
“The AI Act’s classification of specific AI applications as ‘high-risk’ compels financial services providers to enhance their compliance frameworks, ensuring AI systems are transparent, accurate, and under human oversight.
Companies operating in high-risk AI sectors will need to conduct rigorous risk assessments and ensure transparency, or risk facing significant penalties,” said Dr Micallef Grimaud.
Non-compliance could lead to severe penalties, with fines reaching €35 million or 7% of global turnover. This is a clear signal from the EU that AI innovation must go hand in hand with safety, accountability, and respect for fundamental rights.
“By bearing in mind AI Act obligations during AI system development or usage, banks and other financial service providers can foster innovation while maintaining compliance and ethical standards.” added Dr James Debono.
“By introducing regulatory sandboxes, the AI Act potentially provides financial services providers with a secure environment to innovate and test AI applications, balancing technological advancement with compliance.”
Their presentation was followed by a keynote address by esteemed lawyer and financial industry executive James H. Freis on the theme “At the crossroads of innovation: Which direction are banking and payments going?” where he addressed the global perspective in the ongoing evolution of banking and payments, particularly in the areas of regulatory compliance and technological innovation.
The seminar included two separate breakout sessions – a Banking session themed CRDVI: A focus on EU-specific reforms and a Payment Institutions session in collaboration with FIMA on the subjectThe FI Rulebook: The experience so far.
The Banking session included a presentation by Roberta Carabott, Associate, Ganado Advocates followed by a panel discussion moderated by Conrad Portanier with the participation of Catherine Formosa, Of Counsel, Ganado Advocates, Anabel Armeni Cauchi, Deputy Head, Banking Supervision at the MFSA and Laragh Cassar, an Independent Director, as panellists.
During the Payment Institutions session, a presentation by Leonard Bonello, Partner at Ganado Advocates was followed by a panel discussion moderated by Fiorentina D’Amore, Chairperson of FIMA with the participation of Paul Falzon, Senior Regulatory Advisor at Ganado Advocates, Stefan Berry, Board Member of FIMA and Samantha Cuyle, Manager, Fintech Supervision at the MFSA.
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