Banks must seize Fintech opportunity

Europe’s banking landscape is being quietly reshaped and Malta has a rare chance to carve out a valuable new role in it.

In a nutshell, a new wave of digital-first financial regulations being implemented by the European Commission gives banks in Malta the chance to reposition themselves not just as traditional lenders, but as enablers of Europe’s booming fintech sector.

I’m not alone in seeing this opportunity.

Just a few weeks ago, also writing in Times of Malta, Mark Wirth, a partner at Zampa Partners, wrote that “Malta is now positioning itself as a serious contender in the fintech space”.

Wirth is right. Though, I would add that in order to build a sustainable ecosystem for fintech to thrive, you need banks.

Instead of trying to go toe-to-toe with Europe’s big banking giants, Malta’s banks have a smarter opportunity: to become nimble, tech-friendly partners for a new generation of financial companies like fintech start-ups, digital platforms and specialised service providers, who need support to grow across the EU.

This could be a major new economic niche as the conditions are quite favourable for Malta.

Here’s why. A few years ago, the EU changed the game with a suite of rules known as PSD2, which required banks to share account data and payment functionality with licensed third-party providers. This enabled open banking and real-time, account-to-account payments to take off.

Now, PSD3 and the Payment Services Regulation (PSR) aim to further harmonise rules, strengthen fraud controls and create a more level playing field across the EU.

Added to this is the Instant Payments Regulation, adopted in 2024, which mandates that euro credit transfers be processed instantly, 24/7, and priced no higher than standard SEPA transfers. These reforms are removing barriers and accelerating fintech growth across Europe.

In practice, it means banks and fintechs will be able to work together more easily across borders. It means better fraud protection and clearer standards. And it means that smaller, tech-savvy banks, like those in Malta, can now plug into this new EU-wide financial network.

While banks in bigger EU countries might see this as more red tape, we should see it for what it is: a major opportunity.

A new growth engine for our economy- Dario Azzopardi

Malta’s banks are well-positioned to become trusted partners for fintechs seeking a regulated, reliable base from which to scale across Europe, without the complexity of setting up in every country.

But this requires a mindset shift. Banks that want to seize the opportunity must deeply understand the needs of the sector, identify fintech players with clear goals and strong frameworks and commit to growing together, delivering value for all parties involved.

Banks across Europe have already begun doing this. Some notable examples include Revolut in Lithuania, Banking Circle from Luxembourg, Lunar Bank from Denmark, ClearBank from Netherlands and us, Multitude Bank in Malta.

Many are no longer competing with fintechs but enabling them. The opportunity is so compelling that even established institutions are taking notice.

In March 2025, Italy’s UniCredit announced it completed the acquisition of Aion Bank (Belgium) and its BaaS partner Vodeno, recognising the strategic value of embedded banking delivered through modern, API-first infrastructure.

For Malta, the message is clear: we have the regulatory foundation, the licensing framework and the tech-savvy talent to build something valuable.

Maltese banks must invest in scalable digital infrastructure, strengthen their capabilities in real-time payments and compliance and position themselves as essential partners in Europe’s fintech ecosystem.

At the same time, regulators and policymakers must continue to ensure that Malta’s banks can compete fairly across Europe, with access to the same tools, schemes and regulatory consistency as their peers in larger markets.

The payoff? A new growth engine for our economy, higher-value financial sector jobs and a global positioning that far exceeds our size.

Malta has always thrived when it leaned into agility, openness and strategic clarity. That’s exactly what this moment calls for.

The window of opportunity is open. It won’t stay open forever.

Dario Azzopardi is deputy CEO of Multitude Bank.