Malta’s financial services sector has come a long way since the financial, legal and regulatory framework was overhauled in 1994.
Although numerous countries have seen a decline in the number of finance careers up for grabs, Malta has witnessed modest growth and is today recognised for excellence in financial services, with approximately 400 funds, 108 trustee services companies, 52 insurance operations, 25 banks and numerous outfits supporting the industry.
This success can be clearly attributed to the Malta Financial Services Authority as well as the high level of professionalism of service providers.
Although not considered a tax haven, Malta offers numerous tax incentives. In a 2008 Forbes Tax and Misery report, Malta ranked first as the most attractive EU country for taxes and social security contributions paid out by companies.
The island’s refundable tax credit system along with the over 50 double taxation agreements with various countries, allow firms to obtain substantial tax relief. Malta has proven to be more cost-effective when compared to other EU jurisdictions as company incorporation, maintenance costs, as well as professional fees, are significantly lower.
Local players in banking have in the main managed to avoid much of the troubles which hit a large number of players in the EU and US – thanks to the risk averse and collateral centric banking culture. All local retail banks have registered strong growth in their pre-tax profits. Malta, in terms of foreign representation, now has a total of 25 credit institutions globally, the majority of which are from the EU.
Historically, the banking sector has grown its own talent internally, employing University and Mcast graduates and cultivating their skills through both formal and on-the-job training.
New institutions and a buoyant market, have allowed for increased mobility in this sector. Smaller set-ups usually demand more specialised skills, while recruitment in larger set-ups seems skewed towards client-facing roles and IT skills, the latter being critical in the cost reduction strategies of most banks.
In January 2010 it was reported that annual gross premiums had risen to over €670 million, with 80 per cent of business geared towards the international market. Career opportunities within the insurance sector tend to be highly specialised, making previous experience and qualifications essential for most employers.
Although premium growth has been mainly driven by international business, employment growth has been modest and firms servicing the local market still provide the bulk of employment opportunities. Good talent is hard to come by in insurance; furthermore, the sector tends to havelimited visibility for prospectivejob-seekers.
The past 18 months have seen an increase in fund administrators. The skills required are highly specialised, particularly for senior roles, but fund management firms tend to employ semi-qualified professionals, thus reducing labour market pressures.
A skill spanning all sectors is compliance. Following recent upheavals in the financial world, regulators are looking to construct a comprehensive regulatory framework.
The implementation of rules and regulations, especially in cases of money laundering, as well as the need for companies to comply with the regulatory complexity of the sector have led to a high demand for complianceprofessionals.
Apart from employment created directly by the various sectors in financial services, jobs are also generated indirectly by supporting industries.
There is the positive impact on hospitality, but increasing strain has been felt in the accounting, auditing and legal fields, leading to an incredibly tight labour market and making the availability of skills in these professions extremely limited.
Considering the incentives and positive growth signals in the sector, retention of market momentum is key. Lack of talent is, however, a key risk factor that must be addressed to ensure continued growth. Demand for accounting and legal professionals as well as for roles in company administration and compliance remains high.
Although key players in the sector recognise this risk, little has been done to entice students to choose this as their area of expertise. We are constantly faced with school-leavers who believe IT is the only sector offering excellent opportunities.
In terms of training, the Institute of Financial Services (Malta) and MITC seem to work closely with the Institute of Business and Commerce at Mcast and with the Faculty of Economics, Management and Accountancy at the University. The MFSA also organises specialised training programmes.
However, more needs to be done to increase awareness of alternative qualifications. Furthermore, the complete lack of any form of paralegal training puts great pressure on financial services companies in terms of training expenditure and their ability to react rapidly to business opportunities.
Sources: www.financemalta.org, www.mfsa.com.mt, www.timesofmalta.com, www.konnekt.com.