The Malta Financial Services Authority is expecting another “four to five banks” to set up in Malta over the next few years, according to its CEO Joe Cuschieri, who added that the island needed new actors in this field.

He was fielding questions during a panel discussion during the FinanceMalta conference, the audience of which had already heard Parliamentary Secretary Silvio Schembri say that banks were struggling to adjust to the fast-changing scenario of FinTech.

Banks have been under fire from operators as the MFSA and government move on with legislation to make Malta a 'Blockchain Island' – while they drag their feet – or refuse outright – to open accounts for companies that move here to open up operations in both blockchain and cryptocurrencies.

Sources told Times of Malta it appears that the medical cannabis sector could face the same closed doors, with the government pushing to make Malta a destination of choice, but companies finding it impossible to get bank support.

In his speech to the conference, Prime Minister Joseph Muscat admitted that the banking ecosystem was not moving at par with “government and its aspirations”.

“We need to move swiftly and prudently and we need to prod financial institutions to move with us,” he said.

Asked by Times of Malta what could be done to solve this impasse, he stressed that governments could not intrude into the management of banks.

“We do need to put forward the idea that banks should not be safety deposit boxes. But we need to understand that some key players in our industry face particular challenges: internationally one bank was subjected to investigations in the US, not due to a situation in Malta but due to a situation elsewhere.

“And Bank of Valletta also has to be seen in context, not because it is doing badly – it is performing very handsomely – but because nowadays its share of the local economy is so big that, while it is a small bank at European level, it is seen as a bank with systemic impact by the Joint Supervisory Team locally.

“We cannot just say they need to do more. We need to understand their context. Part of the solution is definitely attracting more banks to the island. We are in a unique situation where the current players themselves want more competition. And that is something that we are actively pursuing.

“I was in London on Wednesday having talks among others with key players to pitch Malta as one of the markets they should be looking at in order to invest – because there is an opportunity to invest and because we need to expand our ecosystem,” he said.