[WATCH] 'Banks also at forefront of war against terrorism'

Combating financial crime - protecting Malta's economy

In the wake of the ‘Panama Papers’ revelations and the ensuing fallout, it was even more imperative for banking institutions and financial services providers to protect Malta’s reputation of the financial services stage.

In a half-day seminar at the Westin Dragonara in St Julians, organised by the Malta Bankers’ Association – ‘Combating financial crimes – Protecting Malta’s economy’ – the consensus among the guest speakers was that maintaining Malta’s standing as a reputable and well-regulated financial services jurisdiction was critical.

Andrew C. Beane, CEO of HSBS Bank Malta p.l.c., was very adamant. “Every banking institution’s ultimate responsibility is to safeguard the reputation of the jurisdiction in which we operate. What remains is to determine how to fully comply with all regulations and legislation while acting in the best possible interests of all our stakeholders.”

MBA chairman Mario Mallia highlighted the importance of striking the right balance between locking criminals out of the banking system and allowing easy access to legitimate businesses.

The association’s secretary general James Bonello said that the financial services sector, particularly banks, were facing significant challenges with the introduction of measures aimed at achieving higher compliance standards in relation to the prevention of money laundering and funding of terrorism.

Combating financial crime was important not just for the industry but for the Maltese economy as a whole, he said.

He also acknowledged the fact that differences have arisen between credit institutions and services intermediaries, who are questioning the banks’ cautious approach in implementing these measures.

Stephen Attard, partner at Ganado Associates, expanded further on this divide between banks and financial services intermediaries.

“I see a sufficient lack of effort by banks to try and understand the point of view of intermediary firms,” he said. “I often feel a unbearable level of paranoia coming across, and we need to be clear with each other when addressing these issues.”

He criticised the banks for choosing to abandon their risk-based approach to doing business in the past few years, in favour of introducing fixed thresholds across the board and adopting an inflexible ‘one size fits all’ system.

John Scicluna, Money Laundering Reporting Officer at Bank of Valletta p.l.c., said that the success of any strategy to combat financial crimes was based on three key factors: communication, technology and data monitoring.

“Today, terror groups like ISIS have a much better organised structure, employing accountants and lawyers, and even going as far to project the costings of each of their activities, he said.

“And banks and financial institutions are today at the forefront of this war.”

The seminar was also addressed by finance minister Edward Scicluna via video link and Manfred Galdes, Juanita Bencini, Michael Stellini, Yvonne Willemsen from the European Banking Federation, Ronald Attard, Marc Alden and Cynthia Borg.