MONEY ISSUE 82 by BE.COMMUNICATIONS

Theo Dix / 18

Sarah Curmi · Maria Cauchi Delia · Rose Marie Azzopardi / 36

The Laferla Brothers / 22

Manuel Delia / 32

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Editor’s note — Welcome to the latest edition of Money! We're diving deep into the exciting world of finance as we mark Malta's 20th year in the EU. It's the perfect time to reflect on our journey and gear up for the future.

Our cover story is a must-read interview with the Laferla brothers, Mark Jr., Keith, and Kevin. Dayna Camilleri Clarke sits down with them to uncover the secrets behind their success at Laferla Insurance Group, a giant in Malta's insurance world, for over 40 years. Get ready to be inspired by their innovative plans and familydriven leadership.

Vanessa Macdonald examines Malta's new national strategy for financial services and talks to top stakeholders to reveal what lies ahead for our financial sector. With so much change in the air, these insights are essential for anyone involved in business or finance.

Theo Dix takes us on a journey through Malta's transformation over the past two decades. EU membership has brought incredible growth but also some significant challenges. Theo explores how Malta plans to tackle these issues and aim for a bright, sustainable future.

Real estate is always a hot topic here, and Josef Cutajar and Justin Mizzi have covered it well. They discuss planning concerns, oversupply, and housing affordability, highlighting the crucial role of real estate in Malta's financial market.

Manuel Delia examines the impact of Malta's removal from the Financial Action Task Force greylist. The situation has been a roller coaster for the industry, and Manuel explains the ongoing challenges and the importance of solid regulations.

Women in finance are making waves, and Giselle Borg Olivier shines a light on their journey. Through chats with Sarah Curmi, Maria Cauchi Delia, and Rose Marie Azzopardi, she highlights women's strides and the hurdles they still face.

Open banking could be a game-changer for Malta. JP Fabri explores how we can learn from the UK's success to boost innovation and efficiency in our financial services.

Burnout is a buzzword we hear a lot these days. Dayna Camilleri Clarke talks to psychologist Patrick Psaila about recognising and beating burnout, offering practical tips we can use.

For those looking to grow and protect their wealth, Paul Rostkowski shares strategies tailored for Maltese investors.

Finally, Luca Caruana discusses financial literacy. Recent statistics show high levels of financial stress, so he explores the tools we need to manage our money better.

We hope you enjoy this edition and find it packed with insights and inspiration. We love hearing from you, so keep the feedback coming, and let's keep this journey going together.

EDITOR Anthony P. Bernard

MONEY is hand-delivered to Malta’s businesses, including managers and directors of the country’s top bluechip companies, iGaming companies, all 5-star hotels, including their business centres, executive lounges and rooms (where allowed), all foreign embassies and Maltese embassies abroad (Rome, Brussels, London, Vienna and Madrid). All government ministries and entities.

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NEBA

olive grove evenings are this Summer’s indulgence

Quo vadis? The future of Malta's economy

What lies ahead for Malta's financial services in the coming years? We now have a national strategy, but Vanessa Macdonald asked some of the country's influential stakeholders how they see things.

From bricks to bonds

Over recent years, local investors have increased their focus on the Maltese real estate market. This attention highlights planning concerns, oversupply issues, and housing affordability challenges. Josef Cutajar, financial analyst, and Justin Mizzi, real estate valuer, delve into the central role of real estate in the Maltese capital market.

Malta's next 20 years

This year marks Malta's 20th anniversary of EU membership, a period that has driven significant transformation and unparalleled growth. Theo Dix delves into how the nation reflects on its journey and plans for a sustainable and prosperous future amidst rising population and economic challenges.

Triple Coverage

For over four decades, the Laferla Insurance Group has proudly served as a leading provider in Malta's insurance sector, delivering an extensive range of services, from personal insurance products to bespoke commercial and employee benefit coverage. Today, with the second generation of the Laferla family at the helm, the company remains as strong as ever. Dayna Camilleri Clarke recently had the opportunity to sit down with the executive directors, Mark Jr. and Keith Laferla, along with senior management team member Kevin Laferla. During their discussion, they delved into the pillars of their success, the impact of family dynamics on their business, and their exciting plans years to come.

Between the grey and the white

Since Malta was removed from the Financial Action Task Force greylist, the nation has grappled with the enduring trauma and fear of returning to financial isolation. Manuel Delia investigates how the changes in regulation and oversight have reshaped industries, often with severe consequences for smaller businesses and charities.

Unlocking the potential of open banking in Malta

Open banking has revolutionised the financial sector globally, with the UK setting a prime example of successful implementation. Despite this, Malta lags. JP Fabri explores how Malta can learn from the UK's experience to foster innovation, enhance efficiency, and understand the pivotal role of the government in overcoming potential market limitations.

Maximising ROI

Investing in EU product certification goes beyond mere compliance; it is a strategic financial decision that significantly enhances market access and consumer trust. According to Ing. Stephen Mallia, ensuring safety and quality through certification drives higher returns and mitigates financial risks, making it a crucial investment for long-term business success.

Beating burnout

Women in finance: From barriers to boardrooms

The battle of the sexes rages on, especially in the business arena. Sarah Curmi, Maria Cauchi Delia, and Rose Marie Azzopardi are all involved in the world of finance and economics, albeit in different areas. Giselle Borg Olivier speaks to these three women about women's (developing) role in the finance industry.

Burnout has become an all-too-common experience for many professionals in today's fast-paced, highstakes work environment. To delve deeper into this pervasive issue, Dayna Camilleri Clarke spoke with Patrick Psaila, a distinguished psychologist and founder of PsyPotenital, to understand what burnout truly is, how to recognise its signs, and what steps we can take to prevent or recover from it.

Charting your course

Paul Rostkowski examines various wealth management strategies that Maltese investors, both local and foreign, can consider to build and preserve their wealth.

Financial wellbeing platforms

The first comprehensive statistics regarding financial literacy in Europe were released in 2023. According to PwC, 57% of workers experience financial stress, and 74% are willing to seek help to alleviate this stress. The pressing question is: Where can these workers find the guidance they need when it seems scarce everywhere? Luca Caruana analyses how these tools offer much-needed guidance for modern workplaces and professionals.

Dayna, a former newspaper editor and journalist, is a wordsmith extraordinaire. With a knack for crafting impeccable marketing text and brand manifestos, she effortlessly balances grammar and brand voice.

Giselle is a marketing professional, and independent writer and proofreader. She runs Content for Success.

JP is a founding partner at Seed, a multi-disciplinary advisory practice.

Summer magic

It's the beautiful season, so it's only fair that MONEY gives gorgeous gifts.

Justin is a real estate valuer and advisor at Archi+.

Manuel is a civil society activist and writer.

Paul is the CSO for a local alternative investment fund manager in Malta. He has extensive experience in local and international asset servicing operations, focusing on UCITS and alternative investment funds.

Stephen is a freelance product regulatory compliance expert and mechanical engineer with over 13 years of experience in the field.

Theo Dix is a senior manager leading EY- Parthenon, the global strategy consulting arm of EY in Malta.

Vanessa had every intention of retiring but so far has been caught up by exciting freelance projects and voluntary work.

Quo vadis?

Photo by Joseph Buhagiar / Unsplash

The future of Malta's economy

What lies ahead for Malta's financial services in the coming years? We now have a national strategy, but Vanessa Macdonald asked some of the country's influential stakeholders how they see things.

Why do financial services matter to the economy?

According to the National Statistics Office, between 2022 and 2023, the gross value added of the financial services sector in Malta increased by 27.60%. This is no mean feat, especially when you consider that the national GVA grew by less than half of that: 11.2%. Financial services are clearly an important part of the Maltese economy. Apart from sustaining over 18,600 employees, it supports an entire cohort of indirect activity, from the ancillary services provided by the ecosystem to the money spent by its employees, whether local

or foreign. Remember that these have the highest monthly salaries across the economic sectors.

However, the sector also attracts a variety of start-ups and investors to Malta, whose impact on the island's dynamism and innovation is also impressive.

The Malta Financial Services Advisory Council oversaw a thorough consultation process that resulted in developing a national strategy that now serves as the sector's guiding principle. The process identified areas of growth and bottlenecks that need to be eased. Work is

steadily underway on the 175 action points identified.

However, this growth has to be seen in the context of the whole economy, which the Central Bank of Malta forecasts to grow by 4.3% in 2024.

Admittedly, the forecast is that GDP will ease to 3.5% in both 2025 and 2026, but that level is still enough to generate questions about how much growth the island actually needs—the population is already over 560,000—and what the cost of that growth is in terms of social and environmental impact. →

HON. CLYDE CARUANA ↑ Minister of Finance

Despite the many challenges encountered over the past years, Malta has gained global respect and leadership in various dimensions of the financial services industry. The country's approachable regulator and diverse workforce have contributed to its success. I anticipate that this success will continue as the industry grows in its focus on sustainability and digitalisation while being bolstered and supported by a solid regulatory environment and booming technological advancements.

Thanks also to a new strategy launched last year by the Malta Financial Services Advisory Council, the industry has a clear pathway for growing its services while ensuring that due diligence and compliance remain at the forefront, along with its commitment to innovation and agility of its processes. This new trajectory and the crucial legislative harmonisation required for Malta to be at par with its EU counterparts will continue to elevate its offer's quality, appeal, and robustness.

HON. GRAHAM BENCINI → Shadow Minister of Finance, PN

There is no doubt that the decisions taken by the government over 30 years ago, which led to the development of a long-term vision of focusing on the creation of a knowledge-based economy centred on the need to move into high-value-added economic sectors, proved to be critical to the successful development of our country.

Over the past years, the decision to focus on an economic model driven by unsustainable policies, which led to a population growth of

28% and is forecast to grow to 800,000 within the next 16 years, is taking its toll on a country with a limited territory like ours. We must, therefore, shift our strategy to creating new higher value-added economic sectors once again to reshape our economy to one based on excellence to improve the quality of life of the Maltese population rather than one based on quantity.

PHILIP VON BROCKDORFF ↑ Professor of Economics, University of Malta

Following the pandemic years, Malta's financial sector has grown by just under 12%. This, too, reflects Malta's economic resilience in an uncertain global economic environment.

The sector's contribution to gross value added is 8.6%, and it employs over 18,000 people with an average monthly salary of €2,573. These figures amply demonstrate the sector's very important contribution to our economy and future economic prospects.

At the heart of the sector's contribution to our economy is financial stability, with the

Central Bank and the Malta Financial Services Authority playing a pivotal role in maintaining and enhancing financial stability. This stability has helped the financial and insurance sectors support inbound and outbound foreign direct investment totalling billions of euro.

Looking ahead, stability in the financial sector will remain key to Malta's economic prospects, regardless of the economic growth model applied. However, the industry will need to brace itself for far-reaching developments at the EU level, such as the Capital Markets Union, which is critical to unlocking the private capital necessary to support the funding of climate action projects, transport, and other infrastructure initiatives across the EU. Malta's financial sector will need to prepare for the revised MiFID II framework as well as the proposal to modernise payment services and open financial services data.

KENNETH FARRUGIA ↑ Chairman, Malta Bankers' Association; CEO, Bank of Valletta

Given their intrinsic and symbiotic relationship, it is imperative to concurrently consider the trajectory of the broader Maltese economy to envision the future of Malta's financial sector.

The past year's global challenges, characterised by elevated interest rates, high inflation, and regional conflicts – have undeniably impacted numerous economies. Nevertheless, the Maltese economy demonstrated resilience and continued to grow, with forecasts suggesting a cautiously optimistic outlook.

The financial sector will remain pivotal

in sustaining this growth, supporting government fiscal initiatives, aiding the local business sector in achieving its medium and long-term objectives, and assisting Maltese households in managing their finances and planning for their future.

It will also continue to spearhead innovation, champion the fight against financial crime, and catalyse positive change within the communities it is entrusted to serve.

J.P. FABRI ↑ Economist, Seed Consultancy

In shaping Malta's financial services future, we must cultivate an ecosystem that thrives on innovative regulation, a rich talent pool, and robust ancillary services. The Malta Financial Services Authority and the Malta Financial Services Strategy Advisory Council are making commendable strides in this direction. Their proactive approach to regulatory innovation ensures a dynamic and responsive environment, which is crucial for attracting and nurturing financial services firms.

Equally important is developing a highly skilled workforce to meet the industry's evolving demands. Supporting this ecosystem with top-tier legal, technological and consultancy services further strengthens our position. Integrating these elements creates a fertile ground for sustainable growth and international competitiveness. Today's concerted efforts will define Malta as a regional leader in financial services, driving economic prosperity and resilience.

KENNETH

FARRUGIA → CEO, Malta Financial Services Authority

Malta's financial sector is flourishing. To build on this momentum, we're embracing innovation. The MFSA is committed to shaping a dynamic financial landscape through forward-looking supervision and embracing cutting-edge technologies. By implementing a Supervisory Cycle Management System, we implement an outcomes-based supervisory approach that leverages data and process reengineering to enhance our effectiveness.

This will make us more agile and data-driven, ensuring we're always one step ahead. As a leading hub for financial services, Malta has already leveraged frameworks such as that for Virtual Financial Assets (VFA), which is aligned with the E.U.'s Markets in CryptoAssets (MiCA) regulation ahead of the latter's coming into force next year. We also embrace sustainable finance and work on new products that drive growth.

The MFSA is well-positioned to support the financial services industry in Malta, as we emphasise the importance of collaboration and good governance for the sector to continue to evolve and thrive.

← PIER MASSA

Malta Financial Services Advisory Council

Strategy is only as good as its implementation. On that front, as I'm staring down all the work being done by each of the work streams, I must say that much is being done to make the financial services strategy announced in March 2023 real and tangible. Much of it is foundational – not flashy or highly visible. However, it is essential to a solid and fully functioning sector on which the future success of financial services will depend. All stakeholders' sheer will and commitment to this effort have been palpable, and how we work together shows what can be achieved.

BERNICE BUTTIGIEG ↑ Chief Strategy Officer, FinanceMalta

In the future, one of the most important aspects of the economic model will be how changes to taxation will affect our competitive advantage. We see this not as a threat but as an opportunity to help us focus on high-value, technology-oriented development and other innovative niches, including FinTech, asset management, insurance, and aircraft leasing. Many of these were already identified in the strategy for financial services drawn up by the Malta Financial Services Advisory Council, where I also serve in the Program Management Office. Much work is taking place behind the scenes, and half of the deliverables planned for 2024 are already in place.

Change can only happen if it is supported at the industry level, and we are encouraged to see more emphasis on sustainable investments, including green and blue bonds, sustainability-linked bonds, social bonds, and Real Estate Investment Trusts (REITs).

Malta's next 20 years

Building a future-ready economy

Today, the country's population has grown by nearly 40%, from approximately 400,000 to over 560,000 1 , reflecting its appeal as a place to live and work.

The economy has seen significant diversification, with the development of several new sectors and growth and transformation across some existing ones. Tourism, one of the pillars of Malta's economy, has nearly doubled, with visitor numbers climbing from 1.7 million to over 3 million annually 2 . This influx has invigorated local businesses, bolstered the hospitality sector, and helped showcase Malta's rich cultural heritage to the world.

The composition of the labour force has also evolved dramatically. The number of foreign workers has grown from 5,500 to 108,000, bringing diversity to work and society. Last year alone, over 42,000 people moved to Malta, including 33,000 third-country nationals, 7,000 EU nationals, and just over 2,000 Maltese citizens who returned to Malta after living abroad.

This was the highest-ever level of immigration on record, but emigration numbers were up, too, with approximately 22,000 leaving the country, including 13,500 third-country nationals, 6,000 EU citizens, and 1,700 Maltese 3

Meanwhile, the country's GDP increased fourfold, from €4.9bn in 2004 to €19.4bn in 2023 4 Like everything in life, change often brings about both positives and negatives. On the employment front, wages across most sectors of the economy have risen substantially, and demand for work has long outstripped supply. This has been a plus for many workers, but it has also placed much pressure on businesses' top and bottom lines and constrained their expansion. Property owners have seen the value of their homes skyrocket, but for many of today's youth, home ownership has become a challenge. A Foundation for Affordable Housing report reveals that in 2023, 63% of those under 35 have a housing cost-to-income ratio exceeding 30%, with the average housing cost-to-income ratio being 44% for those who rent at market rates 5

Meanwhile, the demand for housing stock has transformed our quaint towns, villages, and distinct architecture into something more

Eurostat estimates that Malta's population will grow to approximately 700,000 within the next twenty years.

akin to the developing world. Housing stock increased by 32.8% in just a decade, from approximately 220,000 units in 2011 to close to 300,000 units in 2021 6

Reflecting on past and present to plan ahead

Looking back over the past two decades, there are some valuable lessons to learn. Rapid expansion without a plan has strained our infrastructure, housing, transportation, health, education, energy, water, sewage, and food systems. We have talent shortages across our critical social infrastructure—education, health, police, and law courts. Our governance and enforcement systems are struggling to achieve their purpose. And much of our green space has been gobbled up by development.

The famous American Benjamin Franklin is credited with saying, "Failing to plan is planning to fail." Looking forward to the next 20 years, it is clear that population and tourism growth will continue. This is not necessarily bad—it will create more work and investment opportunities and can even improve the quality of life. However, planning is needed to ensure it is done right, coupled with significant investment across the country's physical and social infrastructure.

Eurostat estimates that Malta's population will grow to approximately 700,000 within the next twenty years7. While there are no official projections for tourism, hoteliers are building enough bed stock to support 4-5 million tourists per year 8. While there is a lot of talk about changing Malta's economic model, this will take time. It is, therefore, imperative that we start planning and investing today to ensure that the next phase of the country's growth is done differently.

Building the infrastructure to underpin growth

Malta must prioritise the infrastructure development needed for tomorrow and today. This includes expanding and diversifying our energy supply, ensuring that our grid network is capable of reliable distribution to homes and businesses, and reaching renewable energy targets for the country. As we push towards more electrified transportation, we also need substantial investment in charging infrastructure alongside supply. The water →

and sewage systems must be upgraded to handle increased demand and environmental stewardship.

Transportation infrastructure requires urgent attention. But it's clear that it cannot be more of the same, with Malta now having around 18,000 vehicles for each square kilometre of road 9

At some stage, we will reach a tipping point, where the carrying capacity of our roads will be exceeded, resulting in gridlock. There will be trade-offs to be made given that modes of transport today could be very different tomorrow, particularly if (and more likely, when) self-driving cars eventually become mainstream. Yet, this must not stop planning and investment for the coming years. Instead, it calls for a more holistic approach to consider where we travel to, what we travel for, and how frequently we do it to radically alter our travel patterns and purpose rather than just modality. Making walking, cycling and public transport more attractive must be part of the equation.

As Malta's population grows, so will social infrastructure demands. Planning for new schools, hospitals, and public services must begin now to ensure these facilities are available when needed. However, like with transport, we need to think through how these public services will be delivered differently as they undergo significant transformation through the use of technology to deliver better outcomes.

Rethinking what we do and the way we do it

AI is going to radically redefine the work we do and the way we do it. It is an age that requires bold ambition and a mindset that welcomes and thrives on change. This technology will reshape sectors, automate processes, and create new job categories while making others obsolete. And we need to be ready for it. If we consider the personal computer the critical invention that started the last big wave of industrial change, AI is the key to the next one. Google CEO Sundar Pichai has expressed that AI represents a more significant breakthrough than the invention of electricity or the discovery of fire. It's set to have wide-reaching effects on our economies and societies, going far beyond the shifts we've seen with social media or the internet.

Planning is needed to ensure growth is managed well, requiring significant investment in physical and social infrastructure.

As a starting point, AI can and should be integrated across all areas of public service. Executing such a vision requires substantial planning and investment on a scale that aligns with our ambitions. Necessary investments include creating the right data foundations to make the government's data accessible and inter-operable with the proper privacy safeguards. It requires significant investment in AI talent, which, given our talent scarcity, should likely be based in a Centre of Excellence, alongside significant upskilling and training. It requires an appropriate budget for consultancy to ensure that projects are designed and executed well and generate the proper returns. Considerable investment in cloud and compute capacity is also necessary.

The required investment scale is both sizable and necessary, and it is vital that this does not get scaled back. Research carried out by the TBI for Global Change estimates that UK government AI investment could generate a 20-fold return10. In Malta, recurrent government expenditure (excluding borrowing costs) is expected to be €6.6bn in 202411 . Imagine if 1 % of this budget (€66m) was carved out annually for AI. Applying the same ROI metrics would lead to potentially €1.3bn in value, equivalent to approximately 6.8% of GDP in 2023.

Research conducted by Harvard Business Review for Google Cloud highlighted how AI companies are 40% more efficient, 44% more profitable, 71% better at customer retention and loyalty, and 74% better at employee satisfaction12. Put simply, AI can enable us to do things better, faster, and cheaper and enhance service accessibility to make it available around the clock. This creates happier employees, who can refocus their time away from tasks that can be automated, and happier customers, who get better service.

While much of the current focus is on task automation and augmentation, the impact it will have on other areas will be much more transformative. It will enable us to refocus healthcare from reactive to preventative systems and make it personalised, with medicines sequenced to DNA profiles and healthcare professionals using an individual's genetic profile alongside data to guide prevention, diagnosis, and treatment decisions.

From an educational perspective, AI will make personalised learning scalable and equitable, giving teachers more time to focus on mentorship and less on administrative tasks and students the ability to learn in a way that is more engaging and aligned with their abilities. These are just examples from two sectors. However, AI is also transforming many others.

Unlocking capital for productive investment

As we look forward to the future, the country also needs to consider how it finances and unlocks capital for investment. We are a nation of savers and property owners. However, neither of these activities is a productive use of capital.

To address this, Malta could consider establishing infrastructure funds that incentivise citizens to invest their savings in projects that yield long-term benefits for the country. These projects could include renewable energy, transportation, water and waste management systems, education, healthcare and technology. Such investments provide potential returns for savers and contribute to the nation's sustainable development. Tax incentives may also assist in catalysing it.

Furthermore, with the expectation that voluntary pension schemes will grow over the next two decades, Malta can lay the

[1] NSO. (2024). World Population Day Report: 11 July 2024. Retrieved from https://nso.gov.mt/world-population-day-11july-2024

[2] NSO. (2024). Inbound Tourism 2023. Retrieved from https:// nso.gov.mt/inbound-tourism-december-2023/

[3] NSO. (2024). Population and Migration: 2012 – 2022. Retrieved from https://nso.gov.mt/intercensal-populationrevisions-2012-2021/

[4] NSO. (2024). Gross Domestic Product: Q4/2024. Retrieved from https://nso.gov.mt/gross-domestic-product-2023/

[5] Foundation for Affordable Housing. (2023). Housing Affordability in Post-Boom Malta – The case for the third sector. Retrieved from https://affordablehousing.mt/wp-content/ uploads/2023/11/Housing-Affordability-in-Post-Boom-Malta. pdf

[6] NSO. (2023). Census of Population and Housing 2021: Final Report: Dwelling Characteristics (Volume 2). Retrieved from https://nso.gov.mt/themes_publications/censusof-population-and-housing-2021-final-report-dwellingcharacteristics/

[7] Eurostat. (2024). Population Projections [database]. Retrieved from https://ec.europa.eu/eurostat/databrowser/view/ tps00002/default/table?lang=en&category=t_proj

[8] Malta Hotels and Restaurants Association. (2022). Carrying Capacity Study for Tourism in the Maltese Islands. Retrieved from https://cm04ad.n3cdn1.secureserver.net/wp-content/ uploads/2022/09/TCC-Final-Report.pdf

[9] NSO. (2024). Transport Statistics 2023 (reference year 2022). Retrieved from https://nso.gov.mt/themes_publications/ transport-statistics-2022-2/

[10] Tony Blair Institute for Global Change. (2024). Governing in the Age of AI: A new model to transform the state. Retrieved from https://www.institute.global/insights/politics-and-governance/ governing-in-the-age-of-ai-a-new-model-to-transform-thestate

[11] Ministry of Finance and Employment. (2024). Budget 2024 – Financial Estimates. Retrieved from https://finance.gov.mt/ budget24_fe/

[12] Harvard Business Review. (2023). Big on data: Study shows why data-driven companies are more profitable than their peers [Blog]. Retrieved from https://cloud.google.com/blog/ transform/data-leaders-more-profitable-innovative-hbr-data

groundwork for pension funds to be a source of investment in the nation's infrastructure. By creating a regulatory framework now that encourages future pension funds to allocate a portion of their portfolio to domestic infrastructure projects, Malta can ensure a steady flow of capital into sectors that will enhance the country's economic foundation. Malta must also look to improve its approach to public-private partnerships (PPPs) as a means to attract private investment into public infrastructure projects. When done well, such ventures can facilitate value for citizens and businesses, ensuring that public infrastructure is developed without increasing government borrowings.

Engraining sustainability across everything

As we stand at the crossroads of an environmental imperative, it is crucial for businesses, citizens, and the government to fundamentally rethink their approach to the environment and climate change, placing sustainability at the core of their actions. For businesses, this means embracing eco-friendly practices not as a secondary consideration but as a primary driver of innovation and competitiveness.

Companies must integrate sustainable materials, energy efficiency, and waste reduction into their operations and view environmental stewardship as an investment in their future. Citizens, too, have a pivotal role to play by making conscious choices that favour sustainability, from reducing energy consumption and supporting green businesses to advocating for policies that protect our natural world. The government must lead by example, enacting robust policies that incentivise sustainable practices and investing in infrastructure that supports a green economy. Together, we must shift our mindset to one where sustainable living and business practices are not just an option but the foundation upon which we build a resilient and thriving society for generations to come.

To conclude with another quote, let's reflect on Alan Lakein's words: "Planning is bringing the future into the present so that you can do something about it now." The next twenty years will radically transform the country. Let's make sure we plan with foresight to get it right.

Triple Coverage

The Laferla Brothers:

Innovation and legacy on shielding success for 40 years

Celebrating 40 years is a significant milestone. Can you share some key moments and achievements in Laferla Insurance's journey so far?

Mark Jr. One of our most significant milestones was transitioning from representing UK insurers to creating our own health insurance products in 2000, which were underwritten locally. This was a first in the local health insurance sector, which at the time was made up entirely of foreign health insurance products. This initiative marked a new era for us and started the Laferla Health Plans.

The year 2021 marked a significant shift as we, three brothers, formally took over the leadership reins from our father while he remained the chairman of the board.

In 2022, we made a strategic investment by setting up a software development office in Tallinn, Estonia. This move allowed us to have full ownership and control over our innovations, accelerating our digital evolution and enhancing our competitive edge.

2023 was another important year for us as we integrated our life insurance operation under our agency license. This

change allowed us more flexibility in serving our clients across life and non-life lines of business more efficiently. As an example, we are now one of the few local firms able to provide corporate clients with a holistic employee benefits scheme, including health, life, and pension products for their employees.

As we commemorate our 40th anniversary in 2024, we are also thrilled to launch Digimed with two prominent local partners. We believe Digimed is a game-changing solution in the healthcare industry. This marks the first of many planned strategic investments that will integrate vertically within our core insurance offering by providing significant complementary value to our customers.

Laferla Insurance is eagerly embracing technology and innovation. What exciting new digital transformations can your clients look forward to in the coming years?

Keith Digital innovation has always been at the forefront of our strategy. As early as the 1980s, we were pioneers in linking our sales offices across the island and issuing motor insurance certificates on the spot—a remarkable achievement for its time. This forward-thinking approach →

is ingrained in our corporate DNA, driving us to continuously enhance the customer experience and operational efficiency.

Our in-house development team in Tallinn epitomises our commitment to innovation. It allows us to customise every aspect of our services to meet our client's evolving needs and match international industry trends.

Mark Jr. We are on the brink of launching groundbreaking fintech solutions, primarily featuring an app that promises to revolutionise how customers interact and administer their insurance requirements. This will be complemented by a web-based customer portal, including dedicated platforms for corporate clients. Together, these applications will introduce various new features locally that we believe will set a gold standard, leading the insurance industry into a new era of excellence.

With you, Mark Jr., Keith and Kevin at the helm, how does the dynamic of the three brothers influence the company's strategic decisions and culture?

Kevin The synergy of working closely with my brothers is genuinely invaluable. We each oversee distinct domains,

Digital innovation has always been at the forefront of our strategy, driving us to continuously enhance the customer experience and operational efficiency.

— Keith Laferla

leveraging each other's skills and expertise while collectively executing the company's vision. Our shared, forward-looking outlook and unified synergy enable us to achieve remarkable results.

This familial bond extends beyond the three of us. We are dedicated to surrounding ourselves with exceptional individuals. Our entire team shares our vision and corporate values – Family, Loyalty, Credibility, Stability and Quality –implementing these within all aspects of our operation.

Mark Jr. Our father founded the organisation in 1984 and built a solid reputation for the brand over the years. With this foundation, it felt natural for all three of us to join the company, even though he never pressured us to follow in his footsteps. Today, we are reaping the rewards of these decisions, as they have led to us becoming an extremely strong unit, which is allowing us to achieve new heights.

Customer experience has always been a cornerstone of Laferla's success. How do you plan to enhance this experience further in the future?

Mark Jr. At Laferla, we have always pursued a distinctive approach, investing heavily in brand recognition and prioritising exemplary customer service. These core principles have set us apart from our competitors and formed the foundation of our enduring success. As we continue to expand, we remain steadfast in our commitment to enhancing our brand and maintaining our reputation for unparalleled service, which is today further enhanced by our digital innovation strategy while retaining a personal approach in our customer interactions.

The insurance industry is highly competitive. What unique strategies will Laferla employ to maintain its market leadership and grow?

Mark Jr. Customer experience is the driving force behind Laferla's success. This objective has always driven us and continues to drive us to constantly and consistently improve our product and service offerings—even if we are already considered market leaders.

At Laferla, we have always pursued a distinctive approach, investing heavily in brand recognition and prioritising exemplary customer service.

— Mark Laferla Jr.

Keith Attracting and retaining exceptional talent is paramount to achieving this. While the competition for skilled professionals is intense in Malta, we are fortunate to enjoy an exceptionally low staff turnover rate. Many of our colleagues have been with us for over 15 years, some even over 30 years. Our secret lies in identifying individuals with a can-do attitude and a customer-centric mindset while working with them to enhance processes and invest in the professional knowledge and tools necessary to excel.

Laferla has consistently invested in digital solutions over the years. Can you elaborate on some of the new initiatives you are developing and their expected impact on the company's growth?

Keith Our foray into telemedicine through Digimed is an exciting venture outside the insurance sector. Leveraging our expertise in health insurance and our tech-driven approach, together with the skills and experience our carefully selected partners bring to the table, we firmly believe that it will transform healthcare experiences in Malta. It will revolutionise the way in which both medical professionals and patients interact with health data, which is in line with the EU's strategic objectives in the healthcare space.

Mark Jr. We are actively developing a broad ecosystem of applications and services with the aim of vertically integrating all these projects, which will offer tremendous value to our customers.

What are Laferla's plans for international expansion, and how do you envision the company evolving over the next decade?

Kevin Our vision for the future involves further digitalisation and automation, streamlining operations to deliver an even more efficient experience. By

leveraging modern tools and AI, we can alleviate mundane tasks and empower our team to focus on creative, strategic initiatives while maintaining and increasing personal communication with our clients.

Mark Jr. Strategically, we are looking beyond Malta's shores, with plans to expand into more European countries and the MENA region. The current investments and developments we have already mentioned will serve as a solid platform to enable us to achieve this vision. We cannot ignore the importance of maintaining our core values, which have been pivotal to our success over the past 40 years and should, therefore, continue to be a crucial part of our formula going forward.

Our entire team shares our vision and corporate values –Family, Loyalty, Credibility, Stability and Quality – implementing these within all aspects of our operation.

— Kevin Laferla

As Laferla Insurance Group celebrates 40 years of success, the second generation of the Laferla family continues to build on their father's legacy, innovating and expanding while upholding their core values and unwavering commitment to excellence.

From bricks to bonds

Real estate's influence on Maltese investments

Over recent years, local investors have been paying increased attention to the state of the Maltese real estate market. This heightened focus mainly centred on the following aspects: planning concerns, particularly relating to over-development and the quality and sustainability of our product; questions about oversupply, primarily in the office and hospitality sectors; and housing affordability issues.

It is no secret that real estate is at the heart of virtually every local investor, either directly through property ownership for commercialisation, leasing, development, and sale purposes or indirectly via financial instruments connected with the real estate sector.

In this respect, although it is relatively common practice for financial commentators and journalists to regularly report on the trends, statistics, and performance of the Maltese real estate market, there seems to be some disregard for how the sector features across the local capital market.

It is essential to provide a perspective on how central the real estate sector across the Maltese capital market is. Most of the 32 companies listed on the Regulated Main Market (official list) of the Malta Stock Exchange ("MSE") are in some way or another exposed to

the local real estate market, including the core domestic banks (namely, APS Bank p.l.c., Bank of Valletta p.l.c., HSBC Bank Malta p.l.c., and Lombard Bank Malta p.l.c.), which are hugely exposed to the real estate market through mortgages and commercial property loans.

However, twelve of these 32 companies can be categorised as directly related to the real estate sector. Six of these companies also have bonds listed on the Regulated Main Market (Official List) of the MSE. These comprise AX Real Estate p.l.c., Hili Properties p.l.c., Malta Properties Company p.l.c., MIDI p.l.c., Plaza Centres p.l.c., and International Hotel Investments p.l.c. ("IHI")—the company behind the Corinthia brand.

Although IHI is principally involved in the hospitality segment, in practice, it can be viewed as a real estate company when considering its sizeable asset base of hotel and commercial properties in Malta and internationally. Furthermore, unlike hotel operators, hotel property companies like IHI usually test pricing and valuation against metrics, standards, and methods typically applied within the real estate space.

Looking at the numbers

In aggregate, the property-related equity issuers have a market capitalisation of circa €840 million, representing around 18%

Table 1: Real estate companies listed on the MSE

AX Real Estate p.l.c.

Hili Properties p.l.c.

International Hotel Investments p.l.c.

Main Street Complex p.l.c.

Malita Investments p.l.c.

Malta Properties Company p.l.c.

MIDI p.l.c.

Plaza Centres p.l.c.

Santumas Shareholdings p.l.c.

Tigné Mall p.l.c.

Trident Estates p.l.c.

VBL p.l.c.

€309,313

€255,580

€1,768,336

€12,376

€292,998

€99,078

€254,742

€36,966

€12,759

€91,997

€103,982

€79,483

€134,179

€127,145

€613,274

€10,923

€196,963 3

€56,389

€99,320

€27,216

€11,880

€61,431

€60,775

€65,432

of the local equity market's total market capitalisation of €4.81 billion. However, nearly a third of the market capitalisation of these twelve equity issuers is in IHI, which has a market capitalisation of approximately €265 million.

AX Real Estate p.l.c. comes next with a market capitalisation of €132.78 million, while the remaining ten property-related companies have a market capitalisation of less than €100 million. These range from the mid-sized Malita Investments p.l.c. and Hili Properties (a subsidiary of Hili Ventures Limited), which have a market capitalisation of circa €96 million and €83 million respectively, to the smaller-sized companies such as VBL p.l.c. (€57 million), Tigné Mall p.l.c. (€47 million), and Main Street Complex p.l.c. (€7 million).

All twelve listed property-related companies operate in the commercial real estate segment except for MIDI p.l.c., whose activity mainly involves developing and selling real estate at Tigné Point and Manoel Island. Moreover, only IHI and Hili Properties have exposure to overseas real estate. Hili Properties has an interesting mix of properties, including office space, McDonald's restaurants, shopping centres, a hospital, and industrial property.

Challenging times for the equity market Unfortunately, the fortunes of the Maltese →

€132,779

€83,386

€264,745

€6,630

€95,775

€32,419

€46,259

€16,060

€8,777

€46,812

€52,500

€56,813

[1] As at 31 December 2023, except for AX Real Estate p.l.c. (30 April 2024), Santumas Shareholdings p.l.c. (31 October 2023), and Trident Estate p.l.c. (31 January 2024).

[2] As at 28 June 2024.

[3] Includes the proceeds of almost €30 million from the rights issue which took place in H1 2024.

equity market waned considerably in recent years, as reflected by the marked contraction in trading volumes and the broad downturn in share prices. This situation is currently at the top of the MSE's agenda, which, together with various market players and stakeholders, examines six strategic initiatives to improve market liquidity and investor experience.

These plans aim to reduce trading costs, enhance company relations and investor research, and promote market activity through share buybacks, executive share compensation, and the introduction of 'Liquidity Providers'.

Despite the continuous buoyant performance of the real estate market in general, nearly all share prices of the local property-related equity issuers are at a steep discount to their respective book values per share. The average price-to-book value of the nine propertyrelated issuers listed on the MSE at the end of 2019 stood at 1.08 times. In contrast, this was at 0.67 times the end of June 2024 for the twelve property-related listed companies, which essentially means that the market is giving a one-third haircut to the valuation of these companies.

Although the downbeat sentiment across local shares might be more linked to the market per se rather than specifically attributable to the companies, there are still various avenues that companies might consider to create shareholder value.

Despite the buoyant market, nearly all share prices of local propertyrelated equity issuers are at a steep discount to their book values.

One of these could be the possibility of consolidation through merger and acquisition ("M&A"), especially among the companies that own just a single building, as this type of activity is often regarded as one of the main drivers for any company to consider an

equity listing apart from other benefits such as those related to corporate governance and transparency as well as increased visibility and prestige.

A case in point is the acquisition by Hili Ventures Limited of more than 33% of the share capital of Tigné Mall p.l.c. that took place over the past eight months, which was indeed a rare moment of quasi-M&A activity across the local capital market.

Looking at the bond market

Meanwhile, investor sentiment and participation are more upbeat in the local corporate bond market. Apart from the six companies that are both equity and bond issuers, approximately 30 other bond issuers (out of 71 companies) are heavily involved in the real estate sector.

Within this pool, the diversification aspect is also a bit wider compared to the equity market, as apart from the accommodation, lease, and development companies, there are other companies which, for instance, are involved in the supply of building and finishing materials.

Furthermore, in terms of total bond issuance, the real estate sector, in its broadest perspective, accounts for circa 55% (or €1.45 billion) of the local corporate bond market (€2.62 billion), which is indeed significant. As of the end of 2019, the size of the local corporate bond market stood at €1.82 billion, of which €1.01 billion (or circa 55%) comprised issuers closely related to the real estate sector.

A call for a new era

The real estate sector has undoubtedly been essential for the growth of the Maltese economy over the years. Part of this success has naturally been due to the local capital market, which serves as a fundraising and investment platform and an essential source

It is widely recognised today that the country needs to embark on the next evolution of quality and sustainability.

of information for market participants.

Despite this track record, it is widely recognised today that the country needs to embark on the next evolution of quality and sustainability, both from an economic viewpoint and in terms of environmental consciousness.

In this respect, the interplay between the real estate sector and the capital market should be leveraged further to mobilise the necessary resources for Malta to improve its attractiveness and competitiveness, which are

essential for further economic development and success.

This article was written by Josef Cutajar, financial analyst at M.Z. Investment Services Limited, and Justin Mizzi, real estate valuer at Archi+ Limited. The authors have obtained the information contained in this article from sources believed to be reliable and have not independently verified the information contained herein. The article's contents are the authors' views and may not reflect the other opinions of the organisations. The article is being published solely for information purposes.

It should not be construed as investment, legal, or tax advice or as a recommendation to buy, sell, or hold any security, investment strategy or market sector. Any financial instruments referred to in this article may not be suitable or appropriate for every investor. Prospective investors are urged to consult their Investment Adviser before investing. Past performance is no guarantee of future results, and the value of investments may go down as well as up. MZI and Archi+ accept no responsibility or liability for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this article.

The importance of Public-Private Partnerships (PPPs) and outreach efforts in anti-money laundering and counter-funding terrorism (AML and CFT) knowledge sharing

In recent years, PPPs have become crucial because they foster strong public-private relationships, leading to better outcomes. The Financial Intelligence Analysis Unit (FIAU) has increased its presence through various training sessions, outreach initiatives, active participation in external events, and lecturing at the University of Malta. Effective PPPs and constant outreach are vital in combating money laundering (ML) and the funding of terrorism (FT), as the prevention and detection of potential ML and FT rely heavily on the private sector's implementation of effective AML and CFT programs.

Training & Outreach 2024 (until 20.06)

The objective and purpose of the PPPs and outreach initiatives that the FIAU engages in, is to ensure that our subject persons are aware of and understand the types and levels of ML and FT risks they may be exposed to, and in what manner. They must mitigate these risks by properly implementing risk-based controls and measures to ensure that criminals do not abuse and exploit their legitimate business.

It is equally critical that subject persons understand and abide by their obligation to promptly alert the FIAU of any known or suspected illicit transactions or activity.

AML and CFT Joint Committee

its ongoing work, planned projects, and other important developments locally and abroad. It also offers the space to discuss common concerns and provide suggestions to support Malta's joint fight against ML and FT.

During one-to-one meetings with single or select sectorial representative bodies, the same topics and aspects are discussed as in the full composition meetings.

Established in late 2021, these clinics provide a forum for credit institutions’ Money 6 7 28 88 2160 3800 training events organised by the FIAU training events organised by the FIAU total attendees

This PPP includes over 30 representatives from subject persons and authorities involved in combating ML and FT. Established in 2003, the Joint Committee now holds sectorfocused one-to-one meetings throughout the year and an annual full-composition meeting. During full-composition meetings, the FIAU updates and informs participants of

However, the FIAU also invites these sectorial representatives to present issues their sector faces and offer their comments and suggestions regarding various AML and CFT matters. The Joint Committee is also a forum for the FIAU to receive feedback during consultation exercises relating to any proposed legal amendments, implementing procedures, and certain guidance documents.

AML and CFT Clinics

Laundering Reporting Officers (MLROs) to meet the Unit and obtain assistance in adhering to their AML and CFT obligations. This PPP's main objectives include sharing banks' specific difficulties and dilemmas with the FIAU, to which the FIAU, as Malta's sole AML and CFT supervisor, provides the regulator's perspective and expectations on such issues. The PPP also creates a space for sharing knowledge and experiences and healthy discussions among representatives of credit institutions who attend the meetings.

As of this year, the FIAU has further polished this initiative by extending the invitation to bank senior officials, specifically to those entrusted with the business arm or customer on-boarding. This development ensures better alignment and a more consistent approach, not only when setting the AML and CFT measures, but equally important regarding the risk-based application of those measures in their day-to-day banking operations.

A further development introduced this year was that during some sessions, the FIAU presented a specific topic for discussion, inviting other competent authorities to play a role in the fight against ML and FT. This allows the banking officials to ask questions and hold meetings with a broader input. This approach consolidates the Unit's

commitment to bridging the gap between the banking sector and the FIAU and with other national competent authorities that, in some way or another, also have a role in the broader fight against ML and FT in Malta.

AML and CFT Consultants Forum

Set up in 2019, this forum informally brings together FIAU representatives and a select number of persons and entities that provide AML and CFT consultancy or advisory services to subject persons.

The aim is twofold. First, it allows consultants to voice their clients' everyday concerns, discuss between themselves and the regulator, and try to find solutions to the issues or dilemmas. Secondly, it provides an opportunity for the FIAU to update consultants as necessary on local and international developments in the AML and CFT sphere, as they are uniquely placed between the subject persons and the regulator. Therefore, they are in an optimum position to relay information to a broader audience. Consultants play a crucial role in transmitting the regulator's message to their clients and bridge the gap that at times may exist between the FIAU and subject persons.

Financial Intelligence Reporting Partnership

The Financial Intelligence Reporting Partnership, or FINREP, is a more recently

implemented initiative within the FIAU's public-private partnership programme. It was established in 2019, and the first meeting with several banks was held at the unit's offices. FINREP's primary mission is to create a platform for subject persons and the FIAU to openly discuss and identify new money laundering or terrorism financing trends and typologies and conduct joint analysis projects to proactively identify suspicious transactions or activity.

FINREP also seeks to harness and use the vast experience of seasoned AML and CFT subject persons and propose innovative solutions to improve Malta's capacity to combat money laundering and the funding of terrorism.

The FIAU remains committed to improving PPPs and establishing new initiatives. This recognises the importance of collaboration to safeguard Malta's financial system, other economic sectors, and the community from ML/FT, and other serious crimes. Working together, we can overcome challenges more efficiently and produce better results. This is ultimately underpinned by the FIAU's Strategy 2023 - 2026, where subject persons are clearly identified as integral partners and stakeholders in the fight against ML/FT.

Public Private Partnerships 2024 (until 25.06) 2023

4 5 3 7 1 3

AML/CFT Clinics

AML/CFT Joint Committee One-to-one's

AML/CFT Clinics

AML/CFT Joint Committee One-to-one's

AML/CFT Joint Committee Full-composition

AML/CFT Consultants Forum

Between the grey and the white

It's been longer since we've been taken off the Financial Action Task Force grey list than the time we've spent on it. The trauma has not passed. The fear of being sent back to solitary will probably never go away.

The experience changed the nation in some ways. The way smaller intermediaries and professionals started to be supervised after we got on the grey list has forced many of them out of that line of work. Smaller businesses or self-employed professionals simply cannot afford the time and money they need to spend on the administrative infrastructure to prove—not that they did not help customers launder money—but rather that they are set up to prevent a customer from laundering money even if they wanted to.

For many of these people, small-time financial services had become a chunk of their income. It was not enough to cover the costs required to provide the services properly, nor was it enough to cover the risk of hefty fines they would need to pay after a meticulous inspection revealed missing paperwork.

You know, that's fine. When we started insisting that butchers must chill their meat unless they're selling it immediately, some small-time butchers had to change profession because they could not afford to have shops. Sad for them. Better for us to keep salmonella at bay.

It's not all fine, though. Regulation and oversight have some unsavoury consequences, which are so burdensome, intrusive, and risky that some things are just not worth doing anymore. Setting up a voluntary organisation has become a veritable nightmare. Professionals have taken themselves out of the business of drawing statutes and registering new NGOs in full compliance with the law. Setting up foundations has become harder than building rockets.

You can see why. The legal vehicle of "NGO" has been systemically abused, particularly by non-residents, to set up complicated legal structures not intended for the betterment of society and the protection of the vulnerable

but to help tax dodgers do their thing. Reducing the options for the tax dodgers, the money launderers, the drug lords, and the arms traffickers, is devoutly to be wished. We haven't yet entirely found a way of not closing the door on genuine charities, though.

A new charity will sweat blood just to get a bank account. There's no regard to how small it is and how little the money it expects to handle. The scrutiny that is designed to prevent cocaine millions from sleeping snugly at a high street branch is unleashed on the most minor association. Or the smallest business, for that matter. It remains brutal and, for some, virtually impossible to access the simple and necessary service of a checking account.

It's not just about the small and perfectly innocent, though. Post-greylisting, the FIAU put its boxing gloves on and slapped substantial fines on operators who failed to comply with the rules. In the last available annual report of the FIAU (2022, halfway through which year we graduated out of →

greylisting), nearly €3 million in administrative penalties were handed down.

The same report, however, demonstrates an opposite trend. Decisions by the FIAU were challenged 24 times. In 18 of those cases, the penalties handed down by the agency were reduced or revoked altogether. From nearly €5 million in fines, just over €4 million were cancelled.

The problematic fines are the big ones. Indeed, most fines handed down by the FIAU are paid without much fuss. Of 579 fines imposed, only 61 were appealed: that's about 11%. However, those 11% of the fines amount to 74% of the value of the fines issued.

I remind you, these are 2022 figures. Anecdotally, we know from court reports that the problem has not gone away. The courts disagree with the FIAU that a fine of several hundreds of thousands of euros can be timidly termed an "administrative penalty". Instead, the courts think being fined money is like being sent to prison. It is a criminal punishment. Faceless bureaucrats cannot hand down criminal punishments. Many of us would be in prison if it worked that way. Instead, prosecutors must prove their case in front of an independent court while the accused get the opportunity to defend themselves. That's not what happens with FIAU fines. There's no – let's call it – due process. It's a problem we haven't solved. And at this rate, contempt for

the process is setting in. The FIAU hands down a six-figure fine that makes the headlines, but we know it to be purely symbolic because we know the courts will quash it from the outset.

As a result, lawbreakers have a guaranteed (and low) cap on their possible liability when caught doing the wrong thing. That's contempt. However, the FIAU, in turn, shows contempt for the court's rulings as well. Not a good look.

There has been an interesting development in this space. The FIAU is not just challenging service providers and professionals. Prosecutors also pursue them in criminal court together with their clients, whom prosecutors believe to have committed acts of fraud and money laundering.

Consider the Vitals case brought against Joseph Muscat, many of his colleagues, and Vitals and Steward officials who have allegedly bribed him. Interestingly, the lawyers, accountants, and auditors who handled the money were also in the dock. The case is ongoing, and all concerned deny any wrongdoing. However, the professions in which they work are watching this closely.

Rewind to before the Vitals case started. The data on enforcement we have is from 2022. That year, we saw record-breaking reporting, prosecution, and fines. It was the year we

The determination and competence of the police to investigate money laundering remains questionable.

Lawbreakers have a guaranteed (and low) cap on their possible liability when caught doing the wrong thing.

needed to convince the FATF to get us off the greylist. It worked.

What has happened since? Have we kept up the momentum? The 2023 annual report of the FIAU is due later this year. It should answer questions about numbers. Less so, questions about the quality of the action taken. Are we chasing money laundering in the right places? Are we clamping down on corruption and organised crime? Is this working?

Consider assets recovered from crime. The last available data from the Asset Recovery Bureau is also from 2022. That was a record year for the value of assets seized or frozen: €51.5 million compared with just €1.2 million two years earlier. Look closely at that number, though. It's pathetically small. It does not distinguish between assets that are temporarily seized pending conviction and the assets that are irrevocably confiscated after it. There's good reason to believe a good chunk is temporary.

Since that 2022 report, the law on asset freezes has been changed, radically reducing the scope of seizures. The Vitals case is challenging the seizures ordered on the assets of the accused, leveraging the doubts left by the new law. Defendants argue that the new law forces prosecutors to prove that the assets they ask to hold have come from the

crimes they are alleging. That's going to be complicated.

Though our greylisting trauma has changed some things, some things have remained the same. The determination and the competence of the police to investigate money laundering remains questionable, especially if there's a chance that the corruption of politicians is involved. Then they just won't touch it. The quality of prosecution is also in doubt. There are, of course, competent staff at the Attorney General's office. However, they lack experience and resources, and the loyalty of the chief prosecutor to the fight against crime is, at best, hazy.

Judicial resources are also poor. Judges are stretched and overworked and spread across varied tasks. Trials are left pending for years, more than 10 in many cases. The officially watertight preservation of evidence is full of holes. Over and above that, in crimes involving politicians, judicial independence is under constant attack by the intrusion of executive overreach, if not blanket intimidation.

Knowing this present and how similar it is in many ways to that distant past before greylisting, what is the future for our financial services industry? How long can we pass these weaknesses as the purity of the whiteness of our enforcement?

Women in finance

From barriers to boardrooms

The disparity between the mainstream genders has been a muchtalked-about and often heated debate for years, and we're nowhere near seeing the end of it.

The discord that comes along with gender inequality is based on several factors, a key one being financial freedom and access to finance. While women may be the ones holding their purses, it is often the men who are holding the purse strings, having the final say on how and where money should be spent—typically because they're the ones earning it.

This scene does not only play out during the younger years when wealth is still being accumulated. According to the OECD, women receive 26% less income from the pension system than men, meaning that they are always playing catch-up and often find themselves at the mercy of their male counterparts, who, thanks to their professional experiences and opportunities, typically have more acute financial knowledge and literacy.

Nevertheless, the situation need not be one of doom and gloom, as there may be light of progress on the horizon. The World Economic Forum stated that "women have the power to fundamentally reshape the financial services and investment landscape, as both investors and from within key financial institutions."

With this in mind, I asked three women who are all linked to the world of finance and economics about their experiences, opinions, and thoughts about the developing role of women in the finance industry. I wanted to speak to people with distinct roles and different experiences, thus opting for a business and academic viewpoint to garner a holistic view of the situation.

You'll be reading two viewpoints: the industry viewpoint, where we hear from Sarah Curmi, Audit and Assurance business leader at Deloitte Malta, and Maria Cauchi Delia, chief executive officer at the Malta Institute of Accountants, about their experiences in the corporate world, and the academic viewpoint, where Prof. Rose Marie Azzopardi, associate professor of economics (FEMA) at the University of Malta lets us know her views from the perspective of an academic.

The Industry Viewpoint

Can you share your journey in the finance industry and the key challenges you faced while breaking barriers to reach your current leadership position?

Sarah Curmi My career began at age 18, when I joined Deloitte, then known as Manduca, Mercieca, as an audit junior. I worked as an auditor within the firm, gaining a wealth of experience over the years as I was exposed to several different entities and sectors while working my way up the organisation. I was promoted to partner in 2008 when the finance industry was male-dominated. I was the firm's first female partner, which then had fifteen partners. As a partner, I have had several leadership roles and contributed to various areas across the organisation, which has allowed me to develop broad leadership and management skills. This experience

continued to foster my business skills and ability to understand an organisation and its people more holistically and evolve my strategic thinking.

The development and harnessing of these skills allowed me to achieve success and recognition in my career when the industry and organisation were male-dominated.

Maria Cauchi Delia Throughout my career, I have held various roles in the private and public sectors in Malta and abroad. Each little step has contributed to my growth and development and ultimately led me to where I am today.

While I consider myself fortunate not to have experienced genderrelated discrimination in my professional life, each step has brought its own unique challenges, but this is a natural part of the journey towards leadership, and I have never been deterred by the obstacles that occasionally arise. Instead, I have always faced them head-on, determined to achieve my goals.

My experience includes practising my profession at a Big Four firm, at the National Audit Office, and as a sole practitioner. Every career move exposed me to different realities that contributed to my growth and acquiring new skills, which I am honoured to utilise today in leading the Malta Institute of Accountants. I am very proud of what has been achieved during almost a decade of my leadership. The MIA already had a strong name as the voice of the profession. Still, I am proud to have led a significant transformation, both in terms of internal growth and increased membership, but also as an important, trusted and respected stakeholder with a seat at the table in discussions on matters of national importance.

As a leader in finance, how do you use your position to influence company culture and promote diversity and inclusion within your organisation?

Sarah Curmi Diversity and inclusion are significant focus areas within our firm, and we seek to ensure they are actively promoted in all we do. As a leader within the organisation, I ensure this is reflected in my actions daily by providing equal opportunities to individuals based on capability and potential, as evidenced by performance.

I try to encourage people within the firm to focus on self-development and their continued growth, both as individuals and within the organisation. I also offer support to other female co-workers who may be dealing with competing priorities in and out of the workplace.

Maria Cauchi Delia I see myself as a leader and a team member within the organisation, dedicated to driving our ambitions forward. While I strive to lead and inspire, I also recognise that our growth and success depend on the collective efforts of the entire team. However, for this to work, a key element of strategic leadership is placing individuals in roles where they excel and empowering them with responsibilities that enhance their strengths.

I seek to set clear expectations and goals around these values, ensuring they are integral to our strategic vision. Leading by example, →

I demonstrate inclusive behaviour in all my interactions and decisions, which sets the tone for the entire organisation and the stakeholders we interact with. Still, at the end of the day, you must make the crucial decisions to ensure their effective implementation. Ultimately, the buck stops with you.

My current role provides the perfect platform to hone my inclination for driving positive change. Our profession is undergoing profound changes, with a stream of new legislation and regulation and the necessity to embrace realities associated with digitalisation and sustainability. This challenge provides an opportunity to improve staff inclusion. I seek to empower members of the MIA team to appreciate the opportunity in front of them: this is not just a job – it is an opportunity to lead and to drive meaningful change throughout the profession we represent and the wider industry, with an impact that extends beyond our organisation.

In what ways have you seen the finance industry evolve in terms of gender diversity during your career, and what further changes do you believe are necessary?

Sarah Curmi Over the past 30 years of my career, there has been an increase in the number of women in leadership positions in the financial sector. There has been a shift due to increasing financial demands as the standard and cost of living increased, coupled with cultural changes such as the normalisation of working mothers. Nevertheless, there is still quite an imbalance between genders in top management and board positions in most companies in the local market. There is currently a drive to change this, aligned with the EU's Gender Equality Strategy, which seeks to make significant progress by 2025 towards a genderequal Europe. Regulations will be implemented to promote more women in these senior positions by creating equal opportunities for all to achieve gender balance in decision-making. Locally, the opportunities for schooling and access to higher education are largely available to all. However, we do need to improve support mechanisms for families that would allow both men and women the opportunity to progress in their careers while building a family.

Maria Cauchi Delia There has been a noticeable increase in women entering finance roles and taking on leadership positions. I recently

came across NSO data showing that almost a quarter of all CEOs, senior officials, and legislators are now women. While there is still a long way to go, there is some progress.

Companies increasingly recognise the value of diverse teams and are implementing policies to support gender equality, such as flexible working arrangements, mentorship programmes, and diversity training. I am glad to see many more women taking up CEO, CFO, or other roles as board directors.

However, there is still much work to be done. To further advance gender diversity, it's crucial to address unconscious biases in hiring and promotion processes. Companies should focus on creating a more inclusive culture where women feel valued and supported. This includes offering more opportunities for career development, such as leadership training specifically designed for women and ensuring equal pay for equal work. I am enormously proud to lead a team at the Malta Institute of Accountants, where a strong female presence leads our daily activities despite a challenging environment and the technical nature of educational requirements.

While I believe that different genders can work out a new balance together, you sometimes need legislation to break barriers. According to EU data, women hold less than 18% of board positions in Malta's largest

As women, we may feel we must choose between a career and a family life. What is critical is balancing time where professional and personal cycles overlap in terms of demands. — Sarah Curmi

To young women aspiring to careers and leadership roles in finance, my advice

is to cultivate both technical and transversal skills.

— Maria Cauchi Delia

listed companies—nearly half the continental average. In this context, I look forward to the implementation of the Women on Boards directive that will apply to certain listed companies. However, its impact will be limited locally unless other companies adopt the spirit of the directive and ensure gender diversity on their boards. This is fundamental, not simply to ensure equality, but because women can offer a different perspective to help a company or an organisation grow.

How do you see technological advancements, such as fintech and AI, impacting opportunities for women in finance? Are there specific areas where women can leverage these advancements to lead and innovate?

Sarah Curmi Through the increased use of fintech and AI technologies, we have access to more information and data that relieves people from having to do mundane tasks and allows them to focus on more value-added activities. These technological advancements bring about huge opportunities for growth through a combination of technology and people skills. People may need to upskill or re-skill; however, I view this as an opportunity for further growth. Though the tech sector is still heavily dominated by men, women are slowly entering this segment. I believe this will continue to grow in the future because of the sheer mix of males and females in the total workforce.

Maria Cauchi Delia Technological advancements are poised to significantly enhance opportunities for women in finance. These technologies break down traditional barriers, offering more accessible entry points and flexible career paths. Fintech, for instance, democratises financial services, enabling women to start businesses or access markets that were previously out of reach. AI, emphasising data and analytics, levels the playing field by reducing biases in hiring and promotion processes, allowing women to advance based on merit.

Moreover, women bring unique perspectives that can drive innovation in customer-centric fintech solutions and ethical AI development. By embracing these technologies, women can enhance their careers and contribute to shaping a more equitable and diverse financial landscape.

The key is to actively seek out these opportunities and continue advocating for systemic changes that support women's advancement in the tech-driven finance sector.

What role has mentorship played in your career? How do you

actively support and mentor other women aspiring to enter and succeed in the finance industry?

Sarah Curmi I was fortunate enough to have worked closely with several inspiring leaders within our organisation over the years. I worked alongside one partner for many years, and under his guidance, I developed the foundational capabilities of leadership skills. Throughout my career, I have mentored many individuals, including many women, some of whom are now partners within the firm. My journey and experience as a mother of three daughters and having a very demanding career have made me very relatable to other women within the organisation. Sharing this experience with my female co-workers motivates them, as it shows how success in this sector is attainable while maintaining a family.

Maria Cauchi Delia Mentorship is fundamental in a professional career. The field of accountancy is vast – from ESG to taxation, from audit to consultancy. A mentor can help you understand what you want to do. Having a mentor goes beyond simply setting and achieving goals; it involves having someone in your corner who offers valuable feedback, encouragement, and support to foster your growth professionally and personally.

Having had mentors who believed in my potential, I understand their profound impact on my development and success. I actively engage in formal and informal mentoring relationships to support and mentor other women aspiring to enter and thrive in finance. My door is always open to offer advice on career progression, share insights from my experiences, and help people address industry-specific challenges. I am always pleased to see younger professionals build confidence, set and achieve their goals, and ultimately succeed in the finance industry.

What advice would you give to young women looking to pursue a career in finance and aspire to leadership roles? What essential qualities or skills should they focus on developing?

Sarah Curmi As women, we may feel that we need to choose between a career and a family life. Both family life and a professional career work within cycles of varying demands. What is critical is balancing time, where the professional and personal career cycles overlap in terms of demands. This must be managed by discussing with an individual's employer or partners, who increasingly recognise the importance of retaining key organisational talent. A strong support structure at →

home is also crucial to managing a professional career and a young family at the same time.

A strong leader must be a good motivator, a problem solver and, above all, a person who can inspire their team through their daily actions. You also need a good dose of resilience and mental stamina to navigate the corporate worl

Maria Cauchi Delia To young women aspiring to careers and leadership roles in finance, my advice is to cultivate both technical and transversal skills. In terms of the former, we see more girls opting for finance subjects, so I think we broke all the glass ceilings there. However, transversal skills like leadership, communication, and resilience are equally important. Articulating your ideas clearly and persuasively is vital, as is the ability to lead and inspire teams. Networking is also crucial; connect with mentors and peers who can offer guidance and support.

Focus on developing confidence, believe in your abilities, and don't shy away from taking risks or voicing your ideas. Adaptability is essential as the finance sector is rapidly evolving, so stay flexible and open to learning new methodologies. Integrity is crucial; uphold strong ethical standards and build trust with colleagues and clients. Resilience will help you overcome setbacks and persistently pursue your goals.

Last but not least, seek continuous learning opportunities. Whether through formal education, certifications, or on-the-job experiences, staying informed about industry trends and advancements can position you as a knowledgeable and forward-thinking leader.

The Academic Angle

I find that an academic viewpoint can be quite eye-opening and is perhaps not sought as often as one would like; however, most Maltese professionals have gone through a similar educational system. Therefore, one must ask those responsible for these professionals' academic development what they have experienced over the years and what they make of the changing industry landscape. Prof. Rose Marie Azzopardi, Associate Professor of Economics within the Faculty of Economics, Management & Accountancy at the University of Malta, shares her thoughts.

What specific challenges have you faced as a woman in academia within economics, and how have you navigated these obstacles?

I started my career at the University of Malta over 20 years ago. I was the first female lecturer in Economics within the Faculty of Economics, Management and Accountancy and the first female full-time lecturer. I sat on the Faculty Board representing the department, and there was mutual respect from my colleagues. The university, similar to other entities, has policies in place regarding gender equality and sexual harassment. Still, international research shows that discrimination within universities tends to be more subtle and complex to prove. The university is just another working environment where human nature, in all its positive and negative aspects, can take over.

There are always obstacles in life; in the end, you can only depend on yourself, on the people who love and support you, and on what you can do to overcome those hurdles. I focused on research and academic projects and became the first female Associate Professor in Economics at the University of Malta. There are three full-time female academics in the Economics Department, and we have more female students, so I hope we are ambassadors for female economists.

How does gender diversity among researchers influence the topics studied and the perspectives brought to economic research?

There are more female students at the University of Malta, which has been the case since the mid-1990s. Female graduates accounted for over 60% of all graduates in the last academic year. The fact that this trend is not reflected in the top echelons of the economy is indicative of powerful forces that keep the 'old boys' clubs and networks strong. This also results in segregation in certain professions.

Although nowadays, the number of female lecturers and professors has increased, this has minimally affected females' choice of profession. This reflects the educational system at a lower level, the guidance students are provided with when choosing their areas of study, and

sometimes also the pressure from families and friends. However, several campaigns encourage females in STEM subjects, which must be accompanied by 'evidence' of females in top positions in such areas within the economy. But if people only see men in CEOs' musical chairs,

feel it is a new area they can delve into. I think that women and men have the same potential to leverage the opportunities offered by AI. Yet, somehow, how AI is presented to students will likely lead to another area dominated by men. This is already happening in other countries. Therefore, we must project that women can be leaders in AI areas, not merely support staff. The media has a role to play in this respect.

Do you believe female graduates are frequently overlooked for higher-level positions in economics?

The simple and short answer is yes. You only need to look at the economy to see that women do not hold prominent economic positions. You will find some women on the mid-range management scales, but men generally occupy the very high levels. This is across the whole economy. If, for the past 28 years, we have had more female graduates than males, is this reflected in the hierarchy of the job market? I do not think so. I also believe that there are still societal pressures that put the onus of caring for the family on females, and this is evident from data that shows that it is more likely to be women who opt for flexible hours, part-time work, reduced hours, career breaks and other family-friendly

I do not believe in giving women extra attention. That works against women, as they are seen as weaker and needing special attention.

— Prof. Rose Marie Azzopardi

their expectations from a career become limited, and they choose professions that provide them with, for example, a better life-work balance, shift work, or the same holidays as children. (The term worklife balance is incorrect as it focuses primarily on work rather than life.)

The economy loses talent and potential when it ignores valid people, whether women or men. This is then reflected in labour productivity. I believe the topics chosen by our students for economic research are varied and relate to every day financial issues, and I do not think they are conditioned by gender.

How do you see technological advancements, such as fintech and Artificial Intelligence (AI), impacting opportunities for women in economics? Are there specific areas where women can leverage these advancements to lead and innovate?

AI will continue to change how the labour market operates, and many jobs will be altered. All jobs will be affected somehow; some will become obsolete, and others will require new skills. AI does not distinguish between sexes, but how AI is embraced and accepted depends on the worker's personality. Some may feel threatened by AI, while others may

measures, which are female-friendly measures.

How do you approach mentoring female students and junior academics in economics, and what initiatives do you believe are essential to support their growth and development?

I do not like distinguishing between females and males in studies, academia, or any job. I think the value of a person is not in their gender but in what that person's potential is. I do not believe in giving women extra attention. That works against women, as they are seen as weaker and needing special attention. That is why I do not believe in quotas, for example. Such systems backfire and present women as unable to compete. Quotas are a disservice to genuine women. Economics is about competition, and what women need is not a cushy way forward but a level playing field where they are treated as equals, fairly and justly. Women can compete if the rules of the game are equal for men and women alike. At the moment, those rules are not the same. Men continue to hold the majority of top positions, not because they are smarter or more capable (although the top grades on various exams and the graduate percentage suggest otherwise), but because men prefer to put men in those positions.

IS SUMM STARTS & DS

Revolutionising electronic banking

The 50-year journey of card business and e-banking at BOV

The card business and e-banking have revolutionised the financial sector, bringing unparalleled convenience and accessibility to clients. At Bank of Valletta (BOV), these advancements have been pivotal, marking significant milestones in the bank's history and the local market. To delve deeper into this evolution, we sat down with Chris Degabriele, Head of e-banking at Bank of Valletta.

Chris, could you share the cards and electronic banking history at BOV?

Bank of Valletta has always been a trailblazer in this sector. Our journey began in earnest by the end of the 1980s and early 1990s, when we started shaping the local card business landscape and introduced electronic services.

By the late 1980s, BOV had installed Malta's first ATM. In the early 1990s, we launched the first EPOS machine in Malta, initially accepting only magnetic stripe cards. Our partnership with VISA and Mastercard enabled us to issue these international cards alongside our proprietary CashlinkMALTA brand, which remains strong in the local market.

Could you highlight some milestones in BOV's card business evolution?

Certainly. Over the years, BOV has consistently led the market in card Issuance and Acquiring. By 2008, we transitioned from magnetic stripe to Chip and PIN, duly upgrading ePOS terminals to support Chip and PIN technology to enhance transaction security. In 2010, we introduced portable POS terminals, offering greater flexibility to merchants.

Then, in 2015, we began rolling out Tap and Pay contactless technology. We upgraded all BOV POS machines to accept contactless cards, making transactions quicker and more convenient. Introducing unattended POS terminals, such as those in petrol stations and car parks, further advanced our services.

A notable milestone was the installation of unattended POS terminals on Malta's public buses in 2021, enabling over 450 buses to accept card payments. These BOV terminals have significantly improved payment convenience for public transport users.

How has the bank evolved in card issuance?

BOV's evolution in card issuance has been just as dynamic and goes hand in hand with the developments in the acquiring business. We started with magnetic stripe cards and, by 2009, transitioned to Chip and PIN cards. BOV was the first institution in Malta to fully switch to contactless cards.

One of our proudest achievements was the introduction of e-wallets, allowing customers to upload their cards onto their phones via Apple Pay and Google Pay. Additionally, we support wearables like Apple watches, Garmin, and Fitbit Pay. These innovations have made contactless transactions increasingly popular.

In 2019, we upgraded our proprietary CashlinkMALTA cards to Chip and PIN and contactless, aligning them with VISA and Mastercard security standards.

Can you discuss the development of BOV's e-banking services?

The story of our e-banking services began in the late 1990s with Bank 2000 for business customers and Visual Link for personal customers. Recognising the need to evolve,

we launched the BOV 24X7 Service in 2002, which combined Internet banking and our Customer Service Centre. This was revolutionary at the time.

In 2012, with the rise of smartphones, we introduced mobile banking, allowing customers to perform banking services on their phones. We continuously added functionalities, including mobile-to-mobile payments, within the app, making it a popular feature among users.

What's next for BOV in the realm of e-banking and card services?

We always look forward to further innovations. One of our latest developments is BOV mobilePOS, which turns Android smartphones into POS terminals without additional hardware. This simplifies card payment acceptance, significantly benefitting the sole retailer and small and medium-sized businesses.

The bank's journey in card business and e-banking is a testament to our commitment to innovation and an enhanced customer experience. From the first ATMs to the latest mobile payment technology, we continue to lead and shape the market.

Issued by Bank of Valletta p.l.c., a public limited company regulated by the MFSA and is licensed to carry out the business of banking in terms of the Banking Act (Cap. 371 of the Laws of Malta).

Unlocking the potential of open banking in Malta

Lessons from the UK and the road ahead

The advent of open banking has been nothing short of revolutionary for the financial sector worldwide, with the United Kingdom emerging as a beacon of successful implementation. By fostering innovation, enhancing efficiency, and expanding consumer choice, open banking, supported by regulatory frameworks like the European Union's Payment Services Directive (PSD2) and the upcoming PSD3, promises to transform the financial landscape. However, despite these global advancements, Malta has yet to fully seize this opportunity.

The UK has been a trailblazer in the realm of open banking. Launched in January 2018, the UK's open banking initiative mandated nine of the largest banks to open their data to third-party providers (TPPs) securely. This initiative has led to a burgeoning ecosystem of fintech innovations, creating more competitive and customercentric financial services.

The UK has been a trailblazer in the realm of open banking...

By 2023, over 4 million consumers and businesses in the UK were using open banking services.

By 2023, over 4 million consumers and businesses in the UK were using open banking services, leveraging benefits such as more accessible access to credit, better financial management tools, and streamlined payment processes. The UK's proactive regulatory environment, characterised by creating the Open Banking Implementation Entity (OBIE), played a critical role in this success. The OBIE was tasked with developing the technical standards and ensuring compliance among participating institutions, thus providing a clear, unified framework that facilitated rapid adoption and innovation.

The lost opportunity in Malta

Contrasting sharply with the UK's experience, Malta has yet to fully embrace the potential of open banking. While Maltese financial institutions technically comply with PSD2, adoption and innovation levels remain significantly lower. The lack of a comprehensive national payment strategy has left Malta behind its European counterparts, missing out on opportunities for economic growth and enhanced financial inclusion.

One of the core issues is the limited size of the Maltese market, which poses unique challenges. Smaller markets can often lead to market failures due to insufficient competition and investment. Without a robust and competitive environment, financial institutions may lack the incentive to innovate, and consumers may not reap the full benefits of open banking.

The need for a national payment strategy

Malta urgently needs to implement a national payment strategy to overcome these challenges. This strategy should create a conducive environment for open banking by addressing regulatory and infrastructural barriers. →

Founded in 2016, TrueLayer is the European account-to-account payment infrastructure provider offering APIs that enable businesses to connect with customers' bank accounts securely.

Key elements of this strategy should include:

1. Regulatory Support and Clarity:

The government must provide clear guidelines and support for implementing open banking. This includes not only compliance with PSD2 but also preparing for the upcoming PSD3, which aims to further enhance the open banking framework by addressing existing gaps and fostering more significant innovation.

2. Technical Infrastructure:

Developing robust technical infrastructure is essential for secure and efficient data sharing between banks and TPPs. This includes standardised APIs and strong cybersecurity measures to protect consumer data.

3. Consumer Awareness and Trust:

Efforts must be made to educate consumers about the benefits of open banking and ensure they trust the security and privacy of their data. Consumer trust is paramount for the widespread adoption of open banking services.

The Malta Financial Services Authority (MFSA) has been working to modernise and enhance the payments sector's regulatory framework. Recognising the rapid evolution of financial technologies, the MFSA has introduced several initiatives to foster innovation while ensuring robust oversight and consumer protection. One notable development is the implementation of a comprehensive fintech regulatory sandbox. This sandbox allows startups and established financial institutions to test innovative payment solutions in a controlled environment, providing valuable insights into regulatory needs and potential market impacts.

Open banking represents a transformative opportunity for Malta to enhance its financial sector, drive economic growth, and improve consumer outcomes.

In line with the MFSA's efforts, the Malta Financial Services Advisory Council has outlined a strategic vision for the future of payments in Malta. This strategy emphasises the importance of creating a dynamic and competitive payment ecosystem that leverages cutting-edge technologies such as blockchain and artificial intelligence. The Advisory Council's strategy enhances regulatory clarity and promotes cross-sector collaboration. By fostering partnerships between financial institutions, fintech startups, and technology providers, the Council aims to create a fertile ground for innovation and ensure Malta remains competitive in the global economic landscape.

The commitment to digital transformation and financial inclusion is central to the Advisory Council's strategy. The Council has highlighted the need for a robust digital infrastructure that supports seamless and secure payment transactions. This includes initiatives to upgrade payment systems, improve cybersecurity measures, and

Stripe Connect, a division of leading fintech Stripe, offers a seamless solution for businesses integrating payment systems into their platforms or marketplaces.

enhance data protection protocols. Moreover, the strategy underscores the importance of making digital financial services accessible to all segments of society, thereby promoting financial inclusion. The MFSA and the Advisory Council aim to create a resilient and inclusive payment ecosystem that benefits consumers, businesses, and the broader economy by addressing these critical areas.

The upcoming PSD3 directive presents a significant opportunity for Malta to leapfrog in the open banking space. PSD3 aims to address PSD2's shortcomings by providing more comprehensive guidelines on data sharing, enhancing security measures, and fostering a more inclusive financial ecosystem.

For Malta, leveraging PSD3 could mean implementing advanced regulatory technologies (RegTech) to streamline compliance processes and improve efficiency. By adopting RegTech solutions, Maltese financial institutions can reduce the costs and complexities associated with regulatory compliance, making it easier to innovate and offer new services. This can also enhance transparency and trust, encouraging more consumers to use open banking services.

Government needs to play a vital role

Given Malta's small market size and the risk of market failure, government intervention is critical to kick-start the open banking revolution.

The government can play a pivotal role by:

1. Establishing a Dedicated Open Banking Entity: Similar to the UK's OBIE, Malta could benefit from a dedicated entity responsible for overseeing the implementation of open banking, developing technical standards, and ensuring compliance among financial institutions.

2. Providing Financial Incentives: Offering grants or tax incentives to financial institutions and fintech startups can stimulate investment in open banking solutions. This can help overcome initial barriers to entry and foster a vibrant fintech ecosystem.

3. Encouraging Public-Private Partnerships: Collaborations between the government, financial institutions, and technology providers can accelerate the development and adoption of open banking services. These partnerships can facilitate knowledge sharing and innovation, ensuring Malta stays at the forefront of financial technology advancements.

4. Promoting Financial Inclusion: Government initiatives aimed at improving financial literacy and inclusion can ensure that the benefits of

open banking are accessible to all segments of the population. This can help bridge the digital divide and create a more inclusive financial system.

Open banking represents a transformative opportunity for Malta to enhance its financial sector, drive economic growth, and improve consumer outcomes. By learning from the UK's successful implementation and developing a comprehensive national payments strategy, Malta can unlock the full potential of open banking. Leveraging the upcoming PSD3 directive and ensuring proactive government intervention will be crucial in overcoming market limitations and fostering a competitive, innovative, and inclusive financial ecosystem. The time is ripe for Malta to embrace open banking and secure its place in the future of finance.

Token.io is a leading provider of account-to-account (A2A) payment infrastructure powered by open banking. The company offers leading connectivity solutions to over 80% of bank accounts across 20 European markets through a single API.

Open banking is a financial technology practice that enables third-party developers to build applications and services around financial institution data. It involves using open APIs (Application Programming Interfaces) to securely access financial data from banks and other financial institutions. This sharing of financial information can lead to new financial products, better financial management tools for consumers, and increased competition in the banking sector. Various companies use open banking; Revolut (banking) and PayPal (e-commerce) are the most notable.

BMW M4 CS

Race-bred for the road

The new BMW M4 CS is a special edition from BMW M GmbH, bridging race track experience and road performance.

A 6-cylinder, 405 kW/550 hp in-line engine powers this high-performance car with cutting-edge engineering and design. It features model-specific chassis tuning, an eight-speed M Steptronic transmission, and an M xDrive intelligent all-wheel drive system, enabling 0-100 km/h (62 mph) acceleration in just 3.4 seconds. The car's

7-minute, 21.989-second Nürburgring Nordschleife lap time emphasises its dynamic abilities.

Developed for motorsport, the 3.0-litre engine benefits from racing expertise, including a rigid crankcase, lightweight forged crankshaft, and advanced cooling and oil supply systems. This engine delivers a peak torque of 650 Nm (479 lb-ft) from 2,750 to 5,950 rpm and has a

maximum output at 6,250 rpm, reaching a 7,200 rpm red line. The M4 CS's exhaust system, featuring a titanium rear silencer, produces an evocative sound that is adjustable via the M setup menu.

The car's power is managed by an eight-speed M Steptronic transmission and distributed by the M xDrive system, which enhances traction and agility. The system offers various modes, including a rear-wheel-drive option for skilled drivers. The M4 CS's chassis has been precisely tuned with adaptive M suspension, M Servotronic steering and integrated braking systems designed to optimise performance and handling.

Lightweight construction is a key feature, with extensive use of carbon fibre-reinforced plastic (CFRP) in components such as the roof, bonnet, front splitter, and rear spoiler. Inside, CFRP is used for the centre console, shift paddles, and interior trim. M carbon bucket seats, incorporating CFRP, provide a race car feel and comfort. The car weighs approximately 20 kg less than the BMW M4 Competition Coupé with M xDrive.

The M4 CS has standard 19-inch front, and 20-inch rear forged light-alloy wheels and track tyres, offering exceptional lateral control and traction. Customers can opt for high-performance tyres for everyday use. The braking system includes M compound brakes, with optional M carbon ceramic brakes available.

Exclusive design features include special BMW Individual paint finishes, a frameless BMW kidney grille, yellowilluminating headlights, and laser-lit rear lights. The interior boasts an M Alcantara steering wheel, M seat belts, an anthracite headliner, and specific trim elements, all contributing to a racing-inspired yet luxurious environment.

Technologically, the BMW M4 CS is equipped with the latest BMW iDrive system, based on BMW Operating System 8.5.

The system features a 12.3-inch information display and a 14.9-inch control display. It supports touch and voice control and has exceptional M-specific graphics and widgets. The car also includes the M Drive Professional system with features like the M drift analyser and M lap timer, aiding track enthusiasts.

Standard equipment includes the BMW Live Cockpit Professional with a head-up display, BMW Maps navigation, smartphone integration, wireless charging, and a WiFi interface. Safety and comfort features such as park distance control, parking assistant, front collision warning, and lane departure warning are also included, along with additional driver assistance system options.

The BMW M4 CS is being produced at the BMW Group Plant Dingolfing; this special edition promises a blend of everyday practicality and high-performance thrills, embodying BMW M's racing heritage and engineering prowess.

For those interested in acquiring the new M4 CS, please get in touch with Muscats Motors at bmwmini@mml.mizzi.com.mt with your details. Please note that BMW Malta has a singular allocation for this exclusive model.

Maximising ROI

The Financial Imperative of EU Product Certification

Product certification facilitates market access, particularly within the European Union. The rigorous certification process, from initial product design to final approval, ensures products comply with EU standards, such as the CE marking. This certification is not merely a legal necessity but a strategic investment that enhances a product's appeal by certifying its safety and quality to potential buyers.

The certification process involves a significant financial commitment. Each step, from design and testing to final certification, incurs costs, culminating in a substantial investment. Financial acumen is crucial for navigating these expenses strategically, ensuring efficient resource allocation, and managing financial risks associated with noncompliance.

Decisions like conducting in-house testing or using third-party laboratories have substantial cost implications. Additionally, maintaining certification requires ongoing investment as EU standards evolve, necessitating dynamic financial planning.

The evolving nature of EU directives and regulations, such as those concerning machinery, chemical concentrations in products, and electrical equipment, poses continuous challenges to businesses. These regulations significantly impact market dynamics and necessitate frequent updates to business strategies. Professionals in commerce and finance must thoroughly understand these regulatory landscapes to navigate their complexities successfully. This involves adapting to changes and anticipating them to mitigate risks such as fines, recalls, or market access restrictions, which can have severe financial repercussions.

Beyond compliance, the certification process inherently enhances product quality and reliability, which is crucial for reducing return

rates and minimising customer complaints. This benefits consumers by ensuring they receive reliable and safe products and supports manufacturers by minimising the financial and logistical burdens associated with product failures. Improved product quality, facilitated by rigorous testing and adherence to quality standards, reduces the likelihood of costly liability claims.

The costs also include investments in training staff to understand and implement the legislation and standards, developing robust internal quality assurance processes, and potentially redesigning products to meet regulatory changes. Smaller companies should consider outsourcing knowledge services to professionals who deal with legislative requirements daily. This approach can prevent resource loss associated with learning the requirements and the risk of misinterpretation or misinformation. Engaging experts ensures comprehensive and accurate coverage of all criteria.

Obtaining product certification serves as a vital protective measure. It significantly reduces the risk of legal challenges related to product faults or safety failures, shielding manufacturers from potential lawsuits or penalties from regulatory bodies. Certification is crucial for highly regulated machinery, medical devices, and electrical equipment. It proves due diligence and compliance with recognised safety standards, maintaining corporate reputation and consumer trust.

Although safety declarations are made based on the stakeholders' judgement, they are also responsible for proving compliance with applicable legislation. Ensuring compliance is particularly important for companies looking to expand operations internationally. Certification mitigates risks associated with international market entry and enhances a company's competitive positioning by assuring potential partners and customers of product compliance. →

For consumers, a certification mark, such as the CE mark in Europe or mandatory marks in countries like the USA, is not just a symbol but a guarantee of quality and safety. This mark must be supported with correct documentation, encouraging trust and making certified products more appealing to consumers and distributors. This trust often translates into increased sales and a stronger market position for the brands involved.

In Europe, the CE mark is more than just a label; it is a declaration by the manufacturer or authorised representative that the product complies with all applicable EU legislation. This self-declaration signifies that the product has undergone rigorous testing and meets the stringent requirements of European directives and regulations. Economic operators, including manufacturers, importers, and distributors, ensure that only products meeting these standards are placed on the market. This framework ensures that the products circulating in the European market are safe and reliable, thus maintaining consumer confidence and protecting public health. Similarly, in markets such as the United States, many products must carry specific certification marks to demonstrate compliance with safety regulations. These mandatory markings are enforced to ensure products meet federal safety standards.

For both markets, the process typically involves third-party testing and certification by recognised bodies, further reinforcing consumers' trust in certified products. Brands that fail to obtain the necessary certifications can suffer severe reputational damage. The absence of such marks can signal non-compliance or substandard quality, leading to decreased sales, a loss of market share, and potential legal ramifications.

MicroInvest's 2024 Incentive Guidelines include a provision explicitly targeting certification costs, with a particular focus on EU certification requirements. This initiative supports businesses in achieving various certifications crucial for compliance, quality assurance, and market expansion. Eligible undertakings can claim costs incurred for obtaining certifications essential to their operations. These eligible costs encompass business advisory services provided by unrelated parties and the actual expenses related to the certification process. This financial aid significantly reduces the burden on businesses seeking to meet industry standards and regulatory requirements.

The incentive encourages businesses to invest in product safety and reliability by providing financial support. Promoting business awareness, public responsibility, and a culture of compliance and quality ensures that products entering the market adhere to stringent European standards. This assurance of quality and safety fosters consumer trust and enhances businesses' reputations.

Furthermore, achieving certification facilitates market expansion for businesses. It ensures that products can be sold throughout the EU without non-compliance risks, significantly broadening the potential market. This opens up new business opportunities and drives growth by allowing companies to compete on a larger scale.

Apart from product-related certification, the incentive also covers necessary management certifications such as ISO 9001, ISO 14001, and other approvals that can contribute to requirements to confirm

the product's continuous quality scrutiny and traceability. By supporting various certifications, the incentive ensures businesses can comprehensively improve their operations, enhance sustainability, and meet diverse industry standards.

For economic operators, the stakes are high. Ensuring compliance with certification requirements is not merely a legal obligation but a strategic business decision. Certification marks validate a product's safety and quality, making it more attractive to distributors, retailers, and consumers. The knowledge that certified products have complied with strict safety and quality standards lowers the risk of harm and increases user satisfaction, which motivates this preference.

On the other hand, neglecting the responsibilities associated with proper certification can have dire consequences. Products lacking appropriate certification may be perceived as risky or inferior, tarnishing the brand's reputation. This negative perception is particularly damaging in markets with stringent safety regulations, where uncertified products may be barred from entry altogether, resulting in significant lost business opportunities and financial losses.

Abiding by legislation and respective standards inherently elevates a product, mitigating risks of damage to the product itself, third-party property, or surrounding people. This is achieved through rigorous testing and adherence to norms, ensuring that products surpass minimum safety and performance criteria. This process benefits consumers by providing reliable and safe products, which supports manufacturers by reducing return rates and minimising customer complaints. Improvements in product quality also lessen the financial and logistical burdens associated with product failures. When products consistently meet stringent safety and quality standards, the risk of defects and failures diminishes, protecting manufacturers from potential legal issues and associated costs. This proactive approach to quality control safeguards the brand's reputation and fosters consumer trust and loyalty, creating a positive feedback loop that reinforces market success.

Understanding international trade and finance is crucial for managing the costs of obtaining and maintaining certification in different markets. This includes managing cross-border transactions and navigating currency fluctuations, which can significantly impact certification costs. Therefore, strategic financial planning and risk management are essential to maintaining financial stability and sustaining business growth.

To wrap up, product certification is far more than a regulatory obligation; it is a strategic advantage that opens doors to markets and builds consumer confidence. Although the certification process demands careful financial planning and risk management, the longterm rewards are substantial. These include greater market access, heightened consumer trust, improved product quality, and reduced legal risks. Therefore, investing in product certification is essential for any manufacturer seeking success in the competitive global market. Moreover, businesses can leverage available financial aid and expert guidance to navigate this complex process, ensuring they meet the necessary standards without compromising operational efficiency.

Beating burnout

Burnout has become an all-too-common experience for many professionals in today's fast-paced, high-stakes work environment. Over the past few years, the topic has sparked countless conversations as people grapple with the relentless demands of their careers. To delve deeper into this pervasive issue, Dayna Camilleri Clarke spoke with Patrick Psaila, a distinguished psychologist and founder of PsyPotenital, to understand what burnout truly is, how to recognise its signs, and what steps we can take to prevent or recover from it.

Burnout, as defined by the World Health Organisation, is "a syndrome conceptualised as resulting from chronic workplace stress that has not been successfully managed." Patrick elaborates that burnout manifests through three primary symptoms: feelings of energy depletion or exhaustion, increased mental distance from one's job or negative feelings towards one's career, and reduced professional productivity. However, these are just the tip of the iceberg.

Burnout can manifest physically as constant fatigue, lowered immunity, frequent headaches, and significant changes in eating and sleeping patterns. Emotionally, it may manifest as feelings of failure, self-doubt, helplessness, hopelessness, and a sense of being trapped or defeated. Behaviourally, signs include a loss of motivation, increased negativity, decreased fulfilment, avoidance of responsibilities, isolation, and resorting to comfort eating, alcohol, or drugs.

Recognising burnout is crucial because it typically creeps up gradually and occurs in stages. Patrick emphasises that prolonged, unmanaged stress can lead to burnout, marked by acute physical, mental, and emotional exhaustion. "Burnout is not an all-or-nothing condition," Patrick notes. "It's a gradual process that often starts with feeling overly stressed and can develop into fullblown burnout if not addressed."

Preventing or recovering from burnout starts with awareness. Patrick advises regularly evaluating our working habits, lifestyle, and overall wellbeing. Often, we're so caught up in the daily grind that we overlook these crucial self-assessments. He underscores the importance of reaching out for support from friends, family, or professionals like psychologists or counsellors. Social connections and professional guidance can offer much-needed perspective and practical assistance.

Awareness and recognition

Awareness is the first step in preventing or recovering from burnout. "We are often so caught up in the daily grind that we might either dismiss or totally ignore the warning signs of burnout," Patrick explains. It's essential to periodically stop and evaluate our working habits, lifestyle, and quality of life. Taking an honest look at how we feel and our

overall wellbeing is crucial. Recognising when we are heading towards burnout allows us to take necessary actions before it becomes too late.

Reaching out to others for support "Social contact and connection are nature's antidote to stress," says Patrick. When others are aware of our struggles and provide

We are often so caught up in the daily grind that we might either dismiss or totally ignore the warning signs of burnout.

support, our perspective changes, making situations feel more manageable. Seeking professional help from psychologists, psychotherapists, counsellors, or coaches can be invaluable in finding our feet. Patrick stresses that there is no shame in admitting we feel burned out and need help. Informing trusted colleagues and supervisors can also lead to practical support and adjustments that ease our burden. →

Challenging and redefining our attitude towards work

Patrick encourages us to examine the importance of work in our lives and how much time, effort, and energy we dedicate to it. "We are not only defined by the work we do but also by who we are, our personalities, values, and relationships," he explains. A balanced approach to work helps avoid the trap of making it our only source of fulfilment. By redefining our attitude towards work, we can maintain a healthier balance and prevent burnout.

Connecting with what gives us a sense of purpose

A clear sense of purpose aligns our efforts and helps maintain motivation, especially when facing tough times. However, Patrick warns that our commitment and passion for a meaningful cause can sometimes blind us to burnout warning signs. "Constant awareness and reflective practice are important to help us maintain balance," he advises. Regularly checking in with ourselves ensures we stay aligned with our purpose without overcommitting and risking burnout.

Engaging in good self-care practices

Self-care is fundamental in preventing burnout. "We are all aware of the importance of rest, relaxation, exercise, sleep, and healthy nutrition," Patrick notes. Yet, these basic self-care practices are often the first to be compromised when we are overly stressed. Ignoring self-care can lead to a downward spiral of pushing through fatigue until burnout. Prioritising self-care helps maintain our energy and resilience, preventing burnout from taking hold.

Investing in meaningful relationships

Research consistently shows that nurturing close relationships and friendships and spending quality time with loved ones provide a buffer against life's challenges. "Meaningful connection creates mutual understanding and a safe space to express our vulnerability," says Patrick. Investing in relationships enhances our support network, providing strength and resilience during stressful times.

Learning how to switch off work and engage in other activities

Studies from the Finnish Institute of Occupational Health highlight the dangers of excessively long working hours, including

impaired sleep, depression, memory issues, diabetes, heart disease, and alcohol abuse. Extended hours also negatively impact productivity, decision-making, relationships, and emotional regulation. Patrick emphasises the importance of balancing our week with enjoyable activities, allowing us to express our creativity. "Switching off from work and engaging in other fulfilling activities is critical for maintaining our health and preventing

burnout," he asserts.

Building resilience against burnout

Implementing these practical tips helps prevent burnout and aids in recovery while building resilience. Patrick believes resilience allows us to thrive under high pressure and stress, maintaining our wellbeing and productivity. "By making small changes in the right places, we can regain our sense of

Patrick Psaila

wellbeing and possibly nip burnout in the bud," he says. Patrick advises those experiencing burnout to take it seriously and commit to a recovery journey. Recognising the signs early, seeking support, and prioritising self-care can lead to significant improvements.

Patrick Psaila's insights offer a comprehensive understanding of burnout, highlighting that

Quick tips to mitigate stress

Stress management is essential for preventing burnout and maintaining overall wellbeing. Here are some quick, actionable tips to help you mitigate stress in your daily life:

1. Practice deep breathing

Deep breathing exercises can quickly reduce stress and promote relaxation. Try the 4-7-8 technique: inhale deeply for 4 seconds, hold your breath for 7 seconds, and exhale slowly for 8 seconds. Repeat this cycle a few times to calm your mind and body.

Switching off from work and engaging in other fulfilling activities is critical for maintaining our health and preventing burnout.

recovery and resilience are within reach with the right strategies. As we navigate the pressures of modern professional life, his advice provides a roadmap to maintaining our wellbeing and productivity, ensuring we can thrive even in the most demanding environments. Through awareness, support, self-care, and balance, we can prevent burnout and build a sustainable, fulfilling career.

2. Take regular breaks

Working continuously without breaks can lead to fatigue and decreased productivity. Implement the Pomodoro Technique, which involves working for 25 minutes followed by a 5-minute break. After four cycles, take a longer break of 15–30 minutes. This method helps maintain focus and reduce stress.

3. Stay active

Physical activity is a powerful stress reliever. Aim for at least 30 minutes of moderate exercise most days of the week. Walking, jogging, yoga, or even dancing can boost your mood and energy levels.

4. Maintain a healthy diet

Eating a balanced diet rich in fruits, vegetables, lean proteins, and whole grains can positively impact your stress levels. Avoid excessive caffeine and sugar, which can exacerbate anxiety and stress.

5. Get adequate sleep

Quality sleep is crucial for stress management. Establish a consistent sleep schedule by going to bed and waking up at the same time each day. Create a relaxing bedtime routine, avoid screens before bed, and ensure your sleep environment is comfortable.

6. Practice mindfulness

Mindfulness techniques, such as meditation, can help you stay present and manage stress more effectively. Apps like Headspace and Calm offer guided meditations that are easy to integrate into your daily routine.

7. Stay connected

Social support is vital for managing stress. Stay connected with friends and family; don't hesitate to share your feelings. Regular social interactions can provide emotional support and a sense of belonging.

8. Set realistic goals

Setting realistic and achievable goals can prevent you from feeling overwhelmed. Break down larger tasks into smaller, manageable steps and celebrate your progress along the way.

9. Manage your time

Effective time management can significantly reduce stress. Prioritise your tasks, delegate when possible, and avoid procrastination. Tools like Trello and Forest can help you stay organised and focused.

10. Engage in hobbies

Taking time for hobbies and activities you enjoy can provide a much-needed mental break. Whether reading, gardening, painting, or playing a musical instrument, engaging in activities that bring you joy can help alleviate stress.

11. Practice gratitude

Cultivating gratefulness can shift your focus from stressors to positive aspects of your life. Keep a gratitude journal and write down a few things you're thankful for each day. This practice can enhance your overall wellbeing and reduce stress.

12. Seek professional help

If stress becomes overwhelming, don't hesitate to seek professional help. Psychologists, therapists, and counselors can provide valuable tools and strategies for managing stress and preventing burnout.

Charting your course

A wealth management roadmap for Maltese investors

Paul Rostkowski examines various wealth management strategies that Maltese investors, both local and foreign, can consider to build and preserve their wealth.

Malta, a sun-drenched island nation in the heart of the Mediterranean, offers more than just stunning landscapes and rich history. It boasts a robust financial services sector that has steadily grown. With a stable economy, a favourable tax regime, and a burgeoning reputation as a wealth management hub, Malta increasingly attracts investors seeking to secure their financial future. The island's strategic location and modern infrastructure make it an ideal destination for personal and corporate wealth management.

Understanding your financial goals is the cornerstone of any effective wealth management strategy. Whether you aim for a comfortable retirement, funding your children's education, or building a legacy for future generations, defining your aspirations is crucial. From equities and bonds to mutual funds, ETFs, real estate, and alternative

investments, we will explore how these options can suit your specific needs and objectives.

Additionally, we will highlight the importance of diversification in mitigating risk and enhancing potential returns. By spreading investments across different sectors, geographic locations, and asset classes, investors can create a balanced portfolio that withstands market volatility. Seeking professional guidance from qualified financial advisors can further enhance your investment strategy, ensuring that your portfolio aligns with your risk tolerance and long-term goals.

As we navigate these wealth management strategies, we must remember that each investor's journey is unique. Careful planning, ongoing monitoring, and informed decisionmaking are crucial to building and preserving wealth in Malta's dynamic financial landscape.

Understanding your investment goals

The cornerstone of any effective wealth management strategy is a clear understanding of your financial goals. Whether you aim for a comfortable retirement, funding your children's education, or building a legacy for future generations, defining your aspirations is crucial. When formulating your investment plan, consider factors like your risk tolerance, investment horizon, and desired income stream.

Here are some investment options for investors:

Equities: Investing in stocks of established companies offers the potential for high returns but carries inherent market risk. Owning equities can be a powerful wealth-building tool. Companies often strive to grow and

expand, resulting in rising stock prices and potentially significant returns for investors. Additionally, some companies distribute a portion of their profits to shareholders through dividends, providing a regular income stream. Diversification is key to reducing investment risk. By spreading your money across different sectors (tech, healthcare, etc.), geographic locations (developed and emerging markets), and company sizes (large-cap, mid-cap, and small-cap), you avoid being overly reliant on any single area of the market. This helps minimise the impact of a downturn in a specific sector, company, or country. Investing in equity has also been the cornerstone of any portfolio.

Below is the performance of the S&P 500 index, a market-capitalisation-weighted index that tracks the performance of 500 leading publicly traded companies listed on stock exchanges in the US. It shows explicitly how it performed for investors holding it in euro (EUR) over 32 years (February 1992 - June 2024).

Over 32 years (February 1992 - June 2024), the S&P 500 delivered a solid average annual growth rate of 11.03%; in simpler terms, if you invested €1,000 in the S&P 500 in February 1992, it would have grown to approximately €25,937 by June 2024, assuming reinvestment of all dividends. But it came with some volatility. The standard deviation of 15.28%

indicates fluctuations above and below this average. The Sharpe ratio of 0.68 suggests the return somewhat compensates for the level of risk taken, though it's essential to consider this in context and compare it to other investments.

Bonds: Bonds, issued by governments and corporations, provide a steady stream of income (coupons) and are generally considered less risky than stocks because they represent a debt obligation, meaning the

Source: Curvo

issuer (borrower) is legally bound to repay the principal amount you invested at the bond's maturity date. Bonds can play a valuable role in a diversified portfolio. They offer income and stability and can help offset the volatility of equities. However, it's important to consider your investment goals, risk tolerance, and overall asset allocation strategy when deciding how much to invest in bonds.

Above is the performance of the Bloomberg Global Aggregate Corporate Index (EUR), which tracks the performance of investment-grade corporate bonds issued globally in various currencies.

This information describes the performance of the Bloomberg Global Aggregate Corporate Index (EUR) over an 11-year period, from September 2012 to June 2024. The Bloomberg Global Aggregate Corporate Index (EUR) saw a modest average annual growth of 3.25% over 11 years (September 2012 - June 2024). In simpler terms, if you invested €1,000 in the index in September 2012, it would have grown to approximately €1,441 by June 2024. While positive, this return should be viewed in light of inflation. The index exhibited moderate volatility (standard deviation of 6.54%), suggesting a moderately volatile investment compared to other asset classes like stocks. However, the Sharpe ratio of 0.49 indicates that the return may not have been substantially more significant than the risk involved. Bonds provide a reliable source of →

income and can act as a buffer against market downturns.

However, they typically offer lower returns than stocks. Understanding the different types of bonds, associated risks, and how they fit into your overall investment strategy is crucial to making informed investment decisions.

Mutual Funds & ETFs: Mutual funds and ETFs (Exchange Traded Funds) offer a convenient and accessible solution for Maltese investors. These professionally managed investment vehicles pool funds from multiple investors, offering diversification and exposure to a broader range of assets. Mutual funds are actively managed, while ETFs passively track a specific index. Both mutual funds and ETFs pool money from multiple investors, allowing you to invest in a diversified basket of assets with a single purchase. This reduces risk by spreading your investment across different sectors and asset classes.

Selecting the right mutual fund or ETF involves considering several factors. Expense ratios and ongoing management fees should be low to maximise returns. Align your choice with your goals—are you looking for long-term growth, income generation, or a mix? Finally, consider your risk tolerance, as some funds invest in more volatile assets. Mutual funds and ETFs provide a convenient, professionally managed path to diversification and achieving your financial goals.

An example is the Fidelity 500 Index Fund (FXAIX), a low-cost mutual fund mirroring the S&P 500 index, which grants instant diversification across 500 large American companies. This passive investment tracks

the S&P 500's performance, meaning your returns are directly tied to this index. While FXAIX offers broad exposure to the US market at a minimal expense ratio, it doesn't actively pick stocks and may not outperform the market or provide the level of control some

Each investor's journey is unique. Careful planning, ongoing monitoring, and informed decision-making are crucial to building and preserving wealth in Malta's dynamic financial landscape.

investors seek. However, for those prioritising diversification, low fees, and convenient access to the large-cap US stock market, FXAIX can be a suitable option.

Real Estate: Maltese real estate can be tempting for local investors looking to diversify their portfolios and build wealth over time. The rental market in Malta is strong, fuelled by tourism and a growing population. Also, Malta's property values have generally increased in recent years, suggesting potential for capital gains. However, there are also significant costs when investing in real estate.

Here's a breakdown of the other side of the coin:

» High Entry Costs: The initial investment required for property purchase can be substantial, limiting accessibility for some investors.

» Ongoing Expenses: Real estate comes with ongoing costs like property taxes, maintenance, and potential repairs, impacting your overall return.

» Lower Liquidity: Unlike stocks or bonds, real estate can't be easily bought or sold. If you need to access your money quickly, selling a property can take time.

» Market Dependence: The property market is susceptible to economic downturns. If property values fall, you could face difficulty selling or experience negative returns.

While Maltese real estate offers potential benefits, a balanced approach is crucial. Consider these drawbacks alongside the initial points to make an informed decision about whether real estate aligns with your investment goals and risk tolerance.

Alternative Investments: Beyond stocks and

bonds, alternative investments like private equity (early-stage companies), venture capital (funding start-ups), hedge funds (complex market strategies), and even digital assets (cryptocurrencies) offer the potential for high growth but come with a significant risk premium. These are typically illiquid (hard to sell quickly) and require a long time horizon. Hedge funds often have high fees, while cryptocurrencies are volatile and potentially risky due to scams and regulations. These are best suited for sophisticated, risk-tolerant investors as a small part of a diversified portfolio due to the inherent risks involved. These alternative investments are best suited for sophisticated investors with a high tolerance for risk. They should only comprise a small portion of a diversified portfolio due to their inherent risks and lack of liquidity. Before venturing into these territories, it's crucial to research the specific investment and understand the associated risks thoroughly.

Seeking professional guidance

Building a successful wealth management strategy requires careful planning and ongoing monitoring. Consider seeking guidance from a qualified financial advisor who can assess your unique circumstances, risk tolerance, and financial goals. A professional advisor can help you navigate the investment landscape, select suitable investment vehicles, and ensure tax efficiency.

The information in this article is provided solely for educational and informational purposes. It should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Similarly, any views or opinions expressed in this article are not intended and should not be construed as investment, tax or legal advice or recommendations.

Financial wellbeing platforms

The essential tool for modern workplaces

Consider this: the Eurobarometer, which has existed for decades, only published its first statistics about financial literacy in 2023. Governments and institutions across the continent have repeatedly failed to implement effective strategies to address the problem of financial literacy. In the financial wellbeing workshops, I have delivered in Malta and internationally, I have witnessed the effects firsthand; the lack of financial literacy is a universal issue. The challenges we face in

Malta are similar to those encountered in other countries.

These workshops are gaining popularity, especially among businesses striving to provide their workers with the best possible wellbeing strategies. However, to reach more people and make financial education more accessible, the focus is increasingly shifting towards using and implementing financial wellbeing platforms.

What are financial wellbeing platforms?

Financial wellbeing platforms are digital tools designed to help individuals manage their finances more effectively. They provide resources, education, and personalised guidance to improve financial literacy and reduce financial stress. Two essential and popular platforms in the UK are Bippit and Nudge Global.

Bippit (bippit.com) offers one-on-one coaching with financial experts, tailored financial plans, and various tools to help employees manage their finances better. Its holistic approach ensures that users receive comprehensive support, from budgeting and saving to investing and retirement planning. Bippit has been praised for its user-friendly interface and the personalised attention it offers to each user.

Nudge Global (nudge-global.com) is another leading platform focusing on financial education and behavioural change. It uses data and insights to deliver personalised financial education content to its users. Nudge Global empowers individuals to make better financial decisions through timely and relevant nudges. This platform is recognised for its innovative approach to financial wellbeing, combining technology with behavioural science to create lasting positive changes in users' financial habits.

Furthermore, a recent report from this platform stated, "Employees working towards goals with financial confidence and employer support are more engaged, have a better employer relationship, and have stronger wellbeing."

platforms, I am collaborating with various local players to launch Monipal (monipal.com), a financial wellbeing app rooted in three pillars: personalised finance news, a budgeting tool, and financial education.

Companies integrating such platforms have reported up to a 97% retention rate. Therefore, fostering financial literacy and wellbeing is beneficial not only for employees but also for the company's overall health.

The importance of these platforms cannot be overstated. In Europe, financial literacy rates are alarmingly low. According to the Standard & Poor's Global Financial Literacy Survey, only 52% of adults in the European Union are financially literate. This statistic underscores the urgent need for effective financial education and support systems.

Young professionals face unique financial challenges that amplify the need for robust financial literacy. For young professionals, who are often in the initial stages of their careers, mastering financial basics such as budgeting, saving, and investing is crucial. Financial wellbeing platforms address these needs by offering tailored content and interactive tools, empowering this demographic to achieve economic stability and growth.

Recognising the importance of such

According to a recent Eurobarometer survey, financial literacy in the EU is notably low, with only a handful of countries showing high proficiency levels. This demographic, typically aged 25–45, juggles student loans, home loans, and investments, underscoring the need for accessible financial education tools. Financial wellbeing platforms like Monipal provide essential resources, helping young professionals build critical financial skills and make informed decisions early in their careers.

Additionally, the importance of financial literacy for young professionals has increased due to the instability of the global economy. Many are now more aware of the need to manage their finances prudently. According to the OECD, a lack of financial literacy can leave individuals vulnerable to economic shocks. Financial wellbeing platforms educate and provide practical solutions, helping young professionals tackle uncertainties and plan for a secure financial future.

By integrating financial wellbeing platforms like Bippit, Nudge Global and Monipal into workplace wellbeing programs, businesses can provide employees with the tools and knowledge they need to achieve economic stability and reduce stress. This benefits the employees and leads to a more productive and engaged workforce.

Summer magic

It's the beautiful season, so it's only fair that MONEY gives gorgeous gifts.

Horsebit-detailed

leather-trimmed monogrammed

coated-canvas sandals

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MASSIMO ALBA

Alaccia straight-leg

pleated striped linen

Bermuda shorts

€280

Venezia leather duffle bag

€3,920

DRIES VAN NOTEN

Wide-leg

cotton-canvas trousers

€645

& SHEPPARD

Cotton-canvas fedora

€160

[All items available from mrporter.com, unless otherwise specified]

GUCCI

BERLUTI

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Rio Branco leather-trimmed

Alveomesh and suede sneakers

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KAPITAL

Katsuragi tapered appliquéd distressed cotton-twill trousers

RICK OWENS

Oversized cottonflannel shirt

€705

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Straight-leg logojacquard cotton-blend canvas shorts

ORLEBAR BROWN

Horton wool and cotton-blend polo shirt

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VEJA

EU member states set to back tariffs on Chinese EVs, says trade chief

EU member states are set to support the imposition of tariffs on Chinese electric vehicles, according to the European commissioner for trade, Valdis Dombrovskis. The tariffs could be enforced in November, following a vote at the end of October. Dombrovskis stated, "It's evident that member states acknowledge the necessity of safeguarding the EU's automotive industry due to the potential risk. The market share of Chinese battery-electric vehicles is rapidly expanding, with subsidies contributing to this growth. Hence, this is an issue that certainly needs to be addressed."

In early July, the European Union imposed provisional tariffs on Chinese electric vehicles, ranging from 17.4% to 37.6%. This is in addition to the existing 10% duty on Chinese auto imports. While this decision has led to opposition from Beijing, proponents of the tariffs argue that they are crucial to protect EU manufacturers from unfair competition. Last year's investigation by the European Commission discovered that Chinese subsidies allowed businesses to maintain artificially low prices. China has disputed these allegations, asserting that its industry has naturally prospered. Dataforce said Chinese brands held an 11% share of the European electric car market in June.

How could China react?

The reaction from China to definitive tariffs remains unclear, although Beijing has already threatened to impose its levies on EU goods such as pork and spirits. Some Chinese carmakers have also begun opening plants in the EU to bypass tariffs. Dombrovskis cautioned that a minimum portion of manufacturing must occur in the EU to avoid import fees. The Commission's position is still

less severe than the US government's stance. US President Joe Biden imposed a 100% tariff on Chinese electric vehicle imports in May.

Olympic Committee sues influencer Logan Paul over Prime claim

Before the start of the 2024 Paris Olympics, well-known influencer Logan Paul is facing a trademark infringement lawsuit from the US Olympic Committee regarding his Prime hydration drink. The US Olympic Committee has filed a lawsuit in the District of Colorado against influencer Logan Paul. They claim he is using trademarked phrases to promote his Prime brand.

The trademark infringement first came to light through Prime's partnership with NBA star Kevin Durant, where the drink was described as the "Team USA Kevin Durant Drink" and "Kevin Durant Olympic Prime Drink." The phrases used include

"Olympic," "Olympian," "Team USA," and "Going for Gold."

The lawsuit alleges that "Prime Hydration's conduct has been and continues to be willful, deliberate, and in bad faith, with malicious intent to trade on the goodwill of the USOPC

and the IOC" and that the company has caused "damage and irreparable injury" to the US Olympic Committee.

This is not the first time Logan Paul's brand Prime has come under fire. In July, the brand was investigated by the Food and Drug Administration (FDA) as children primarily consumed it despite being marketed to consumers over 18. Health officials and politicians had expressed concerns regarding the caffeine levels in the drink. While the brand's hydration line contains no caffeine, its energy line includes 200 mg of caffeine per 12-ounce can, equivalent to a six-pack of Coke cans.

Valdis Dombrovskis