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Shaping Malta's Future 2023

The primary objective of the regulation is to strengthen the digital operational resilience of entities operating within the EU financial sector and to promote greater consistency in essential digital operational resilience standards for all financial entities across the European Union.

Grant Thornton Malta, in association with 12 Grant Thornton member firms in Europe are launching the very first study aimed at establishing an overview of the DPO (Data Protection Officer) function in the main European countries. This survey, of about 8 minutes, will allow us to establish a precise inventory, revealing the reality of the today's DPO function not only in Malta but also in our principal European neighbors. As part of the response analysis, you may be asked by our teams for an interview to comment on the results. Please note that the questionnaire is active until December 15, 2023. We sincerely appreciate the time you have taken to contribute to this study.

In an era where digitalisation is the lifeblood of business operations, Small and Medium Enterprises (SMEs) stand at the intersection of opportunity and vulnerability. The Digital Operational Resilience Act (DORA) Regulation is approaching, ushering in a new era of compliance requirements. Yet, for SMEs, DORA is not merely a challenge in terms of compliance; it presents a distinctive opportunity to strengthen their digital infrastructure and secure long-term success in the constantly changing digital environment.

The Financial Action Task Force (FATF) maintains a "grey list" of nations that exhibit strategic shortcomings in their efforts to combat money laundering and the financing of terrorism (AML/CFT). These countries are added to the list when they do not meet FATF standards or if concerns arise regarding their AML/CFT practices. Being placed on the grey list leads to heightened international scrutiny, impacts a nation's access to global financial systems, and has repercussions on its economy and reputation. To exit the list, countries must rectify the identified deficiencies and demonstrate progress in fortifying their AML/CFT systems.

In an era marked by the rapid ascent of artificial intelligence (AI), governments and regulatory bodies worldwide are navigating the complex terrain of AI governance. At the forefront of these efforts is the European Union’s proposed “Artificial Intelligence Act.” This comprehensive regulation aims to harmonize AI rules across the EU, fostering innovation while safeguarding fundamental rights and values.

In the dynamic landscape of contemporary business, the perpetual existence of uncertainties consistently influences the path of organizations. The way these uncertainties are recognized, evaluated, and handled plays a pivotal role in shaping an organization's trajectory. This is where ISO 31000 comes into play, offering invaluable guidance for proficient risk management.

In line with the European Commission’s shift to a legislative approach to AI, a regulation has been proposed which harmonises rules on artificial intelligence across the European Union. The proposed law intends to maintain control over the rapid development of these new technologies, whilst allowing innovation and optimising operations at the same time.

In today's ever-changing business landscape, uncertainties are a constant presence, steering the trajectory of organizations. How these uncertainties are identified, assessed, and managed can significantly shape an organization's journey. Enter ISO 31000, a beacon of guidance for effective risk management.

On 19 June 2023, the European Supervisory Authorities (ESAs), namely the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA) have launched a public consultation focusing on the first batch of policy products under the DORA. This includes one set of draft implementing technical standards (ITS) as well as four draft regulatory technical standards (RTS).

According to the latest data from the International Business Report (IBR), Grant Thornton’s global survey of mid-market companies, business leaders are being cautious about their future investment intentions. Across the board, in the second half of 2022 plans to invest were slightly down compared to H1 2022. Investment in staff skills has fallen by 2% to 53%, research and development intentions are down by four points to 51% and investment in technology is down by 3% to 57%.

The Financial Action Task Force (FATF) maintains a "grey list" of countries with strategic deficiencies in their anti-money laundering and counter-terrorism financing (AML/CFT) frameworks. These jurisdictions are included when they fail to meet FATF standards or if there are concerns about their AML/CFT measures. Reasons for inclusion on the list include weak AML/CFT frameworks, insufficient customer due diligence, lack of cooperation, and presence of terrorist financing. Being on the grey list brings increased international scrutiny, impacts access to global financial systems, and affects a country's economy and reputation. To be removed from the list, countries must address the identified deficiencies and demonstrate progress in strengthening their AML/CFT frameworks.

Over the last few years of market shocks and geopolitical tensions, mid-market businesses have grown accustomed to bracing for the unexpected - and planning for it. Despite ongoing economic uncertainty, data from Grant Thornton’s most recent International Business Report (IBR) shows that optimism among business leaders remains relatively buoyant. As they entered 2023, 59% of mid-market firms were optimistic about the year ahead, only 6% lower than the figures six months previously.

As we entered 2023, three of the threats uppermost in the minds of business leaders in the mid-market were inflation, cyber attack, and economic slowdown. According to data from the International Business Report (IBR), Grant Thornton’s global survey of mid-market companies, more than half (51%) of business leaders see inflation as an ongoing threat, while 47% cited cyber attack and 50% referenced economic slowdown as a threat at the beginning of this year. However, as spring has emerged so has turbulence in parts of the banking sector. Though not directly reported as a concern as the year commenced, turmoil in the banking sector is a direct result of a high inflation environment and its necessary monetary response, which have added to the climate of uncertainty for many businesses.

Mid-market firms using international supply chains have faced significant disruption and headwinds as a consequence of the war in Ukraine, the long tail of COVID disruption, and wider geo-political tensions. However, despite ongoing economic uncertainty, many international business leaders continue to see international trade, and particularly exports, as a key driver for growth.

Sustainability has gained traction over recent years, especially in terms of environmental protection. However, the sustainability framework (‘ESG Framework’) has another two pillars that are equally important: the social and governance aspects. The ESG Framework is governed by various laws and regulations across the globe, and this includes the enactment of the Corporate Sustainability Reporting Directive (‘CSRD’) by the European Commission.