The impact of blockchain technology on financial services : analysing the Maltese perspective

Abstract

Innovation plays a prominent role within the financial sector, with financial technology pushing to replace traditional financial structures with newer, more efficient technological processes. Blockchain technology represents one of the most disruptive and divisive innovations in recent times, bringing with it countless opportunities, as well as new threats. Although many are pushing this technology as a solution to the financial sector’s problems, others are dismissing it as no more than a gimmick. In the light of these challenges, the local government has taken a proactive stance, encouraging the adoption of this technology through the establishment of a comprehensive DLT Framework with the aim of establishing Malta as a “Blockchain Island.” The following study therefore seeks to analyse the Maltese financial sector’s perspective towards this technology. Eleven interviews were carried out with financial sector players, regulators and blockchain professionals, with the aim of understanding their outlook and knowledge with regards this technology. The study also seeks to determine the awareness of the benefits and main concerns in relation to this technology, as well as the overall sentiment towards the newly implemented DLT Framework. This study ultimately concludes that the financial sector’s outlook remains relatively mixed, with certain sectors being more conservative than others. Similarly, whilst blockchain brings with it various benefits, other concerns arise in relation to the country’s readiness to implement this technology, the creation of new risks and the regulatory implications of this innovation. Lastly, whilst many respondents commended the new DLT Framework, others expressed concern that its implementation may have been rushed. It is therefore essential to continue raising awareness whilst aiding end users in implementing this disruptive technology.