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ARTICLE · 17 JULY 2026

MFSA Issues AI Governance And Prudential Risk Expectations For Malta Financial Services Firms

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The Malta Financial Services Authority has issued comprehensive guidance on artificial intelligence governance for financial firms, establishing clear expectations for board accountability, risk management frameworks, and third-party oversight. As AI adoption accelerates across the sector, regulated entities must now demonstrate robust control mechanisms, model validation processes, and data governance standards that align with both the EU AI Act and prudential requirements.

MaltaFinance and Banking
James Debono
James Debono
Jessica Camilleri
Jessica Camilleri
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On the 4th of June 2026, the Malta Financial Services Authority (“MFSA”) issued a Dear CEO Letter outlining its supervisory expectations regarding the adoption and use of Artificial Intelligence (“AI”) by financial services firms operating in Malta. The communication arrives against the backdrop of a rapidly evolving European regulatory framework, particularly following the entry into force of the EU Artificial Intelligence Act (Regulation (EU) 2024/1689) (“AI Act”), and reflects the Authority’s broader objective of supporting technological innovation while safeguarding financial stability, consumer protection and market integrity. Against this background, the Authority has provided guidance on the governance, risk management and control measures that should accompany the use of such technologies.

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