MFSA Feedback on Digitalisation in Banking: Focus on Customer Experience and Operational Readiness

Review Scope and Context 

The MFSA reviewed a sample of credit institutions active in the local retail market. The exercise considered publicly available information, data provided by the institutions, and supervisory meetings focused on digital service features, customer engagement, and future plans. 

 

Main Observations 

• Onboarding and Access to Services 

Most institutions do not yet offer full digital onboarding, though many have this under development. Where onboarding is available, it often involves hybrid processes combining online forms with in-branch appointments. Only two institutions reported having fully automated onboarding, which is primarily used by younger customers. 

• Digital Channels and Usage 

All institutions provide internet and mobile banking services, with usage increasing steadily. Mobile banking in particular saw higher growth in transaction volume, indicating a shift in customer preferences. However, certain basic functions — such as outward payments or card management — are still not available across all mobile apps. 

• ATM Services and Branch Trends 

Use of ATMs has stabilised, with some banks expanding features such as contactless withdrawals and ID verification. Over-the-counter transactions have continued to decline, with digital alternatives now preferred for routine payments and transfers. 

• Security and Customer Notifications 

The MFSA noted inconsistencies in how transactions are reflected in digital account statements. Customers are not always clearly informed whether payments are pending, blocked, or settled. The Authority expects real-time notifications and clear presentation of account information across all platforms. 

• AI and Chatbots 

Use of artificial intelligence remains limited, with only a few institutions deploying AI for chatbots and fraud detection. Others are exploring how AI could support personalised services and operational efficiency, but adoption is still in early stages. 

• Customer Support and Inclusivity 

The review highlighted the need for digital services to remain accessible to all customers, including those less familiar with online tools. Several institutions are improving their websites and digital guidance materials, but the MFSA expects more progress in ensuring clarity and ease of use. 

 

Expectations and Recommendations 

The MFSA expects credit institutions to focus not just on the functionality of digital services, but on the full customer journey, from onboarding to ongoing support. Institutions are encouraged to: 

• Enhance digital channels without compromising service quality for in-branch clients 
• Improve the consistency and clarity of transaction data across platforms 
• Introduce real-time notifications as a standard feature 
• Ensure digital channels are secure, user-friendly, and supported by accessible help features 
• Develop long-term strategies for the use of AI and automation where appropriate 

The MFSA’s thematic review reflects the sector’s progress in digital service delivery while pointing to areas that need further development. Institutions are reminded that digitalisation is not simply a matter of technology, but of maintaining trust, accessibility, and efficiency across all touchpoints. 

 

 

How can BDO Malta help 

BDO Malta can assist credit institutions in assessing their digital readiness, reviewing customer-facing processes, and enhancing their operational frameworks. Our teams provide support across governance, regulatory compliance, digital strategy, and risk management — helping banks strengthen their digital offering in line with supervisory expectations.


To access the 'Dear CEOs letters' issued by the MFSA, click here or visit our articles related to MFSA's news: MFSA Survey Highlights Varying Preparedness for CRR3 Implementation, MFSA pushes Financial Institutions towards compliance with FIR/03 and MFSA Introduces New Fund Structures to Expand Malta’s Investment Options


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