Even before Malta's accession to the EU, the potential for growth of the financial services sector in Malta as part of an enlarged Europe was widely acknowledged, according to Juanita Bencini, KPMG partner.

Mrs Bencini was interviewed by The Times Business shortly before the start of KPMG's Biennial Financial Services Conference which is being held tomorrow at the Westin Dragonara Resort.

"Locally and internationally, KPMG is particularly strong in the financial services sector and therefore it was only appropriate that we would take the lead to organise the first major sectoral conference on financial services," she says.

The first KPMG financial services conference was held in 2005, 10 months after Malta's accession to the EU. At the time, Mrs Bencini points out, the partners did not have the clear intention to hold a conference every two years "but our first conference was very well received by the industry participants and this led us to take a decision to entrench it firmly in the firm's calendar".

Mrs Bencini says that two years between one conference and another is just about right and ensures that sufficient changes have taken place in the interim that justify people coming together to discuss these changes over a one-day seminar.

"The KPMG network has always been very supportive of this initiative by the local practice and we always manage to have some of the best speakers from the KPMG world present at our conference."

Does she believe Malta's future as a financial services centre is secure?

"Yes, I strongly believe that provided that we remain proactive, Malta's future as a financial services centre is secure. This means we must not become complacent. What makes a country's financial services sector secure? In the final analysis, I think that it is the quality and calibre of the institutions that choose that jurisdiction to set up their operations that provide the security."

She explains that the quality of the international organisations that have chosen to set up in Malta over the last few years is a clear testament to the growing attraction of the jurisdiction.

However, she says, "the financial services sector is agile and mobile and one whose success depends on the ability of financial institutions to respond quickly to demands and needs of their customers. This is why we must make sure that complacency does not set in.

"We are extremely fortunate in having a regulator that is accessible, market-oriented and hence responsive to changes. This is one of the ingredients that have made the financial services sector in Malta what it is."

Looking back at the financial crisis which shook the global economy over the past few months, Mrs Bencini says that Malta's entry into the European Union and the adoption of the euro couldn't have been more timely, and that as the world and in particular Europe look beyond the recession, Malta's importance as a financial services centre should grow even more.

She describes the challenges facing the financial services sector in Malta as "growing pains", adding that one challenge is to ensure we have the right skill sets and resources available to satisfy the demands of a growing sector.

"Within industry fora, I have often made the point that I don't feel enough is being done to make our youngsters aware of financial services as a career path. The task is not made easier by the fact that it is very difficult for children in secondary school to identify with a career in insurance or banking, for example.

"Other areas such as IT or tourism are easier for them to understand and identify with. The issue of resources needs to be tackled by all concerned with an interest in expanding the sector. Another challenge is that we must retain our competitiveness, be it with reference to containment of costs, streamlining of procedures in connection with licensing as well as to the attractiveness of our taxation regime. Again this calls for cooperation between industry participants and the authorities to ensure that our competitive edge is not lost."

Mrs Bencini emphasises that the growth of the financial services sector is dependent on foreign direct investment. As the financial crisis bit into foreign companies' bottom lines and boards became taken up with getting the institution through the crisis, she explains, some firms that were thinking of setting up in Malta before the onslaught of the crisis decided to put their projects on the back burner.

"So I think that some of the growth momentum was lost in the period between the end of 2008 and the beginning of 2009.

"However, the last six months have been very encouraging and I can say that there has been a surge of interest in the jurisdiction - this will translate into actual business in 2010.

"Unlike other EU jurisdictions - even those that we were seeking to emulate before EU accession - we have not had any major casualties and the government did not have to intervene to shore up ailing institutions. Obviously balance sheets have shrunk as write-downs in investments have been reflected through the accounts, but we are already seeing a reversal of the trend, although it may be quite a while before we achieve the levels experienced in 2007.

"In my opinion, what has been extremely encouraging in the midst of all this turmoil is that none of the significant foreign players in the industry have decided to withdraw from Malta," she adds.

Mrs Bencini says the measures set out by the G20 will have far-reaching effects on the financial sector globally for many years to come.

"The pronouncements of the G20 are shaping future regulation of the sector, and the EU is at the forefront of translating this direction coming from the G20 into action through a revision of some directives and proposals for new ones. As members of the EU we will have to transpose this new regulation sooner rather than later, and this will lead to enhanced supervision of the sector by the authorities."

She believes Malta can stand to gain from the measures and initiatives driven by the G20.

"Having a presence in an EU jurisdiction is going to become beneficial in light of the G20 attacks on tax havens. We are already registering interest in Malta from operators in offshore jurisdictions, and I am sure that if we pursue our marketing efforts towards these jurisdictions, we will stand to benefit greatly from business re-domiciliations and financial services operators seeking to establish a presence in an EU jurisdiction."