Making the Case: Why Sparkasse Malta plc Adopted the Role of Validation Agent in the Global LEI System
Paul Mifsud, Managing Director at Sparkasse Bank Malta plc explains how becoming a Validation Agent enables banks to enhance their customer onboarding experience while, at the same time, saving costs and improving efficiency.
Author: Paul Mifsud, Managing Director of Sparkasse Bank Malta plc
In 2020, GLEIF launched the Validation Agent (VA) role within the Global LEI System, enabling financial institutions to simplify Legal Entity Identifier (LEI) issuance for their clients, reducing their onboarding time-to-revenue, and future-proofing their institutions for digital innovation. Sparkasse Bank Malta plc, a European bank offering corporate and private banking, investment, and custody services, recently completed the Validation Agent approval process. Paul Mifsud, Managing Director of Sparkasse Bank Malta plc, shares his thoughts about the business case for becoming a VA and how the role will deliver value-added services for the bank’s clients.
What are the business drivers for Sparkasse Bank Malta becoming a Validation Agent?
Our vision is to grow our enterprise into a European bank recognized for investment and depositary services and offering excellence and expertise in all we do. This philosophy drives us to establish long-term relationships with our customers to ensure the provision of efficient and seamless financial solutions and to seek new ways to optimize client lifecycle management processes. Our business model and resources are predominately focused on offering investment, custody, and depositary services. As such, the bank has built an extensive securities infrastructure with access to most markets worldwide. We recognize the current and future importance of LEIs in global trade finance and participation in capital markets, so the provision of LEI services is a natural addition to our product offerings. The VA role complements our business model and improves the level of service we can offer our customers.
Sparkasse Bank Malta is one of the first financial institutions in the European Union to become a Validation Agent. How is this significant?
Research has shown that broader adoption of LEIs can save banks a significant amount of money in client onboarding efficiencies alone. As banks around the world broaden their use of LEIs beyond regulatory reporting in capital markets to other banking business lines, such as trade financing, corporate banking, and payments, the resulting efficiencies will generate additional cost and efficiency savings. We are pleased to be at the forefront of financial institutions in the European Union that recognize how the VA role can facilitate greater trust, transparency, and efficiency across the financial services industry.
How will the role of Validation Agent impact Sparkasse Bank Malta’s internal processes and operations?
We determined that the Validation Agent model is the most efficient way to leverage established Know Your Customer (KYC), Anti Money Laundering (AML), and other onboarding processes to expand our capabilities. By partnering with RapidLEI, a Local Operating Unit (LOU), we’re able to assist with data collection and verification, which both improves data quality for the LOU and streamlines the LEI issuance process for our corporate clients. The LEI renewal cycle also becomes more efficient, resulting in improved customer satisfaction, cost reductions from efficiency gains, and simpler regulatory compliance.
Serving as a Validation Agent allows the bank to act as the main point of contact for our customers’ investment needs while also accelerating our own internal processes such as customer onboarding, payments and other transactions, and contract signing. In addition to improving our own internal data quality and management processes, the VA role will help Sparkasse Bank Malta act as a champion for greater consistency and standardization across entity reference data.
How will Sparkasse Bank Malta customers benefit from the bank’s new role as a Validation Agent?
The role of Validation Agent provides a uniquely powerful foundation to create new value-added services for our corporate clients. Not only does it eliminate duplication of efforts between client onboarding and LEI issuance activities, but it also removes friction from the LEI issuance process and enables our customers to realize more quickly the benefits of standardized, globally verifiable, and machine-readable entity identification. These benefits range from increased trust between counterparties to better access to cross-border payments, credit facilities, trade financing, and supply chains. It also helps our customers accelerate their own digital transformation and improves participation and visibility across digital and e-platforms.
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Paul Mifsud is the Managing Director of Sparkasse Bank Malta plc. Attended Downside School, a Benedictine school in Bath (UK). Gained his experience in finance through his education at the Centre International De Glion, in Switzerland where he graduated in Management and Finance. He furthered his education in securities from the Chartered Institute for Securities & Investment in London and went on to achieve a Chartered Banker MBA from Bangor University. Joined Sparkasse Bank Malta plc in 2006 as Managing Director after the Bank had acquired a majority stake in Quest Investment Services - a company he was a senior partner in, performing investment advisory services.
Mr. Mifsud is responsible for the implementation of company strategy and overall management of the Bank’s business. He was instrumental in developing the Bank’s business and presence in Malta developing the investment services / wealth management division at the Bank as well as steering the Bank to becoming a major player in fund custody in Malta. His areas of expertise are securities related, including trading, settlements, advisory, custody and Fund depositary services (AIFs and UCITs).