Protecting FinTech: Initiative of Malta's Papaya Ltd.

Estimates suggest that the FinTech market is presently worth approximately $300 billion. Experts predict a compound annual growth rate (CAGR) of 14% to 19% until 2030. The robust growth of this market segment is indisputable, with projections indicating it could reach $1 trillion by 2030. FinTech faces both growth drivers and challenges. Papaya Ltd., a financial institution based in Malta, has launched an initiative that, according to company officials, is designed to protect the interests of FinTech projects effectively.

Papaya Ltd.'s initiative focuses on two crucial factors that could make the FinTech industry more attractive to both stakeholders and customers. The first factor is the intentional or unintentional distortion of factual information about the performance of specific FinTech projects and industry data as a whole. Experts refer to these issues with terms such as defamation, fake news, disinformation, misinformation, etc. The second factor involves the recurring conflicts between different FinTech projects and financial regulators.

The core of Papaya Ltd.'s initiative is to create a specialized expert organization, foundation, or association dedicated to helping FinTech players reduce the impact of the aforementioned factors. This organization would effectively protect against defamation and act as a mediator in resolving disputes and contradictions between FinTech projects and financial regulators.

Fake news & Diffamation 

The financial market is notoriously sensitive to information disseminated through both print and digital media, affecting not only the FinTech industry but also traditional banks, investment companies, and trust funds. In February 2024, Malta Papaya Ltd. encountered defamation for the first time. Through the professional efforts of the company's management, marketing and PR departments, financial and reputational risks were minimized. The case of Papaya Ltd. drew the attention of British journalists, who conducted fact-checking, an independent journalistic investigation, and expertise with specialized expert Oliver Pahnecke (PhD, MDX; LLM, CEU). This led to articles being published in the Western Morning News, Finance Monthly, and several other publications.

Furthermore, in 2023, the scientific article "Exploring Online Financial Misinformation and Its Consequences: A Computational Perspective" was published and is accessible to everyone. The key conclusion of the article emphasizes the concept of self-defense. In this case, science validates what is observed in practice. That is why Papaya Ltd. is taking the initiative to establish a specialized expert organization that is can, among other roles, assist interested FinTech projects in effectively protecting themselves against defamation.

"The essence of the initiative is to put into practice the foundational principles of Romano-Germanic law. We are accustomed to the rule of law in traditional Europe, as it should be. I would like everyone to remember this and keep it in mind. That's why it's the responsibility of those making accusations to back them up with evidence. Unfortunately, we're seeing a growing number of cases where accusations are thrown around without any attempt to prove them, relying on personal opinion rather than facts. This trend is incredibly harmful to the FinTech industry," - Dmitrijs Panurskis, owner of Papaya Ltd. 

Contradictions

Every FinTech project operating in good faith and complying with regulations understands the frequent contradictions encountered in practice. These discrepancies often revolve around varying interpretations and implementations of laws and directives set at the European Parliament in Brussels. While the rules are universally defined, individual countries and their regulators may have differing perspectives on their application. This divergence in interpretation and enforcement creates contradictions for FinTech players. Papaya Ltd. argues that establishing a mechanism to address these contradictions could foster faster and more efficient development within the FinTech market.

"In my opinion, initiatives like these indicate market maturity. These processes are bound to happen. The FinTech market faces its share of typical obstacles and challenges. If such a project is implemented, it will be beneficial for all—market participants, customers, and the EU economy," expressed Dmitrijs Panurskis, owner of Papaya Ltd.


Conclusions

What neobanks and FinTech companies need, therefore, is a level playing field. However, these emerging financial institutions should not passively wait for changes within a system designed for traditional banking. Instead, they should proactively engage with policymakers and other stakeholders to stay updated with the rapidly evolving digital landscape. They must develop strategies focused on education, oversight, and enforcement.

To achieve this, financial service providers should strengthen their relationship with the media to ensure accurate reporting and collaborate with regulators and governments to exert greater influence on policy development. This is why Malta Papaya Ltd. deems it essential to establish a specialized expert organization to enhance the efficiency of the FinTech market.