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Managing Risk

Q - Could you give us a brief overview of Kyte and your key services?


We provide assurance and risk management services and cater to financial institutions and e-commerce, but around 90% of our clients are from the gaming industry. We identify areas of risk for companies, and I am quite proud of having been the first individual – while working with Deloitte – to be accredited by the Malta Gaming Authority (MGA) to carry out audits on their behalf. Auditing most of the gaming companies in those days before they got their licences, gave me good exposure to, and knowledge of, the market. There are many risks related to today’s online world with an increasing number of companies processing credit card data as part of their business. We were the first and still are the only company in Malta with Payment Card Industry Security Standards Council (PCI DSS) accreditation, which means we can certify companies that process, store or transmit credit card data as being PCI compliant. Kyte is a Qualified Security Assessor (QSA), which involves a lot of continuous training, and annual requalification training ensuring we are constantly up to date with technologies and requirements. We also provide other services such as internal auditing, IT auditing, data protection, solving anti-money laundering (AML) issues – which we envisage to be a major  issue  once the 4th AML Directive is transposed into Maltese Law and which makes gaming companies obliged entities.


Q - You had a long career working in big successful organisations, what led to the decision to set up your own company?


Throughout my career I have acquired very specific skills. When demand for those skills and knowledge was rising, I wanted to use them to the best of my ability. I was a banker by profession and spent twenty years at the Bank of Valetta. I spent ten years in internal audit and seven of those years in IT audit, going from mainframe offline, mainframe online to internet banking. I’ve seen the full evolution in this field from the Stone Age to what we have today. Then I moved to Deloitte, where I set up a new service line which introduced me to gaming. I had created a control system for a client, which seems to have eventually been adopted as the template for control systems.  A big part of the decision to set up my own operation was the continued evolution of the iGaming industry and my increased knowledge of the sector which at that time was quite unique. I had also got more involved with PCI as we had started to get quite a few requests. However, I was not able to get as involved as I had wished and was in a position where I possessed all this knowledge and skills that were in high demand and couldn’t exploit them to the fullest. We now have quite a good number of PCI and gaming clients and it seems I made the right decision. With the creation of Contact Advisory Services Ltd, we are now also in a position to provide gaming customers with all the services they need to create and maintain a company and a license.

Q - How have things changed in your industry in the last few years, and what developments do you see on the horizon?


It is no secret that the banks have become a nightmare to deal with in terms of the length of time it takes to open bank accounts for clients and the amount of information they require. It is a changing regulatory landscape, and even EU citizens are being treated as outsiders, which I find very hard to accept. The process can be very slow and painful at times, but eventually we always get there. In the gaming sector, there was always fear that Malta was going to lose its attraction as a licensing jurisdiction as more and more EU countries introduced national licensing regimes. However, it seems Malta’s attraction as a jurisdiction of choice has survived, and it continues to be one of the better options for operators licensing requirements. However, there are various issues that may continue to affect the sector such as the current debate on changing VAT rules across Europe and the treaty on Match Fixing. For examples, member states that deem certain online gambling activities as illegal want to charge VAT on the very same activity, which is borderline ridiculous. These uncertainties are making companies to just sit and wait for a precedent or an ECJ ruling. In spite of the many issues, Malta has not lost its appeal and business continues to flow in, be it for a gaming licence, the favourable tax incentives, or maybe just for the high quality of life we benefit from.


Q - What are the key challenges facing your niche industry, and what opportunities do you see?


With risk management and information security issues being the hot topics of the day, the biggest opportunity for us is to continue to grow in this niche market and strengthen our position as the company of choice due to our solid expertise and unique accreditations. As for challenges, finding the right people and training them is always a key issue. We work in a highly specialised field, but it is a growing one, but it is still extremely hard to attract the right people who are looking to make a career of an area few understand. It took us over a year to replace one person that left the company. We are a small company, and it is always going to be a challenge to convince someone to join our team. We have tried using recruitment firms, but many do not even understand what we do. It is estimated that there is a global shortage of one million people in this field of work, and it’s expected to go up to two million by 2020. I also give presentations and recently started to teach IT auditing, and I try to explain to students that by entering into this field their future is guaranteed. Another challenge, or an opportunity, is that companies are being required, or rather obliged to implement standards such as ISO27001 or PCI DSS. Auditing against established and International standards is more structured and focused whilst also providing specific parameters on adoption of best practice and increasing overall security of the company’s systems. In this day and age, people rely on assurances that their technology is safe to use.


Q - How do you see Malta evolving in the next five years and what are the key advantages of Malta in terms of your industry?


The advantage of Malta is that it seems to be continuously outperforming most other EU countries. Malta still has a very good quality of life to offer, even if the construction sites are everywhere and the pace of life seems to have increased in the past years. The country has very attractive investment opportunities, a strong economy with hardworking people, and stability on all fronts which will help us grow and develop further. Gaming has certainly given Malta a boost, but we must be careful to keep treating gaming as an important part of the economy – and to avoid the tendency to take it for granted or to try and abuse it. Enforcing standards and best practices, as well as consistently updating and clarifying regulation is crucial to protecting our reputation as a solid and transparent services jurisdiction. There is great potential and an air of optimism, we get good feedback from customers who believe Malta’s gaming regulation is tough but fair, but there is always room for improvement. We must remember that businesses aim to satisfy their own requirements, not only Malta’s, we just have to make sure that our requirements and theirs run in parallel and not in opposite directions. If we lose that balance, then they will stop coming. We need good regulation, a gaming authority that is consistent and fair, and a banking system that knows how to manage risk and appreciates we have to move in the same direction. In the next few years, Malta also needs to take the right measures to ensure that there is a pool of trained and skilled personnel for the gaming industry as well as the financial services industry, which is a sector that has grown very quickly.


Prepared by Alan Alden, Director of Kyte Consultants Ltd


Featured in - 17th July 2015

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