AI Safety and Governance in Malta and the European Union in 2026

Zinah Abdaki
6 days ago
3 min read

In 2026, payments across the European Union are expected to be increasingly instant, seamless, and secure, rather than premium features. The European real-time payments market is estimated to reach around USD 7.96 billion in 2026, with continued strong growth as instant and account-to-account rails expand across Europe. Real-time and account-to-account adoption is a cornerstone of modern digital money movement, driven by regulatory harmonisation, consumer expectations and enterprise use cases for liquidity and settlement efficiency.

As adoption grows, artificial intelligence plays a greater role in areas such as payment routing, authorisation, compliance automation, fraud detection and anomalous behaviour spotting. In this context, AI governance and safety are now essential, not optional. Financial institutions must demonstrate robust controls, transparency and accountability for AI systems that affect critical payment decisions, operating under both local and pan-EU regulatory expectations.

Here are four key developments shaping how Malta and the European Union are approaching AI safety and governance in the financial services sector in 2026.

1. The EU AI Act Is No Longer Just a Directive

The European Union Artificial Intelligence Act is the first comprehensive legal framework governing AI use across all member states, including Malta. It uses a risk-based classification to determine obligations, from prohibitions on certain hazardous systems to strict controls for high-risk use cases. High-risk systems now face compliance deadlines in 2026, requiring robust risk assessment, documentation, human oversight, and post-market monitoring.

Finance sector players must interpret the AI Act alongside existing regulatory requirements like GDPR and digital operational resilience rules, aligning their AI governance frameworks accordingly.

2. Transparency and Auditability Are Non-Negotiable for Payments AI

Pay-related AI systems must produce clear audit trails and be explainable. Regulators and auditors in the European Union expect institutions to justify how AI algorithms make decisions, including authorisation, risk scoring and anomaly detection, and to maintain records demonstrating compliance throughout their lifecycle.

This expectation stems from broader digital risk and operational resilience frameworks in finance, where opaque decision logic is no longer acceptable for systems that could affect liquidity, settlement, consumer funds or fraud mitigation. As a result, AI models must be documented, tested and explainable even when they operate in real time.

3. Malta Continues to Align National Governance With EU Standards

Malta has been aligning its domestic regime with European obligations, applying the same risk-based and transparency-oriented approach that the AI Act promotes. Local implementation efforts, backed by authorities such as the Malta Digital Innovation Authority, emphasise certification pathways, ethical design principles and sandbox environments for AI systems.

For payment providers authorised in Malta and operating throughout the European Union, governance frameworks must be consistent with pan-EU expectations. Boards, compliance functions and technology teams must work in concert to ensure AI usage meets both regulatory and operational standards.

4. Supervisory Bodies Are Preparing Enforcement and Practical Guidance

Supervisory bodies are now moving beyond legislation and into supervisory preparation and practical guidance. European Union financial regulators, including the European Banking Authority, are developing guidance on how the Artificial Intelligence Act applies to banking and payments. This includes work on identifying high-risk use cases, aligning expectations around governance, auditability, and documentation, and supporting consistent supervisory approaches across member states.

At the same time, national regulators and the European AI Office are coordinating interpretation and supervisory readiness at the European Union level. This coordination is intended to reduce regulatory fragmentation and provide clearer expectations for institutions deploying advanced artificial intelligence systems, including large language models, as these technologies become embedded within regulated financial services.

What This Means for Finance Leaders

By mid-2026, AI governance is expected to be baked into internal risk frameworks, supported by documented audit trails and governance structures. Boards and senior management must own AI risk decisions and be prepared to justify both governance frameworks and individual AI decisions to supervisors.

To explore how AI is being governed in payments in practice, join industry leaders, regulators, and leading AI and RegTech solution providers at the NextGen Payments and RegTech Forum - Malta, taking place on 19 February 2026 at the Hilton Hotel, St Julian’s.

Book now to enjoy a 10% discount before it expires! Contact us at info@qubevents.com to claim the discount!

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By: Zinah Abdaki, CMO at QUBE Events