“Sustainable growth of the licensed FinTech sector is a priority of the Bank of Lithuania. We will continue to maintain a regular dialogue with the market, seek to increase the maturity of existing market participants and focus on core operational requirements. We are and will be open to innovations by offering help in the development and testing of new products,” says Simonas Krėpšta, Member of the Board of the Bank of Lithuania.
The Bank of Lithuania pays particular attention to strengthening the compliance culture, i.e. how financial market participants comply with the requirements for the prevention of money laundering and terrorist financing, equity capital, protection of client funds and quality of services, and seek greater personal responsibility of managers. The central bank set out its expectations for electronic money and payment institutions in a letter to managers. High quality standards are and will be applied to new market participants. The Bank of Lithuania invites to discuss licensing issues separately at the event on 9 December.
Mindaugas Liutvinskas, Vice-Minister of Finance, who participated in the event, emphasised that the Ministry of Finance brought together a team of experts consisting of representatives of state institutions and market participants. After conducting an analysis, it aims to prepare recommendations for the guidelines on FinTech sector development in Lithuania in 2022-2027. The recommendations will aim to identify the measures needed to further develop the FinTech sector, increase the use of digital financial services, promote the creation and use of innovation as well as strengthen risk management.
“The Government has a clear political will to maintain and strengthen Lithuania’s position as a regional FinTech hub. The further development of the sector, both in terms of quantity and quality, requires effective cooperation between public authorities and an open dialogue with market participants. We are on the right track, and it is important to move forward in a focused and measured way,” says Mindaugas Liutvinskas.
The year 2021 has witnessed an impressive development of the licenced FinTech sector: the amount of payment transactions carried out by electronic money and payment institutions in the first half of the year was almost 6 times the result of the same period last year and amounted to €122 billion. Companies received €208 million in income from licensed activities – an increase of €168 million compared to the first half of last year. In the area of crowdfunding, over the first three quarters of 2021, more than 265,000 financing transactions were concluded (147,000 throughout 2020), which financed more than 1,000 projects through crowdfunding platforms (totalling 650 in 2020) and provided financing for companies amounting to €80.8 million (€40 million throughout 2020).
“Until now, FinTech sector has been one of those sectors whose sustainable development helps Lithuania to introduce innovative technology-based solutions for financial services. The results achieved are indeed important: the sector generates high added value jobs, while Lithuania is known as one of the financial technology hubs in the world. Agreeing on a common vision and targeted product development is essential for the sector to continue to grow and mature,” says Elijus Čivilis, General Manager of Invest Lithuania.
Additional information
At the beginning of 2021, there were 230 FinTech companies operating in Lithuania, including 175 financial market participants licensed in Lithuania (including specialised banks, electronic money and payment institutions, crowdfunding and peer-to-peer lending platform operators). The companies employed more than 4 000 employees (Invest Lithuania data). The Bank of Lithuania granted 28 licences in 2019, 35 licences in 2020 and 24 licences during 11 months of this year. The Bank of Lithuania is currently examining around 40 applications for FinTech licences.
