Lithuania in anticipation of the growth of companies related to financial technology’s
In November, Lithuania hosted the largest financial technology conference in the Baltic countries – FintechInn, which was attended by over 1,300 delegates participating. For several years, world-class experts have been striving to increase the rate of innovation in Lithuania.
In particular, the Minister of Finance of Lithuania, Vilius Šapoka, said that Lithuania is one of the most attractive countries for startups, research and development (R&D) in the field of financial technologies.
“In such a short period of time, Lithuania has become the fastest growing center of financial technology, and it is only gaining momentum. I don’t know a country where it’s easier to start any kind of activity in the field of financial technologies”, said Mr. Šapoka in his opening speech at the FintechInn conference, adding: “We offer tax holidays for startups, fast licensing processes, a friendly support program from Central Bank for new comers. In addition, if you conduct research activities in Lithuania, you will be able to reduce your costs by three times the original amount”.
International organizations also note rapid progress in various areas of the country. So, starting last year Lithuania moved from 16th to 14th place in the recent DoingBusiness rating. Moreover, the country ranked first in the National Cyber Security Index thanks to the restructuring of Lithuanian cyber security legislation, taking effective measures to address cyber challenges, and managing in cyber crisis situations.
The Lithuanian Fintech cluster now includes almost 100 payment and electronic monetary institutions. Only in the last year their number has tripled – a similar increase is expected in 2018. Most FINTECH companies engaged in the activities related to the implementation of payments, the release of electronic money and P2P platforms. Half of them offered payment solutions to businesses and consumers directly.
In many countries, regulators often hamper the progress of smaller innovative service providers through more rigid and rigorous bureaucratic processes. In Lithuania, the main regulator is actually the progress’ initiator. Therefore, this year, the international banking journal CentralBanking has chosen the Bank of Lithuania as the winner of the Catalyst award.
During the FintechInn conference, Mr. Vasiliauskas announced that Lithuania now offers one of the fastest and most flexible licensing modes in Europe.
Globally, there has been a huge increase in various financial services. However, Michael McDonough, chief economist at financial products at Bloomberg, calls the current situation a “mystery”: technology can provide people with more benefits than before, but we don’t see many people using it.
“For over a decade, we have seen amazing technological innovations, but what we haven’t really seen yet is something that transfers into really strong economic benefits”, said Mr. McDonough at the FintechInn conference, commenting on global economic issues.
Despite the fact that many modern technological innovations will gain the status of affordable and standard worldwide, the companies still expand the boundaries of opportunities. Some countries are trying to pave their way for such enterprises. For example, recently Lithuania opened its payment infrastructure for non-banking institutions, and now fintech companies can directly, without intermediaries, through the CENTROlink platform gain access to the entire SEPA territory.
In addition, on October 15th, the Bank of Lithuania launched its standard temporary environment, both for existing authorized financial institutions and for newcomers to the market.
“The new organized standard temporary environment provides favorable conditions for the creation and testing of innovative business models, allowing modernizing own set of regulatory tools”, said Vasiliauskas.
This regulated environment allows companies to test financial innovations in real time in the current environment for up to 6 months under the direction and control of the Bank of Lithuania. During this period, simplified rules and supervisory requirements are applied to participants of a regulated scheme. If the activity shows itself well in test mode, companies will be able to start working under normal conditions.
Organized by the Lithuanian Bank, the Ministry of Finance of the Republic of Lithuania, the InvestLithuania and the Agency for Science, Innovation and Technology (MITA), FinTechInn serves as a platform for dialogue on payments, blocking systems and investments.
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