Lithuanian gov’t unveils five-year plan to cement status as fintech leader

Ranked number four in the Global Fintech Index Ranking – and with more than 260 fintech companies and 7,000 professionals – Lithuania is an industry leader in continental Europe. Now the Baltic country’s government is seeking to secure this position with a new five-point plan.

In 2014, Lithuania had 55 fintech enterprises – by 2021, that number had surged to 265. The government’s “Lithuania 2023-2028 Fintech Strategy” aims to secure the country’s place as Europe’s pre-eminent fintech hub.

New strategy seeks to ease bureaucratic burden

Lithuanian Finance Minister Gintare Skaiste said the government wants to nurture domestic talent and streamline migration procedures for foreigners, to make Lithuania an appealing destination for professionals, The Fintech Times reports.

The five guiding principles of the plan are: prioritising the enhancement of Lithuania’s fintech sector; drawing innovative fintech solutions to Lithuania; establishing Lithuania as the pinnacle of fintech excellence; ensuring Lithuania remains a secure and dependable jurisdiction; and gaining universal recognition as a European fintech hub.

The strategy outlines key performance indicators, including a targeted 30% annual growth in fintech revenue, a minimum of 35 million fintech clients served, and a reduction from 62% to 30% in the ratio of fintech companies facing talent shortages.

Central bank – fintech enhances country global image

Bank of Lithuania board member Simonas Krepsta told the The Fintech Times “more than 25mn Europeans are benefiting from the financial services of companies licensed in Lithuania.

“Fintech… companies have had a positive impact on the competition and accessibility of financial services, enhancing Lithuania’s global image,” he said.

Crowdfunding is “undergoing regulatory transformation from the national to EU level (and) seven companies have obtained pan-European licenses, opening new business opportunities”, he said. Lithuania’s central bank “allocates the greatest attention to areas with the highest probability of risk”, Krepsta added.

Risk key issue in new strategy

Lithuania currently ranks as the eighth lowest-risk jurisdiction on the Basel Index, which assesses global risks of money laundering and terrorist financing. 

However according to the new strategy, supervisory authorities and the entities they oversee will bolster efforts against financial crimes and fraud.

Meanwhile the Lithuanian Finance Ministry has pledged to analyse capital-raising issues hindering fintech firms, enhance efforts to attract international investors, and broaden business support measures.

Non-profit praises collaboration between governmental and fintech entities

Lina Zemaityte-Kirkman, head of non-profit start-up mentor company Rockit, said “a key driver (of Lithuania’s success) is the effective collaboration between governmental institutions and fintech entities, fostering an environment conducive to innovation.

“Maintaining high positions in the Basel Index underscores the nation’s commitment to financial stability, while an unwavering focus on Anti-Money Laundering and compliance ensures sector maturity,” according to Zemaityte-Kirkman.

According to Krepsta, one of the main challenges Lithuania now faces is how it approaches the crypto industry and the upcoming Markets in Crypto-Assets (MICA) Regulation.