This Baltic state, a member of the eurozone with a population of nearly a third of London’s population, has become a European leader in innovative financial services and has more than 230 groups in the sector. More than 30 of them are British.
Revolut Bank, headquartered in London, was one of the first to enter the Lithuanian market shortly after the 2016 Brexit referendum.
“Lithuania is currently a distribution center for European operations after Brexit,” Virgilius Mirkes, CEO of Revolut Bank in Lithuania, told AFP.
“We opened our office in Vilnius in 2017, after analyzing the favorable conditions for financial technology here,” he explains, emphasizing the fast licensing process and the competent workforce in the country.
According to the government organization Invest Lithuania, the sector currently employs more than 4,000 people across the country, an increase of more than 18% compared to 2020.
“During the Brexit transition period, financial technology groups began to look for a foothold in the Old Continent, and Lithuania was one of the main options,” said Ekaterina Govina, a senior official at Lithuania’s central bank.
Lithuania says it can process applications for the necessary licenses in just three weeks, faster than any other EU country.
The central bank has issued a total of 118 licenses in the financial technology sector, which allow companies to operate anywhere in the EU. According to this indicator, Lithuania is ahead of Germany with 77 licenses and France with 76 licenses, according to a report by Invest Lithuania.
However, the UK remains the clear champion with 610 licenses.
The Central Bank of Lithuania has built a mechanism that allows financial technology groups to test their innovations.
“It was a beacon for companies looking for a cure for Brexit,” she said.
Although Vilnius does not offer as many attractive things as a big city like London, it is still difficult to reach today due to the restrictions imposed in the fight against the pandemic, the internet there is fast and the workforce is attracted to technology.
Revolut has nearly 200 employees in Lithuania, including in the development of products and services for customers, and in the words of Mirkes intends to “continue to expand its operations here.”
Need for a firm approach
However, the start of financial technology also carries risks.
According to Sergejus Muraviovas, head of Transparency International in Lithuania, “the ambition to become a financial technology hub must be accompanied by a responsibility to prevent money laundering at another level.”
“A solid approach is needed, based more on the data of the competent supervisory institutions,” he told AFP.
Ms Govina claims that the authorities are “fully aware” of their responsibilities, given that a license granted in this Baltic country opens the door to the entire European market.
Recently launched in Lithuania, DiPocket Group, headquartered in London, has developed an e-wallet application.
“Brexit was certainly the key event,” DiPocket CEO and co-founder Fedele Di Maggio said.
He is pleased to say that he has found a central bank in Lithuania that is “both strict and solidary”, as well as a workforce “generally fluent in English and with reasonable financial expectations”.
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