2021 was indeed a record year for the Fintech sector in Lithuania: the number of employees and revenues smashed previously set records, and 265 fintech companies are already calling Lithuania home (FinTech in Lithuania ’22 map by Rockit).
When it comes to licensed entities (payment institution, electronic money institution and special banking license holders), Lithuania ranks 1st in the EU, with a total of 147 licensed fintechs. Second ranking France has 90 licensed entities, Germany – 86, and Netherlands have 84.
However, the strength lies not only in the number of licenses issued but in the overall level of the industry that has a strong focus on risk management, diversity, and long-term partnerships.
The growth in the number of companies (both licensed entities and companies that develop IT solutions) is complemented by a growth in revenue and employees across the sector. This serves as proof that Lithuania attracts active, growing fintech companies with tangible value, and is not considered for licensing only.
Increased number of employees and revenues
In 2021, 5,900 people in Lithuania were already working in fintech, which is a 48% increase compared to 2020. 97% of surveyed Lithuania-based fintech companies also claim they plan to keep on hiring in 2022. Fintech companies have proven, time and time again, that Lithuania is a stable partner for business growth. By establishing such core competencies as compliance, customer onboarding and support, product development, business development, and sales here, the majority of international fintechs that operate in the country trust Lithuania with the essential functions of their business.Gintarė Bačiulienė, Head of Technology Team at Invest Lithuania
With well-established brands expanding and newcomers choosing Lithuania for their operations – fintechs have generated more than 500 million EUR in revenue in 2021. That shows an increase of over 25% compared to 2020.
While payments remain the primary function for Lithuania-based fintechs (31%), the market is getting more diverse: 18% of companies are working in financial software, 11% in lending, 10% in savings and investments, and 10% in digital banking.
“More diversity comes hand in hand with a broader variety of competencies in the talent pool, and this is only a start: the Bank of Lithuania embarked on a mission to develop the country’s potential for Fintech solutions for capital markets, with a special emphasis on Crowdfunding, Wealthtech, and Green Finance sectors. So we have a lot to look forward to,“ said Gintarė Bačiulienė.
More focus on risk management and solid partnerships
Another sign of a healthy and responsible fintech ecosystem is attention to risk management. Lithuania established an AML Centre of Excellence in 2021 and ranks 9th globally among the lowest risk jurisdiction (AML Basel Index).
The number of professionals in the field is also steadily increasing, with more than 10,200 specialists qualified to work in AML/CTF, compliance or risk management related fields. 86% of the surveyed fintechs claim that last year they hired specialists with such qualifications.
Partnerships inside the industry and with different fields help companies diversify the offering of their products and create sustainable bonds in the sector. 77% of companies reported they have at least one fintech partner.
Partnerships are also thriving outside of the private sector, as Lithuania ranks 1st for university-business cooperation in Central and Eastern Europe. Here, the country’s best universities are partnering up with fintech companies for research and educational goals.
Head of Rockit, Lina Žemaitytė Kirkman, notes that with maturity and growth, fintech ecosystem brings financial inclusion too: „I am sure this will lead companies and services to the transformation that would ensure financial stability for many customers. And while it can take a longer time for more traditional players in the finance sector to become more inclusive, Fintechs’ agility allows them to lead the way, which is very much needed in today’s context.“