Lithuania is aiming to become one of the pioneers in fintech technology as interest in the concept ramps up. Last year, it embarked on a strategy to lure fintech firms to move their operations inside its borders. The result of the UK’s Brexit decision significantly boosted the campaign.
According to Reuters, Lithuania has granted 18 operating licenses to foreign fintech firms during 2017. There’s an additional 16 applications already under review, making it one of the hottest areas on the continent for next-gen banking tech. Amongst the new license recipients is Revolut, a UK-based firm that is now seeking to retain access to European markets.
To differentiate itself from alternative hosts, Lithuania’s central bank has streamlined its license approval processes and adopted a pro-fintech attitude. Foreign companies looking to enter Lithuania can do so two to three times quicker than if they applied to a rival country. A permit to provide online payments can be received within three months and a full banking license in under six.
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This is helping Lithuania to hold its own against the UK and regional tech hub neighbours. Estonia, Latvia and Sweden are all innovating in the fintech sector. This is resulting in the Baltic States and Scandinavia becoming a focus point for technological development, affording easy access to continental Europe that’s free from the risks of Brexit.
Nonetheless, the UK’s likely to remain a rival fintech hub after Brexit. Aware it could lose key innovators in future technology, the UK government is making fintech development a priority as it plans life after Brexit. The country’s established economy will allow it to retain attention from new providers. The UK’s high population density also makes it a target for fintech firms specialising in consumer technologies such as mobile payments.
With companies now preparing for the realities of a post-Brexit future, investment in the UK is more uncertain though. With alternative nations like Lithuania offering compelling benefits, the Brexit impact will increase diversification in fintech as more areas become digital banking hubs. Lithuania’s fintech scene is picking up momentum, making it likely new firms will continue to apply for licenses as the talent pool gets established and more companies move in.
