Lithuania is becoming a center of financial technology in the EU

Lithuania is becoming a center of financial technology (fintech). Partly thanks to Brexit, as there is a growing number of British digital financial firms that have applied for licenses to continue operating in the European Union (EU). According to the government agency Invest Lithuania, the Baltic state, which is a member of the eurozone, is the EU leader in fintech. There are already more than 230 such companies in the country, with about two dozen ties to Britain. One of the first to come after the Brexit referendum in 2016 was the London bank Revolut. "Lithuania is currently the center of our European operations after Brexit," Virgilijus Mirkes, CEO of the bank's Lithuanian division, told AFP. "We opened a branch in Vilnius in 2017 after considering a business environment suitable for fint," he noted, pointing to the rapid licensing process and good local talent. The government agency Invest Lithuania estimates that this sector employs more than 4,000 people in the country, which represents an increase of more than 18 percent per year. "During the transition period after Brexit, companies have been looking for an alternative port in the EU and Lithuania has become their primary choice," said Jekaterina Govin, senior supervisor at the Lithuanian Central Bank. Lithuania claims that it can process license applications in as little as three months, faster than any other country in the EU. The Central Bank in the Baltic Republic has granted a total of 118 fintech licenses, which allow companies to operate anywhere in the EU. This is much more than in Germany, where the authorities have granted 77 licenses, or in France (with 76 licenses), according to the Invest Lithuania report. However, Britain is still the first in Europe with 610 licenses. The Central Bank of Lithuania has also set up a "regulatory sandbox", a framework that allows fintech companies to test innovation. "It was a beacon for companies looking for a cure for Brexit," Govin said. Although the capital Vilnius does not offer such attractions as London and getting there is currently complicated by the constraints associated with the new coronavirus pandemic, the speed of the Internet in Lithuania is good and has a technically capable workforce. Revolut Bank employs approximately 200 people in the country, including product development and customer support. Mirkes said the company would "continue to expand its Lithuanian division. However, supporting fintech also brings risks. The Lithuanian branch of Transparency International pointed out that "the ambition to become a center of financial technology is linked to the responsibility to take money laundering prevention to a new level". According to the organization, a stronger approach is needed, more based on data from the monitoring of the institutions involved. Govin noted that the authorities are "fully aware" of their responsibility for ensuring that a license in the Baltic State opens the gates to the entire EU market. Another company that has recently established a European headquarters in Lithuania is the London DiPocket Group, which has developed a wallet application for electronic money. "Brexit was definitely the starter," confirmed DiPocket director and co-founder Fedele Di Maggio. He added that he considered the Lithuanian Central Bank to be "strict and supportive" and described the local workforce as "fluent in English with reasonable financial expectations".