Fintech (financial technologies) is an industry where companies use new, advanced technologies to compete with traditional players in the financial market. In simple words, this is the use of new business models and applications and software developed on their basis.
The main players in this market are start-ups. Fintech companies in some industries can already compete with classical banks, because their services are available to a wider circle of people, and due to the use of advanced technologies, they are cheaper and easier to adapt to changes in the market. There is a place for fintech in any industry, because there is no business today which can work without financial technologies - as any product needs to be sold to the end consumer.
Fintech in Lithuania
Within the framework of the European Union, the friendliest regime for fintech companies has been created in Lithuania. The Central Bank of Lithuania has simplified the regulation of this industry, and since 2017, a simplified banking license (SBL) has been issued in Lithuania, the difference is that it does not allow the provision of investment services. The authorized capital of the company operating under this license is 1 million euros, which is significantly lower than in other European countries. Currently, it is possible to obtain such a license in Lithuania remotely. Unlike other states, simplified regulation allows institutions to respond to requests quickly, making the market quite flexible.
The Central Bank of Lithuania also gives payment service providers access to the Single Euro Payments Area, allowing them to work not only in Lithuania. All this made Lithuania very attractive for fintech companies from all over the world.
In Lithuania, fintech start-ups have the opportunity to use regulatory sandboxes, i.e. test their products in a real environment with real customers. And in case of problems, state institutions will help to deal with the shortcomings of the new product.