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Lithuania

Open Banking

Open Finance

The Baltic country of Lithuania has developed a strong Fintech movement, with many UK firms setting up European bases in Vilnius.

According to Merchant Machine, 78% of Lithuanians had access to the internet in 2021. Of all Lithuanian citizens using the internet, 79% use the internet for online banking, which is 13% above the EU average. Additionally, Lithuania ranks 13th in the integration of digital technologies and 10th for digital public services among EU countries.  

Lithuania falls under the PSD2 legislation and has adopted Berlin Group’s NextGenPSD2 standard.¬†PSD2¬†is a European Directive that regulates electronic payment services and was implemented in all EEA countries in 2016 and went live in September 2019.¬†

In their European Open Banking league, Yapily ranked Lithuania 5 out of 18. Similarly to Estonia, Lithuania has developed a strong Fintech movement, with many UK firms setting up European bases in Vilnius. Fintechs are expected to continue the push for innovation, supported by regulators and banks. Lithuania, in a similar way to Estonia, has made authorisation guidelines simple and easy to understand, which has supported market entrants. However, more attention needs to be paid to standardising consumer journeys and developing a set of regulatory guidelines specific to UX would be a considerable improvement for the market. Yapily highlights that Lithuania’s position as the second-largest Fintech hub in Europe, after the UK, is no accident. It is the result of deliberate policy and collaboration between the Government and the central bank. This continues to attract many TPPs from across the continent, with over 25 AISPs and PISPs registered in the region. In Lithuania, there’s an appetite for innovation across the breadth of the financial ecosystem, not just among the Fintech community. The fact that the Bank of Lithuania considers using Account Information Services (AIS) for reporting shows a deep-rooted understanding and interest in the distribution of this technology. This positions Lithuania well for playing a leading role in the evolution and success of Open Banking across the EU, not just from a licensing perspective but a cultural one, too. The country also boasts the highest API performance success rate in this year’s league table and secures the second-highest payments conversion rate behind the UK, illustrating continued investment in API quality and payments infrastructure.

The EU Commission has announced its intention to adopt an Open Finance regulatory framework.

Lithuania has an¬†interactive APIs developer portal¬†‚Äď the aim is to provide a sandbox environment for interested financial market participants to create common market API standards for different banking products and services. Banks, Fintechs, and other stakeholders could exchange their ideas, concerns, and¬†interoperability issues¬†as well as test them in one place.

According to The Global Findex Database, 94% of Lithuanian adults had bank accounts in 2021. Lithuanian consumers are particularly interested in the benefits that Open Banking payment initiation services can provide. In a recent study researching the Open Banking adoption among consumers, 29% of Lithuanian consumers were interested in receiving intelligent assistance to manage payments, and 28% were interested in having their data used to develop convenient new payment methods.

Yapily highlights that Lithuania’s position as the second-largest Fintech hub in Europe, after the UK, is no accident. It is the result of deliberate policy and collaboration between the Government and the central bank. This continues to attract many TPPs from across the continent, with over 25 AISPs and PISPs registered in the region.

265 Fintechs¬†operated in Lithuania at the end of 2021. The same year,¬†Lithuania ranked 10th in the global Fintech ranking. In addition, it has one of the lowest risks of money laundering ‚ąí in the world, it ranked 9th in the Basel Institute‚Äôs ranking. In a¬†recent survey, the¬†biggest potential of the Fintech sector in Lithuania could be seen in the area of payments (64%), digital banking (56%), and compliance and regulatory solutions (54%).

Lithuania ranks 20th in human capital among EU countries in the Digital Economy and Society Index (DESI) 2022. The human capital measures digital skills, the proportion of employed people working as ICT specialists, female ICT specialists, and enterprises offering ICT training.

Lithuania has an¬†interactive APIs developer portal¬†‚Äď the aim is to provide a sandbox environment for interested financial market participants to create common market API standards for different banking products and services. Banks, Fintechs, and other stakeholders could exchange their ideas, concerns, and¬†interoperability issues¬†as well as test them in one place.

Lithuania has adopted the Berlin Group’s NextGenPSD2 technical standard.