How Vilnius became the top hub for European fintech

A forward thinking central bank, favorable business environment and a well developed technology ecosystem made Lithuanian capital one of the most attractive European fintech destinations.

By the end of 2021 Lithuania was the home country to 85 Electronic money institutions (EMIs) - more than a third of all EMIs registered in the EU. It was also home to 54 payment institution license holders, tallying the combined fintech entity count at 139. Although European fintech has already matured, the licensee number in Lithuania has grown by 15 compared to 2020. The Bank of Lithuania is currently examining around 30 additional applications for EMI and PI licenses.

Lithuania also serves as home for one of the most prominent global fintechs - Revolut. Revolut was granted an EMI license in 2018. In 2021 it became licensed as a bank.

“Revolut journey illustrates Lithuania’s policy of attracting fintech investment and fostering their growth. The groundwork for this was laid more than 5 years ago. With straightforward application process, fast application processing by the regulator, clearcut regulatory framework and one of the lowest corporate tax rates in Europe, Lithuanian financial sector was positioned for fast growth”, - says Jonas Nasliunas, Head of Products at financial software development company Inventi.

According to Jonas Nasliunas, all the information required for licensing can be submitted in English. The application process itself usually takes up to 6 months - at least twice as fast as in other countries. 

Plug-and-play fintech ecosystem

New market entrants can also benefit from a well developed financial technology ecosystem.

Based in Vilnius, Inventi is one of the leading back-office financial software developers in the Nordic countries. Anticipating the needs of next generation providers of financial services, Inventi launched a Connector product suite, covering the backbone of fintech operations.

“Fintechs move fast. In this industry speed is a competitive advantage. We wanted to complement the streamlined application process with a quick way to cover the technological groundwork and launch business operations”, - tells Jonas Nasliunas.

Inventi Connector suite provides fintechs with access to the Single European Payments Area (SEPA) and integrates with systems of State Tax Inspectorate and Centre of Registers for regulatory compliance. 

“With our Connector suite, new market entrants do not need to develop integrations from scratch or worry about regulator reporting requirements. The infrastructure is already here, it’s a plug-and-play approach, where you can comfortably lay out the groundwork for your operations using off-the-shelf solutions, devoting full attention to growing your business”, - adds Jonas Nasliunas.

Software for fintech startups

Revolut is also an Inventi client. The startup, now valued at 33 billion USD, utilizes Inventi STI Connector to submit reports to the State Tax Inspectorate.

“Revolut aims to provide its clients with fast and quality solutions – we expect the same efficiency from our partners too. Collaborating with Inventi helped us streamline the State Tax integration process, accelerating our further service development”, - says Chief Revenue Officer at Revolut Raimonas Berniunas.

Since its inception in 2011, Inventi has aimed to serve the needs of large financial institutions for mission critical software development. The company lists Danske Bank, Luminor, SEB and other major banks among its key clients. Now they are accompanied by an ever growing list of fintech providers like Mambu, SME Finance or GF Bank.

According to the Head of Business Development at Inventi Asta Meskereviciute-Ghorbal, services for fintech startups now account for up to 30% of Inventi business. 

“Coming from a legacy banking platform environment, we are uniquely positioned to support the development of innovative fintech products. KYC, AML, onboarding, multiple inter-banking platform integrations - we’ve done it all. Understanding how it all works, this extensive industry expertise, is essential when you are building something truly innovative from scratch” , - adds Asta Meskereviciute-Ghorbal.