Fintech: Europe’s fastest growing Fintech hub sees a shifting away from banks

The Fintech industry in Lithuania has been on the rise, becoming the fastest growing in the European Union. 

The surge in usage of Fintech technologies has been due to a shift away from the traditional banking system, as more people looked for alternatives during the pandemic and the lockdowns. Transactions carried out over the internet have also been on the rise as more online solutions adopted online banking solutions to help process their transactions.

The country’s financial industry has been dominated by Nordic lenders such as SEB Bankas AB and Swedbank AB, but the latest push to disrupt the banking system by offering fast licensing to all EU members is expected to give an edge to the Baltic country.

Growth of the Fintech industry

Lithuania’s share of transactions using Fintech companies rose to 27 percent in the last one year. This was a jump from a share of only 11 percent in 2019. 

This rise has led to the country being ranked the fourth in the world for Fintech ecosystems. Outgoing Central bank Governor Vitas Vasiliauskas lauded the efforts made by the country, stating that the rise had proved that the ecosystem for the industry existed in the country. He also added that he expected to see changes in competition for financial services in the country.

Vasiliauskas also noted that the industry was still in its infancy and more time was needed for the industry to grow to a level that can challenge the traditional bankers. However, he noted that when it came to transactions being carried out, there had been consistency in the rise of the Fintech industry and the role of the banking sector had been on the decline for such payments.

One factor that cannot be ignored when talking about the exponential growth of the Fintech industry is the pandemic. During the pandemic, a lot of people adopted online shopping, which increased the demand for online payment gateways, pushing Fintech companies to their growth in popularity.