Following Brexit, many UK fintechs are relocating and moving to Lithuania.
Marius Galdikas, chief executive of Lithuanian banking firm ConnectPay, cited the examples of Revolut and Yapily which have both announced they are expanding their operations to Vilnius, the capital of Lithuania.
Galdikas put the trend down to fintechs wanting to leave the UK following Brexit and said some are moving to Lithuania due to the nation’s ability to issue licenses quickly, and its innovation-friendly regulation.
At the end of October, the Bank of Lithuania gave the green light to establish a new Centre of Excellence in Anti-Money Laundering, an initiative uniting finance market players, regulators and the government with the aim to further refine anti-money laundering controls.
Since 2016, the country has seen approximately a 30 percent year-on-year growth in the fintech sector and in 2020 it was ranked as the fourth leading fintech hub in the world.
“Brexit put a hard stop on the continuance of some UK-EU partnerships, and it’s clear that companies would want to retain alliances they have worked very hard to establish, hence the trend in relocation,” said Galdikas.
“Relocating certain services offers assurances that were not, and still aren’t, guaranteed, as implications for UK-resident financial service companies still haven’t been widely discussed.
“The fact that regulators are not only willing but also keen on maintaining a dialogue between them and fintech market players creates grounds to exchange insights from both sides, leading to addressing regulatory issues with more in-depth knowledge of the market.
“This forward-thinking approach towards regulation has had a tremendous impact on our growth too.”
Despite this trend, the UK retained its European fintech crown last year by attracting $4.1bn (£3.59bn) in venture capital, only ranking second globally behind the US.