During Thanksgiving week, tech developers from startups and banks converged on Vilnius to attend Fintech Inn, a conference in its fourth year situated in the Lithuanian capital. From the air, you can see a substantial business center, separated, by the Neris River, from Vilnius’s stately Old Town. On the outskirts, near Vilnius airport, a large blue IKEA warehouse completes the picture of a growing city rounding the corner into the twenty-first century, a century where digital technology can spring up almost imperceptibly around baroque European cathedrals and the occasional Americanized golden arches.
On a car ride in Old Town, a man from a Swedish bank told me how he made it to the Stockholm airport for his flight earlier that day, only to discover that he had brought with him his old, expired passport. He had to go back to his house to get his new one and reschedule his flight. There was something antiquated about this problem (I had a similar concern on my trip from New York). The world of global communication is still in transition, and emerging solutions around financial technology – blockchain-based distributed ledgers, for instance – offer disruptive possibilities not just for business but for governance.
These possibilities lie in the use of modern computing power to enable secure peer-to-peer transactions, the entire history of which is regularly updated and distributed across a network of users, instead of stored and accessed from a single source that could be breached or manipulated. This technology offers an alternative source of trust, autonomy and privacy that is already disrupting traditional banking by eliminating the delays and excessive costs associated with moving money around and paying for things.
It’s getting easier and cheaper for wage workers to send money, via app, to family members in another country. Yet, global citizens today are locked in this transitional stance with one foot in the past. The roadmap to the future is marked by cities of all sizes with a global vision and the determination to carry it out.
In Lithuania, the rise of the country’s overall tech industry is paralleled by the growth of Fintech Inn. Attendance grew from just 300 participants in 2016 to over 3,000 today. The event is led by MITA, the Lithuanian government’s agency for Science, Innovation and Technology and head of the fintech innovation (“Fintech LT”) project. Last year, the country saw a 69-percent increase in licensed fintech startups and they placed second in European Union members, with 113 such licenses in 2018, behind the U.K.’s 146. (Lithuania joined the EU in 2004.)
Fintech LT Project Manager Vaiva Amule told me: “One of the goals [of Fintech Inn] is to attract international fintech companies who could potentially settle in Lithuania. We invited these to the conference as participants or speakers and arranged some meetings with regulators, industry players and other institutions. Another goal was to help Lithuanian startups to grow and strengthen their businesses.”
She added, “We encourage companies to have a stand or booth free of charge at our expo zone and use the B2B platform to gain exposure in front of future clients or partners.”
The conference was held over two days, with dozens of presentations and talks on three stages, at Vilnius’s convention center, LITEXPO. The President of Lithuania, Gitanas Nauseda, delivered a welcome address to kick off the conference.
On the evening prior to the first conference day, a high-level evening session called 17+1 was hosted in Old Town at MO Museum, an art museum opened just last year and designed by Daniel Libeskind. This event brought together Lithuanian regulators and tech leaders from 17 European countries, along with their counterparts from China.
“The overlap between the conference and the high-level forum was an exclusive opportunity to meet top officials from financial regulators of different European jurisdictions in person and in one place,” Amule explained. “It is a big advantage for fintech companies with plans for expanding their business across Europe.”
She stated, “Mouth-to-mouth played an important role here. Our embassies in other countries shared the details of the event and acted as a link with the local fintech ecosystems. We also asked players in Lithuania to invite speakers because we know that they are well connected and informed about who can bring value to the conference, including people that could become potential partners or clients in the future. There is no better way than involving the fintech ecosystem itself.”
Success breeds more success. The official agency for foreign direct investment and business development, Invest Lithuania, chose fintech as an industry to build an ecosystem around. This community approach is holistic and includes a technology-focused workforce and political leaders who are enthusiastic about developing tech.
According to the agency, over 2,600 people in Lithuania work in fintech at over 170 companies. Overall, there are 31,500 IT specialists in the country.
UK-based Market Orders, which offers a fully digitized supply chain for independent jewelers, is looking to Lithuania to recruit workers, and also to potentially open offices there in the future.
HODL Finance, a global cryptocurrency-backed loan service, has deep roots in Vilnius. Co-founder & Managing Director Vytautas Zabulis helped organize the first Fintech Inn three years ago. This year, the number of companies participating has more than doubled from 2018.
Mantas Katinas, General Manager of Invest Lithuania, told me that the technology spirit of the community extends beyond fintech.
“Technology is our blue ocean strategy,” he said. “And it doesn’t matter where you sit. Now we see the fruits of this trend. It seems like in the future Lithuania will be strong.”
He pointed to the transportation app Trafi, which launched in Vilnius and is now expanding to Berlin, and promises to disrupt the way people get around, even more so than ridesharing apps like Uber.
The same week of the conference, a second-hand clothing marketplace called Vinted made a claim to becoming Lithuania’s first billion-dollar-valued tech unicorn.
“The message is that If you’re coming to Vilnius,” Katinas said, “you will become successful. In fintech, the central bank has a unique selling proposition. You can get support from the central bank to connect to Europe and scale up – you don’t need to develop all on your own.”
As a result, approximately 140 fintech companies operate globally out of Vilnius, making it the largest financial center in the Baltic States. With regulators onboard, fintech licensing gets done two-to-three times quicker in Lithuania than other European countries.
More coverage of Fintech Inn here.