Bank of Lithuania
2017-08-07
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Companies designing innovative financial products and business solutions will be provided with the possibility to test them in a new regulatory sandbox that is being created, with the Bank of Lithuania supervising and providing consultations.

‘In creating an innovations-friendly space we aim to provide the best possible conditions for the development of financial technologies and creating the most favourable environment for FinTech companies in the entire Nordic-Baltic region,’ said Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania.

According to him, ‘an ambitious goal has been set; we therefore want to hear the feedback from the sector: during a public consultation we invite you to submit your suggestions so that we can start as soon as possible with the new regime fostering the development of new financial products and solutions meeting public needs’.   

Companies operating in a testing regime will, in the real, regulator-supervised environment, be able to offer consumers innovative financial products and test business solutions, while the Bank of Lithuania will provide them with consultations. The plan is for it to be possible to apply certain alleviations to the testing area participants, agreed on with the regulator. For instance, companies would be subject to simplified establishment, licensing procedures; some supervisory requirements would temporarily not be applied. Should financial innovations pay off, companies would be able to start operating in normal conditions.

Both incumbents and newcomers to the financial sector will be able to use the advantages of this testing space. Companies would be selected for the testing space based on certain criteria, the most important of which are the innovative character and benefits of a product or solution for the public.

As Lithuania implements its aim to become a FinTech centre in the Nordic-Baltic region, the Bank of Lithuania, jointly with other institutions in the country, is creating an environment conducive to the establishment of financial companies and design of new products in Lithuania. The following measures are already applied: 

  1. Relatively easy and low-cost authorisation process: following submission of all necessary documents, it takes only 3 months for the Bank of Lithuania to take a decision on the issuance of an electronic money or payment institution licence. In other EU countries, the process may take 12 months and more.
  2. Access to the Bank of Lithuania payment infrastructure for non-banking sector companies planning to provide payment services, thus avoiding a middleman.
  3. Newcomer programme. The Bank of Lithuania applies a one-stop shop principle for meetings and consultations with potential financial market participants. Prior to launching a business or a new product, investors may check whether their plans are in line with legislative requirements. Information on licensing opportunities in Lithuania is presented on the Bank of Lithuania website under the section How to obtain a licence.
  4. Specialised banking licence. In order to establish a bank in Lithuania that would provide usual banking services, the lowest initial capital requirement in the entire euro area – EUR 1 million – is applied. This is five times less than the requirement applied to banks that provide the full range of services, including investment ones. 

Development of a FinTech-conducive regulatory and supervisory environment as well as fostering of innovations in the financial sector is one of the Bank of Lithuania’s strategic directions for 2017–2020.

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All current and future financial market participants, organisations uniting them, and other persons concerned are invited to take part in the public consultation, and submit opinions and proposals to the Bank of Lithuania via email sandbox@lb.lt by 30 September 2017.