Golden Age of Financial Technology in Vilnius – What Makes Lithuanian Technology Fascinating to the World
The abundance of technological inventions and achievements in the financial technology (fintech) sector indicates that Lithuania, and Vilnius in particular, is purposefully promoting the development of the sector – Lithuania ranks first in Europe in terms of the number of licensed companies in the financial technology industry. To foster cooperation between the different technology sectors, Go Vilnius, the official Business and Tourism Development Agency of the City of Vilnius, has initiated Vilnius TechFusion, which brings together the Vilnius technology ecosystem. Initiative will serve as a tool for the development of connections between companies and investors from the Life Sciences, FinTech, IT and Communications and Laser sectors to work on joint projects and share their ideas for the future.
We interviewed Tautvydas Tamulevičius, Head of Business at Go Vilnius, to find out about the connection between technology developers, the fintech ecosystem and the importance of relationships. As he put it, if we (Lithuanians) keep it up and carry on with the current projects, the name of Vilnius will be mentioned in global media more frequently.
– What is your assessment of the situation of the fintech industry in Lithuania?
– Fintech is one of the most successful technology sectors in the country, especially in Vilnius, where most of the fintech companies are based. We are the first in Europe regarding the number of licensed companies, and there is no other area where we could enjoy this leadership level. The maturity of the sector is increasing, more and more people are employed.
– How do fintech companies and professionals in different fields collaborate? Do they develop joint projects?
– The size of Vilnius and the interconnectedness of the ecosystem allows for cross-sectoral collaboration, which we call Vilnius TechFusion. For example, we see new solutions for fintech companies, such as facial recognition technologies or risk management solutions, being designed and developed, and new examples of collaboration and new companies, which could significantly impact the fintech industry, continuously emerging.
This can only be achieved because all companies operating in Vilnius focus on the global market and are interested in communicating, exchanging knowledge, solving common problems, increasing their competitive advantage, and helping each other through associations or ecosystem-building events. Policymakers are also involved in this process – the fintech strategy under development is a good example of how the market and the regulator agree on the way forward.
– Do you think the fintech ecosystem in Lithuania is already sufficiently developed, or there is still room for improvement, as the focus is mostly on the capital?
– The ecosystem is evolving naturally. Compared to last year, the number of companies is not growing, but the number of people working in the ecosystem is increasing, and the sector is developing in terms of maturity. It is difficult to say whether other cities in the country can become more involved. However, the main reason why investors choose Vilnius, and not only in fintech, is a talent pool concentrated in Vilnius. When competing strategically with other fintech hubs such as Frankfurt, Amsterdam or London, it is not a bad idea not to fragment your competitive advantage and to specialize within the country.
– What is the situation of the sector in terms of staff? Is the number of people choosing this field increasing/decreasing? Is the demand growing?
– According to our data, more than 4,800 people are working in the fintech ecosystem in Vilnius. This number has been growing at an average rate of 30% over the last two years. The demand is even higher – there are plenty of job offers for AML specialists, developers, and lawyers. The average wage in this industry is around €3,000.
– How important is TechFusion for Vilnius and Lithuania in the global market?
– Vilnius TechFusion is the result of natural developments. Vilnius is a city of technology and innovation, with almost 50,000 people working in these fields and creating significant added value. According to our estimation, the average revenue generated per employee in business in Vilnius is €140,000, while in TechFusion sectors it is €220,000 and grows faster than in other areas. Therefore, the importance of the technology sectors for Vilnius and Lithuania is significant, and we need to focus on this when thinking about our education system, talent attraction policy, the fiscal environment – to see where the most value is being created and to proactively try to create more of it.
– Why should there be more such projects?
– Talent attraction and development policies leave us with constructive discussions about which sectors we want to focus on sectors with the highest demand for talent, and what we will do to address this problem. We need to have both short-term strategic goals for attracting talent and long-term goals for increasing the number of people who choose technology careers.
– Vilnius was highly ranked in the European Capital of Innovation Awards. What was behind this success?
– Vilnius chooses to act boldly and quickly, and we are recognised abroad for our initiatives in open data policy, digital services, mobility services (car-sharing ecosystem), and initiatives in education (computer literacy and coding training, FabLab initiatives). We probably often underestimate what we have, but in the overall context, we look really good, because it is much more difficult to make changes in megacities, and Vilnius has a great combination of bold policies and a progressive society open to change.
– Lithuania’s name can be seen mentioned increasingly often in the field of technology development. What else can be done for further improvement?
– Technology and various solutions for technology adoption are developed by people. The more people we bring into the sectors, which show the greatest potential, and encourage their collaboration, the more likely we will continue to find world-changing solutions, unicorn start-ups and innovative research in Vilnius and the country. Often, solutions that change entire industries are born out of cross-sectoral cooperation, a convergence effect for which Vilnius is the perfect city.
– How do tech innovators manage to attract foreign investment in the current economic and geopolitical context?
– A distinctive feature of our start-up ecosystem is the bootstrapped companies, which have good profit margins and sustainable business models. So, in the current economic climate, where valuations for many ecosystems are in decline and investors are looking for less risky companies, our start-ups and the ecosystem, in general, have a good chance to use trends to their advantage.
Read the original article and interview in Lithuanian at Delfi.lt