According to Juozas Rupšys, the CEO of UAB Egroup EU, which manages the brand Creditonline, we can take pride in how Lithuanians and companies working in Lithuania have been continuously among the first in the world to adapt to digitisation, even if for the time being, we do not fully make use of our advantage.
Not easy to obtain financing, but fintech companies are changing this
Based on the data of the European Commission, in Lithuania, an entire 13% of small and medium-sized enterprise CEOs complain about poor access to financing resources. However, a large number of fintech companies have continuously been improving the situation. In a 2019 Bank of Lithuania survey, an entire 27% of surveyed company CEOs indicated they feel the need for alternative financing and statistics from the Financial Service Companies Association (FINCO) show that growth in the demand for non-bank funding is also notable in the private sector.
According to J. Rupšys, in the financial service market, Lithuania is walking alongside other European countries technologically: “Indeed, we bring in more novelties into the European market than we take in. Our country’s level of financial technologies is high: blockchain, cybersecurity, artificial intelligence and other concepts have already been used for some time in Lithuania, while foreign companies began to master these technologies later on. We must maintain this leadership.”
Technological lead, but the wariness of foreign countries
However, fintech companies could help resolve the lack of financing even more effectively if they would be more willing to enter foreign markets: “We must become global market players and thus encourage greater competitiveness. In the European market, the problem of lacking financing opportunities is far lesser because, in most countries, there is greater competition. As time passes and credit services develop across the world, including in Lithuania, further services, technologies and regulatory requirements have emerged, improving the quality of this service. Lithuanian financial companies often offer especially advanced technological solutions, thus they should not be wary of foreign markets,” J. Rupšys said.
Lithuania cannot boast of plenty of financial companies, there are really only a few market players here, thus emerges the situation where several companies dominate. This problem could be resolved not only through Lithuanian companies developing abroad, but also facilitating the entry of foreign companies into the Lithuanian market.
“There is no free movement in the crediting market. European Union and Lithuanian laws limit the competitiveness of financial companies between European Union companies; however, we are gradually moving towards a simpler market, European Union institutions are working toward this. Greater competition in the financial sector would only benefit Lithuania,” J. Rupšys explains.
Novelties cardinally change company habits
Fintech companies are currently focusing significant attention on financial technology solutions, and namely, these novelties offer the most benefits because they allow to create a closer connection to partners and provide services more effectively. Without a doubt, sometimes it so happens that company staff have to adjust to the novelties, however, Lithuanian businesses are receptive to technologies and after a brief adaptation period, they typically no longer wish to return to the old solutions.
According to FINCO director Šarūnas Frolenko, technologies are rapidly transforming the habits of financial companies’ partners: “They are migrating into the digital domain, and fintech companies are competing in which will adapt the novelties first. This encourages continued progress and changes to consumer habits, which creates a potential for Lithuania to become a financial service leader in Europe.”
The future – more remote services, security and artificial intelligence
While in other markets in the world, financial service companies operate more conservatively, in Lithuania, these companies are the first to adopt novelties. J. Rupšys believes that the pandemic will only serve to further accelerate the implementation of technologies in Lithuania and the world: “Consumers are prepared to accept novelty. Thus financial companies will offer ever more services remotely. Of course, the government must respond to changes faster and create legislation that is suitable for such a dynamic environment, but now is a particularly favourable time to employ the newest technologies to improve the effectiveness of financial services. Consumers want novelties and the market is prepared to offer them.”
It is expected that in the near future, three new technologies will serve as supports for more effective and saver service provision: big data, artificial intelligence and blockchain technology. Thanks to the first two technologies mentioned above, operations such as client solvency forecasting will become fully automated. The privacy and transfer speed of such sensitive data will be especially high and precise; thus the question of data security becomes especially relevant, and in this, the blockchain technology can contribute.
“We presented a solvency evaluation tool for the financial service sector already eight years ago. Thus, we hope that big data and artificial intelligence, when paired with blockchains will soon allow easier, faster and safer creation of individual financial plans, helping receive necessary financing simpler and faster,” J. Rupšys summarised his vision for the future of the financial sector.
