One of the IPF Group subsidiaries, IPF Digital in Latvia, serves the group not only as an important market but also a place to build and test new products that are later introduced in other markets as well. One of the most successful examples is Creditea Mobile Wallet.
Some time ago, IFP Digital noticed that customers are using the services more and more on mobile phones and they were asking for a more convenient and transparent tool to manage their daily finances. So, the company developed a new product: Creditea Mobile Wallet. It is a digital wallet, payment card, mobile banking app, cash options, and credit – all in one product.
“After launching Creditea Mobile Wallet for the first time back in 2020 we were able to quickly increase the user number above 10 thousand and that gave us a lot of good insights to how to make the solution more relevant for our customers. Based on the learnings we did a significant makeover before it went to new markets including Mexico this year,” says Edgars Kalniņš, head of customer experience at IPF Digital. Now there are already more than 10,000 Mobile Wallet customers in Mexico, even more – it was achieved in less than three months.
The company was happy with the results in Latvia and the other Baltic markets, but Mexico surprised the company even more. According to E. Kalniņš, compared to the Baltics, the growth is much faster in Mexico. This is mainly driven by two aspects. First, based on the learnings IPF Digital got in the Baltic states, the company simplified several processes. Second, the adoption of mobile phones is much stronger in Mexico.
“We know the market and customers very well and have grown a solid customer base. This means that when launching new products and services, learnings come fast and that’s very important for us,”adds E. Kalniņš.

How big is the cryptocurrency and blockchain startup industry in Latvia?

In the last seven years, a decent number of serious and interesting companies have grown up in the blockchain and Web3 direction in different verticals. Part of the companies are related to crypto assets – cryptocurrency payments and cryptocurrency institutions. There are at least 10 companies with developed sustainable business models working in this direction and servicing the whole world. For example, the Gravity Team algorithms process 0.8% of the global cryptocurrency market turnover – several hundred million dollars per day. In five years, a cumulative 100 billion dollars have passed through the company’s systems. That is impressive. Nexpay, Hodl Hodl, and other companies are also working in this field.

Web3 game companies such as Colizeum and Beetroot Lab, blockchain software development companies such as Blockvis, and NFT-related companies are also working in this industry. For example, one of our members is the Latvian national airline company airBaltic, which has its own NFT Plainies. The company uses NFT very cleverly as a customer engagement tool – just like Nike and other big companies.

Other blockchain companies include smart contract companies such as Salto X, a joint venture of Latvian Krists Avots and Estonian entrepreneurs.

There are many other companies operating in very specific niches. For example, eSIM company Yesim has an integration with the Binance platform.

How many companies are active in this industry in Latvia? How big is it?

Around 35 companies. In the association, we try to reach out to all companies that are connected to Latvia and have Latvian founders, and to all companies that are physically located in Latvia. The association also includes Latvian-founded companies that are legally based elsewhere, for example in Sweden. Of course, there is the question of what we do or do not count in this industry and whether we consider them Latvian companies. For example, Bitfury’s co-founder is Latvian and the company employed 70 people in Latvia as recently as 2020.

35 companies – is that a lot or a few?

If one of these companies has handled 100 billion euro, it shows that this is an economically important industry. Also it is a fast-growing area. Even if it has a few hundred employees today, I see great potential to reach a few thousand in a few years. Lithuanians have shown that fantastic growth is possible in a few years. In 2020, Lithuania managed to attract a large crypto exchange, Binance, which is now the fourth largest taxpayer in the country, excluding VAT payers. This, I think, also shows the enormous economic impact of the industry. There are myths that the industry is decentralised and does not pay taxes – this example dispels them.

What are Latvia’s strengths in the crypto industry? What do our companies do best?

We have very strong programmers, as can be seen both from Blockvis and the Gravity Team. Intellectual potential can be harnessed to create internationally competitive products. It is also a good argument to use in negotiations with foreign companies that would like to work in Latvia – there is no shortage of technical talent to worry about.

How did this industry start? Who were the first companies in this field in Latvia?

The first major crypto company related to Latvia probably was Bitfury, founded by Vals Vavilovs, which initially developed various devices, but now focuses on providing security solutions and infrastructure for blockchain companies. The company has raised 170 million dollars in investments and is worth more than one billion dollars.

What about foreign blockchain start-ups? Are there any in Latvia?

There are a number of companies that have applied to join the association, based in the UK or Italy, for example. There are not many examples of this because our financial system has not been very supportive and has not licensed crypto companies as actively as Lithuania or Estonia, which have specific regulations for this industry.

Earlier this year, the European Parliament adopted the MiCA Regulation on crypto asset markets, which will apply from 2024. How will the crypto world change as a result of this regulation?

The regulation changes everything, because now the European Parliament has said at the highest level that this is a legitimate industry that will have the legal framework for development. So far, several countries such as Lithuania, Estonia, Portugal, and France have introduced national cryptocurrency regulation, but most countries have not yet done so.

Crypto exchanges, crypto brokers and other service providers will now be able to be registered and licensed in any European country. If you get a licence in one country, you will be able to work all over Europe. The industry itself also welcomes the regulation. It strikes a good balance between protecting consumers and not killing business opportunities, leaving room for development and growth.

If Latvia will be able to adapt this regulation first and introduce some other small initiatives, this is an excellent opportunity for Latvia to stand out at the European level and become a crypto centre.

What could these initiatives be?

We are already working to encourage the possibility of paying taxes and paying for the share capital of a company with cryptocurrencies – the euro would go to the state account, and on the other side there would be the possibility to pay with cryptocurrencies. It would also be important to remove the restriction that you have to travel to Latvia to register a company. Small things like this, which do not cost the state anything to implement, will lead to higher tax revenues in Latvia and put Latvia on the world map as a potential destination for companies of this industry.

Once these issues are sorted out, the association is ready to go and approach crypto companies to consider registering and obtaining a licence in Latvia. I have already spoken to the major stock exchanges and told them that Latvia is working in this direction – crypto companies established outside the European Union will need a licence anyway. Why not get it in Latvia?

And what do they answer?

They understand that a licence will be needed and are now trying to understand the process of how this could happen. The question is whether Latvijas Banka will actually start issuing licences and do it fast enough. If everything works as planned, Latvia has an excellent chance of attracting one of these big companies.

What does it take for it not to be a fantasy, but to actually work?

We need a change of mindset, and it is already happening. In recent years, we have lived in a regime where the entire financial system is being re-regulated. This has been felt by everyone, not just entrepreneurs. But the situation is slowly changing. Latvia has invested a huge amount of money to reduce the potential risks of money laundering: the annual budget of the Financial Intelligence Unit is almost five million euro, and the capacity of the Bank of Latvia and the Financial and Capital Market Commission is being strengthened.

Finally, there is an understanding that the country needs to be more open and innovative in the financial sphere.

Now it is simply a matter of putting it into practice and issuing licences. It cannot take a year or more – the licence must be obtained within three months. That would be an excellent due date.

We have agreed with Latvijas Banka that there will be a sandbox for blockchain companies in the regulator and they will be able to consult on the process of obtaining a licence.

Awareness in other institutions also needs to be improved. It cannot happen that someone sees a company working with cryptocurrencies and immediately freezes its account. There must be adequate dialogue. Everything will work if the system is sound at every step and we do not try to be twice as strict with what the law requires of our own companies.

Does each country implement the regulation separately, or does it work in the same way across Europe?

The text of the regulation must be approved by national law in each country. The regulation is directly applicable and there should be no major derogations.

It doesn’t matter in which country a company registers in. What can be done to make it more attractive to obtain this licence in Latvia?

First of all, we need to apply the Regulation first in Europe! We need to understand that Latvia is not Germany and we cannot wait for 10 other countries to adopt national regulations and test what works the best. The only way for us to be competitive is to adopt this regulation first and sweeten it with national legislation that allows the payment of taxes and company share capital with cryptocurrencies, as well as the remote filing of company registration documents and easy communication with the public authorities. By putting these things in place, Latvia will have a very good offer. The most important thing is not to put additional obstacles in the way.

How much awareness is there at the national level about what blockchain companies are doing?

The joke about the crypto industry is that it combines what people don’t know about computers and finance. In all seriousness, it looks like understanding is improving. For example, the Financial Intelligence Unit has a good understanding and its specialists are able to distinguish between risks and real business. At Latvijas Banka there also is a pretty good understanding. We have agreed to run additional courses to help understand this industry. We are also talking to the Ministry of Finance, the State Revenue Service and the Treasury, which are increasingly willing to move in the direction of innovation.

Awareness is slowly building, and the MiCA Regulation is a good stimulus for this: soon it will be applied and everyone needs to understand how to do it.

I see that the situation is changing, and there is an understanding in the regulator and the Ministry of Finance that innovation is needed in the industry. For example, Lithuania determined seven years ago at every level from the political leadership to the central bank that the fintech industry is important for the country. As a result, there are now more than 500 fintech companies in Lithuania and 3,000 people working in the industry. This example shows what can be done with great will and courage.

Bitcoin is based on the blockchain, but that is not all that is possible with this technology. How else is it applicable?

Yes, there are many uses for this technology, and cryptocurrencies are just one of them. There are other examples of use, both in the commercial sector and at a national level, which should be seen as an opportunity. For example, Estonia uses blockchain technology to enforce the integrity of government data and systems, Finland’s national logistics system and the US Department of Homeland Security’s surveillance camera data storage system are based on blockchain, while in Georgia it is used by the National Land Registry. Europe is working towards a single digital identity, where every European citizen will have a single digital identity file – which could also be built on a blockchain.

In Latvia, I see at least two excellent options in which blockchain could be used. One example would be an eHealth system, where a blockchain would ensure that all data is decentralised, and another would be to put a cash register system on the blockchain.

After working in the start-up environment and four years as a member of the Latvian Parliament, you have been leading the Latvian Blockchain Association for a year. What does the association do?

The association has three goals: to build community, to educate the public, and to promote Latvia. We evaluate the members very seriously, when we admit them to the association. We make sure they are in business for the long term, and that they do not engage in fraud. We also educate public institutions and politicians about the field, trying to show its potential and hope for positive change. We also promote Latvia internationally as an attractive location for companies of this type and make it our mission to attract companies from this industry. One could say that this is a task of the government, but we are ready to invest our resources in promoting Latvia internationally, because we know that everyone will benefit from it.

This year, the association carried out a study on the blockchain industry. What are the main findings?

We carried out this study because we want to educate the wider public about the potential of blockchain technology and to draw the attention of politicians and public officials. This is a turning point – a new technology is coming into the world and we all have the opportunity to let it pass or surf on this wave and make a significant difference for the country of Latvia.

We wanted to test this hypothesis academically. The 2023 study “Assessment of the Potential Economic Impact on the Latvian Market of Implementation of the European Union’s Unified Crypto Asset Regulation MiCA” by Prof. Gundars Bērziņš and Prof. Jānis Priede shows that Latvia has the potential to develop this industry and significantly benefit its economic development. However, this requires decisive action through legislation already this year. In practice, entrepreneurs also want to see that the regulator is receptive to active licensing in Latvia.

How do you see the future of blockchain technology companies in Latvia?

During the interview we are sitting in one of the most modern offices in Riga – Zunda Towers. I hope that in a few years, with a few things in order, these offices will be home to many high value-added companies that will create thousands of well-paid jobs, pay taxes, and make Latvia much more visible in this industry.

During the last 10 years, the peer-to-peer lending market has been booming across Europe, while fragmented regulation has been applicable in the member states. Some countries do not facilitate the development of peer-to-peer platforms, while others are looking for a solution that would help to find the balance between financial innovations and customer protection. Over the last three years, the Latvian regulator has been actively working on regulating and straightening the peer-to-peer lending market. As a result, it has transformed investment services from investments made in loans as claim rights into the form of the regulated financial instrument – notes. Within the last three years, six peer-to-peer lending platforms have been licensed.

“We are facilitating innovations by applying a regulatory framework that enables peer-to-peer lending market participants to operate in financial markets with allowed cross-border activity. This represents a new way to regulate investment activities,” says Marine Krasovska, head of the Financial Technology Supervision Department at Latvijas Banka.

As a result, customers are protected by the Markets in Financial Instruments Directive II investor protection framework, Prospectus Regulation, packaged retail investment and insurance-based products, Investor Protection Law, and other existing acts which aim to protect the interests of the investors. The Regulation distinguishes professional and non-professional investors making sure they receive the appropriate protection.

Despite the European Crowdfunding Service Providers Regulation being adopted by the European Parliament and the Council in November 2020, at the moment, there are only 44 licences issued across Europe. One of them – in Latvia. Experts predict that the collective finance platform industry will grow in the future.

The goal of the European Crowdfunding Service Providers Regulation was to harmonise crowdfunding services across the European Union Member States, to promote the growth of crowdfunding platforms, and enhance investor protection. One of the ideas of the regulation also involved supporting small and medium-sized enterprises by providing better lending and fundraising opportunities. There were different forecasts for the market development following the implementation of the regulation, such as increased cross-border activity, market expansions, the growth of crowdfunding platforms, and the impact on the traditional financial system.

“Currently, we can observe a very different situation: the regulation was adopted by the European Parliament and the Council in November 2020 but, at the end of summer 2023, there are only 44 licences issued across Europe. We observe a huge consolidation of the industry, when service providers are working on the adaptation of business processes and business models to new requirements,” says Marine Krasovska, head of the Financial Technology Supervision Department at Latvijas Banka.

Latvijas Banka has received two official applications for the authorisation of a crowdfunding service provider. In the beginning of August 2023, only one authorisation was granted.
“Consultations are ongoing with existing market participants currently operating within the transitional period set out in the regulation, thus 2–3 applications for authorisation are expected in the near future,” predicts M. Krasovska.

Talking about Huntli, L. Bass explains it is an all-in-one WIX-like live transaction monitoring and fraud prevention solution suitable for traditional and crypto payment systems, online betting and gambling, and ecommerce merchants. “Huntli is a disruptive solution in the industry, which directly targets the main pain points: the ever-great threat of outside fraudulent activity, tight anti-money laundering, and combating the financing of terrorism regulations and lack of systems that are fast and adaptive enough to proactively address dynamic industry challenges. These factors push companies to rely heavily on a multitude of complex tools that require expensive and rare specialists, as a lot of work is still being done manually,” he says.

Addressing these issues in the market, Huntli offers a highly adjustable and flexible solution, suitable to the specific needs of a given company and its profile. Besides, all the information is available in a user-friendly intuitive dashboard without the need to jump between systems.

The Huntli platform allows highlighting any user activity that is deemed too risky or might lead to money laundering, tax evasion, fraud, and other financial crime for proactive fraud prevention strategy implementation. “Our compliance solution helps clients to be on par with current anti-money laundering and combating the financing of terrorism regulations as well as makes them up to 60% more cost-effective, which allows them to allocate funds for better financial product development, a customer-oriented approach, and more effective fraud prevention activities. Currently Huntli is the only company in Latvia of this scale and technical capacity in the know-your-transaction market,” says L. Bass.

The majority of banks see cooperation with fintech companies as an opportunity to develop existing products and create new products and services using fintech solutions, shows a survey conducted by Latvijas Banka. At the same time, banks do not value the importance of cooperation with fintech companies for their development as highly as fintech companies.

In 2023, Latvijas Banka conducted a survey of banks and fintechs with an aim to facilitate the dialogue between the sectors, provide expert opinions, and enhance cooperation to ensure better banking service availability and partnership in creating improved solutions for customers. The survey covered several areas: the competition aspects between banks and fintechs, the impact of big-tech on the financial industry, the cooperation between banks and fintechs, and the availability of banking services for fintech companies.

“Of course, there are still different challenges,” says Agneta Rumpa, senior associate at Sorainen. Rūdolfs Eņģelis, partner at law firm Sorainen and attorney at law points out that recently he has heard a lot of complaints from clients in the fintech industry about their cooperation with credit institutions – but not all of them. “Of course, there is a wide range of financial technologies and those providers that are relatively close to traditional financial services have fewer problems, for example, it is relatively easy for them to open an account. But once a company moves away from traditional financial services, the policies of credit institutions become very conservative,” he says.

Ramona Miglāne, partner at drill. law firm and attorney at law, also knows from practice that fintech companies have difficulties with opening a bank account. “But banks do not say they don’t work with fintech companies. Banks ask for various documents, take a long time to review them, but in the end do not open the account. There are also cases where an account is opened, but later cooperation is refused. And the commission fees are much higher than for any other company. In order for the industry to grow, there is plenty of room for improvement. Of course, banks see fintech companies as competitors, but instead they should see them as cooperation partners. A good example of how banks can cooperate with fintech companies is Mobilly, one of the shareholders of which is Citadele bank,” says R. Miglāne.

A. Rumpa also agrees that this is a topical issue. She believes that the solution can be found in dialogue. For example, the discussions that have already taken place this year between representatives of the banking and fintech sectors and Latvijas Banka give hope that improvements in this and other areas of cooperation between banks and fintech companies can be expected.

LPB Bank’s experience with fintech is broad and diverse. “We have worked with start-ups and large fintech companies, providing technology and helping build business models. Our experience has shown that cooperation with fintech companies is precious in terms of technology and business models. Fintech companies can adapt and respond to market changes quickly, and they can provide valuable experience and knowledge to improve our services and processes,” says S. Siņakovičs.

LPB Bank clients began approaching the bank with new business ideas, including those from the fintech sphere. Another client segment was start-ups that initially wanted to open only a business account. Still, after obtaining a license, they also needed to open separate client fund accounts. Such clients needed a solution to manage their accounts conveniently, as fintech companies typically have many more payments than standard clients and internet banking is not convenient for this purpose. To solve this problem and provide modern technological access that is convenient and easily integrated, LPB Bank developed an application programming interface (API).

“It helps to update data about account changes and inform the client’s accounting system about incoming payments. API methods are regularly expanded. One example is webhooks, which help update data about account changes, notifying the client’s accounting system about incoming payments,” says S. Siņakovičs.

The initiative for such cooperation comes both from the bank and from clients. He says that often it begins with a client’s desire or trends that the bank observes in the market. For instance, LPB Bank collaborates with CrowdedHero Latvia, who is the bank’s client and received the first operating permit for collective financing service provision in Latvia. “The client presented their business plan, the bank arranged meetings with several crowdfunding platforms, we compiled information with requests, and we are now preparing our vision of how it could work technically. If we get confirmation from clients, we will start the development,” says S. Siņakovičs.

According to D. Fiļipovs, each local financial market possesses unique traits influenced by financial sector players and societal norms. Progressive solutions often face scepticism and hesitance. Understanding the root of the problem, articulating it clearly, and presenting a solution are pivotal to progressing discussions on innovation, streamlining, and modernisation.
“It’s important to recognise that in certain markets, partners may overestimate their actual capacity and competence. During projects, considerable resources may be allocated for training customer teams. Such scenarios can considerably extend project durations. Predicting such occurrences in advance is challenging, underscoring the need for a flexible team of experts and a creative approach for each project,” he shares.
The significance of maintaining client relationships, seemingly taken for granted, cannot be overstated. Remote communication poses a significant challenge. “While remote work is part of our daily routine, clients often desire in-person presence. This entails regular and extensive business travel or establishing local representation,” adds D. Fiļipovs.

Jeff App is also working on business development in Indonesia, India, and Mexico, as well as further growth in the Philippines. T. Niparts says that the markets in South and Southeast Asia were chosen based on the team’s previous experience and due diligence of the market. “These are emerging countries and economies where the fundamental market base for financial services is very different from many other parts of the world: people largely have no credit history, people are more likely to use cash or alternative payment tools such as e-wallets rather than bank accounts, many services are still not provided online or are poorly developed online, and consumers lack the knowledge that using digital services is not only more convenient and cost effective, but also a credible alternative. Taking into account these and other factors, and recognising the almost unlimited scalability, we chose these markets,” he says.

T. Niparts points out that every country in Asia is different. And at the same time, they are all quite unpredictable. “There are countries where the legal side and the regulation is clear, and there are countries where things are more chaotic, unpredictable, and ambiguous,” he says. But all these countries have two things in common. First, public awareness and the shift to digital financial services are at an early stage. Second, by learning about and respecting local cultures, which vary considerably from country to country, cooperation and success are better achieved. “It is important to be aware that the best model in theory is not always the best in a particular country or market. You are an outsider, you have to adapt to the local culture, and then over time, step by step, you can hope to change some of the nuances based on the trust you have built up,” says T. Niparts.

For other fintechs thinking about the Vietnam market, D. Syksta advises having a mobile-first mindset. “Keep that in mind as the local users are accustomed to instant access at any time, anywhere,” he says.

“The experience we have gained in almost a decade in issuing local bonds and the trust earned over time from investors in the Baltics is now helping us in the global markets. By becoming part of this environment, companies commit to high standards in business transparency, outreach, cooperation with regulators and stock exchanges, and also high standards in business disclosure and ethics,” says M. Kreics.

T. Jurjevs also says that opting for bonds as a financing source has brought increased transparency to Sun Finance’s structure and prompted the development of internal procedures to ensure consistent and timely reporting to investors.

“Additionally, this decision has enhanced Sun Finance’s reputation, as we have become one of the largest issuers in the local capital market. This achievement stands as a testament to Sun Finance’s robust financial performance and promising future prospects,” he emphasises.

M. Kreics adds: “Reputation is one of the most important assets for a financial company. We are becoming a more accessible and understandable business for people by following capital market standards.”

How to prepare for a bond issue? “The company should have a commitment towards transparency and start with getting internal reporting processes sorted. From a company, it requires commitment in terms of resources and the ability to articulate its strategy and results,” points out M. Kreics.

T. Jurjevs admits that issuing bonds may seem daunting, especially the first time, but the rewards make it worthwhile. To get started, a company needs reliable consultants and legal advisors to assist it in this journey. “Keep in mind that the initial bond issue will require significant internal resources to prepare the terms of the issue. However, subsequent issuances become less resource-intensive,” adds T. Jurjevs.

J. Etherington also says that choosing the right advisors and banking partners to support the company through the bond issuance process is key as many parts of it are not familiar to most management teams, and market practices are changing constantly. “Remember that issuing bonds is just the start of the process. You need to continue to communicate with your bondholders and, obviously, have a clear idea of what the options are when a bond’s tenor comes to an end. The nature of the bond market is that you will not always have a complete picture of who holds your bonds, so be curious, invite bondholder contact, and develop an investor relations function,” suggests J. Etherington. “Finally, in terms of decision making, you will need to understand that you will go from being answerable solely to your shareholders, to having to consider the interests of bondholders, too. So careful balance and communication is critical here,” he adds.

In T. Jurjevs’ mind, the most significant challenge lies in establishing orderly internal procedures to fulfil bond covenants and ensure regular and timely reporting to investors. “If you plan to list bonds on a public market, additional requirements, like information disclosures and an appropriate governance structure, must be met,” he adds.

To attract investors, the company will also have to invest time in preparing informative marketing materials to create a solid public image for your company. Once the company has covered all these aspects, it will not only be ready for the bond issuance but will also have a streamlined internal structure that boosts your business, says T. Jurjevs.

However, it’s essential to acknowledge that introducing innovations requires more than just brilliant ideas. According to N. Bloks, it necessitates a well-defined innovation process, a forward-thinking mindset across the organisation, and the allocation of resources.

“Companies need to create an environment where experimentation is encouraged, failure is seen as a learning opportunity, and the pursuit of continuous improvement is ingrained in the company culture,” he says.

To ensure the company’s steadfast commitment to innovation, the team has implemented a conscious innovation process and fostered a mindset that embraces new ideas. This approach involves encouraging cross-functional collaboration, creating dedicated innovation teams, and providing the necessary resources to explore and experiment but, at the same time, doing it smartly. DelfinGroup recognises the value of providing employees with a platform to embrace innovative thinking and actively engage in shaping the future of the company. That’s why DelfinGroup introduced Innovation Month this year, which culminated in the implementation of the company-wide innovation process.

The TWINO Investments community consists of more than 20 thousand private investors in over 30 European countries. The total amount of investments since the establishment exceeds one billion euro.

“Other TWINO Group business directions are also experiencing moderate growth – consumer lending businesses in Poland and Vietnam are growing, and Poland is now our largest market. We have recently launched consumer lending in the Philippines together with our partner Via SMS,” says H. Henšelis.

He reveals that TWINO Investments continues to improve its financial performance, with significant growth in 2022. The company’s annual profit was 175 thousand euro, a clear signal of its ability to grow purposefully, while also developing a range of new products. “This financial result is a step forward in covering the losses incurred in the previous reporting period related to the investment platform becoming an independent regulated company. This demonstrates the company’s ability to adapt to market demands and manage risks effectively to achieve long-term stability and growth,” H. Henšelis emphasises.

While the proposal is in progress, several discussions on integration and implementation of Open Finance regulation into the European Union financial market raise questions like how to ensure more benefits for both the market and customers in light of concerns about the large volume of data suitable for sharing and its potential complexity for some market participants, particularly concerning insurance and surveillance. “This framework is going to be a pillar for customers to receive more customised financial services, and it fits into the European Digital Finance Strategy,” says Marine Krasovska, head of the Financial Technology Supervision Department at Latvijas Banka.

The regulation aims to provide broader access to financial products and services, potentially reaching previously underserved or excluded individuals and businesses. This can contribute to greater financial inclusion across the European Union. “At the same time, Member States should go deep to research the possible risks associated with the introduction of open finance,” she adds.

The most visible and popular fintech startup whose services are used by a large number of Latvians is the financial super-app, Revolut, from the UK. This app offers basic banking services as well as investments, savings, insurance, and even concierge services in a simple and convenient way.

“Latvia almost has its own super-app, the services of which are used by the majority ─ Mobilly. Their users are becoming their ambassadors, and you can often observe them on X (formerly Twitter) and Facebook commenting on other services along the lines of “I wish I could simply do this in Mobilly; that would be much easier.” That’s a great accomplishment but also a significant challenge to keep the highly valued simplicity and seamlessness as they continue to extend their offering,” emphasises L. Zaikovska-Daukste.