The FM has submitted the FinTech development strategy for public consultation, but it is already effectively outdated and does not correspond to the real-life situation, concluded Inc.Baltics.
The entire industry supports the development of the FinTech strategy as a document to follow and to use for setting targets. Experts from the Riga Business School’s “Baltic Finance Center” think tank at Riga Technical University even took the initiative last year and, using funding from the European Commission’s Recovery and Resilience Facility, published their own study – “What Should Be the Next FinTech Strategy for Latvia?”, which examined the situation in the FinTech sector in Latvia, analysed various foreign approaches to planning the development of this field, their success stories and stumbling blocks, and also provided recommendations.
“Knowing that work on drafting the strategy was underway, we wanted to raise the bar, to discuss how something could be done more powerfully,” says Kristīne Dambe, director of the think tank and one of the authors of the study. When publishing the study at the end of the year, the think tank also organized a discussion in which the head of the Financial Technology Supervision Department of the Bank of Latvia, Marine Krasovska, Aija Zitcere, director of the FM Financial Market Policy Department, and other experts took part.
However, the result does not please the industry – most of the sector representatives approached by Inc.Baltics have not read the freshly baked strategy, but those who have point to a lack of ambition and an inability to think long term. “We have analysed the approaches of 28 countries; looking at least in a five‑year perspective is good practice,” says Kristīne Dambe, adding that the development of such a strategic document takes about a year and it should be worth it. “At the moment, politicians still do not fully understand what FinTech is, there are stigmas from the past, moreover the strategy is not integrated with other strategies, there is no synergy,” she says. Why what was discussed in the discussion has not been taken into account is unclear.
Dambe also points out that there is a lack of metrics – there is a lack of clarity on how exactly the metrics will be measured and to what extent the fulfilment of the tasks will make it possible to achieve the major strategic goals.
She is not the only one who thinks so. “To ensure sustainable growth, the strategy must be based on a long‑term vision, rather than being limited to 2027. Investments and goals are needed that will bear fruit even after 5–10 years, strengthening the foundations of the industry and maintaining Latvia’s global competitiveness,” notes Anatolijs Putņa, member of the Management Board and CEO of Debitum Investments, who is also a member of the FinTech development expert group of the “FinTech Latvia” association. He adds that the strategy developed by the FM is a good starting point, but at the moment it seems too general. To truly foster the growth of the sector, more concrete, results‑oriented action is needed. Latvia has high‑level experts and competence, but to attract foreign capital, which is critically important for company development, targeted and active state support is needed.
“Global competition is becoming increasingly fierce. Therefore, we call on the government to focus on what would really provide a tangible boost – to create effective and concrete mechanisms that would help Latvian FinTech companies enter foreign markets and find investors. At present this support is too vague and limited, but we must not miss the opportunities offered by our rapidly growing global FinTech market,” says Putņa.
It should be noted that the previous FinTech sector development strategy set sector development goals for 2022–2023, but in reality the Cabinet of Ministers only adopted it in January 2023. Afterwards, in 2024 both the state and the sector managed without such a document, and apparently last year was devoted to drawing up a strategy supposedly for the future: 2025–2027. Now the strategy has reached public consultation, but in reality it could only be approved at the end of the year.
The FinTech strategy provides for four lines of action: promoting Latvia abroad; infrastructure and regulation; access to capital; and availability of talent. For example, under the line “Promoting the Latvian state abroad” it is envisaged that by the 3rd quarter of this year the LIAA must develop and implement a unified communication message to promote FinTech and compile Latvia’s FinTech offering in specialized awareness‑raising materials. The second quarter of the year is already over, but nothing has been heard about these documents, because the strategy itself, which sets out this task, has not yet been adopted and the deadline has also become blurred. Theoretically “by the 3rd quarter” means by the end of the 2nd quarter, but in interpretation it could also include a whole quarter. Asked whether the LIAA has developed and implemented such a communication message, within 24 hours the institution’s communications specialist only replied that another communications specialist should be contacted.
In the line of action “Infrastructure and regulation”, the task section does not require anything at all to be done until the middle of next year, and most of the tasks must be completed by the end of next year. But the tasks themselves are very peculiar. For example, the FM has set itself the task of amending regulatory enactments to allow foreigners to submit an application for an operating licence in English. The main performance indicator for the implementation of this task is “The application related to the operating licence is also available in English”. Amendments to regulatory enactments in Latvia can be a lengthy process, but in the end this means that one form must be translated into English, and in order for the institution to be able to accept it, the law must be amended. This work is to be done sometime between 2025 and 2027.
Meanwhile, the Office of Citizenship and Migration Affairs (PMLP) has been tasked with establishing a customer support phone line in English by the end of 2026. In practice this means adding an English‑language option button to the automatic answering system, finding an employee in the staff who speaks English and assigning them to answer calls from foreigners. One and a half years has been allocated for this work. The most interesting thing is that it is already working; I tried it by calling the PMLP. It is not excluded that other goals set out in the strategy have already been at least partially achieved – but then why set such pseudo‑goals?
In the line of action “Access to capital”, for example, it is stipulated that amendments must be made to the Corporate Income Tax Law, and this must be done by the end of this year. However, no such drafts can yet be found on the legal act project portal, which means that most likely they will not be adopted by the end of the year either.
Meanwhile, RBS expert Kristīne Dambe also points to another aspect – the strategy hardly touches on modern technologies: “At present artificial intelligence is undergoing rapid development, but there is almost nothing about it in the strategy.”
Originally published at https://inc-baltics.com/eksperti-atzime-fm-nespeju-domat-ilgtermina-vairaki-merki-jau-ir-izpilditi-vai-tos-nav-iespejams-izpildit-noteiktaja-termina/
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