Latvian financial technology sector development strategy
June 2022
Strategies and Action Plans
Latvian financial technology sector development strategy focuses on Latvia’s potential to become a competitive hub for financial technology within the European Union by addressing current shortcomings and laying out a roadmap for future development.
Latvia’s fintech sector is seen as underutilised despite having supportive business regulations. The report highlights a pressing need to reduce unnecessary barriers for businesses entering the financial sector and to emphasise the integration of innovative technologies such as artificial intelligence (AI), big data, and cloud computing. These technologies are identified as crucial for creating high-value products that can enhance the sector’s competitiveness.
When compared to other EU countries like Denmark, France, and Germany, Latvia lags significantly in adopting modern technologies in financial services. For example, only 7% of Latvian financial service providers currently use AI, as opposed to 37% in leading EU countries. Similarly, big data is utilised by 5% of providers in Latvia compared to 59% elsewhere. Blockchain technology, particularly in the context of smart contracts, is adopted by only 1% of providers in Latvia. This stark contrast underscores the urgency for Latvia to embrace these technologies to remain competitive in the international fintech landscape.
The report envisions Latvia as a significant fintech center in the EU, where innovative and scalable business models can flourish. To achieve this vision, the strategy outlines a multifaceted approach. It emphasises the continuous improvement of regulations to promote financial sector sustainability and align with technological advancements. A key priority is to create an innovation-friendly infrastructure that is accessible to all market participants while adhering to principles of technological neutrality.
Investment plays a critical role in the strategy, with a focus on enhancing the availability of capital, especially for early-stage startups and projects requiring venture capital. Alongside financial support, the development of a skilled workforce is identified as essential. The report calls for tailored educational programs and specialised training to cultivate local talent and attract professionals from abroad, accelerating the knowledge transfer required to advance the fintech ecosystem.
Collaboration among stakeholders—businesses, regulators, investors, educational institutions, and government bodies—is positioned as central to the strategy’s success. The report stresses the need for regular, coordinated communication among these groups to ensure the ecosystem functions cohesively. Maintaining high compliance standards while fostering innovation is another critical element, ensuring that the sector’s growth does not compromise its integrity.
Internally, the strategy calls for raising awareness among local stakeholders about available resources and opportunities within the fintech sector. Externally, it advocates for a targeted communication campaign to promote Latvia as a fintech hub in carefully chosen international markets.
Overall, the strategy underscores the importance of deliberate and sustained efforts to position Latvia as a competitive player in the global fintech arena.