Welcome to our latest edition where we delve deep into the thriving world of FinTech in Latvia. Today, we’re privileged to have an exclusive interview with a person at the forefront of this rapidly evolving sector – Tīna Lūse. As an accomplished Attorney-at-Law and the current Head of the Fintech Latvia Association, Tīna provides unique insights into the burgeoning Latvian FinTech scene. From regulatory challenges to the influence of emerging technologies, she’ll share her expert viewpoint on the current state and future potential of Latvia’s FinTech industry. Stay tuned as we embark on this fascinating journey, discovering what makes Latvia a dynamic player in the global FinTech landscape.

Tīna Lūse – Attorney-at-Law, Head of the Fintech Latvia Association
Since January 2021, Tīna leads the Fintech Latvia Association. The aim of the Association is to unite the providers of financial services of the non-banking sector based on financial technologies in order to ensure the representation and implementation of their interests at the national and international level, promoting sustainable development and growth of the Latvian financial sector.

TFB: What strategies should regulatory bodies employ to delve deeper into FinTech solutions?

TL: The formula is the same as with everything else: if one wants to learn and improve something, one must become very curious about it. The same goes for better understanding the fintech – communication with the sector players is the key. Only through communication and cooperation is it possible to gain understanding and knowledge about what the sector offers and also what risks it really brings along. Open communication, attending industry-related events, conferences, and discussion forums is the way to gain knowledge and take away prejudice. The sector players have also always stressed the importance of cooperation and harvesting from the intelligence that the fintech sector can offer to improve public sector operations as well.  As an association, we are contributing to this process by organizing our series of networking and discussion events -Fintech Breakfast, where we are bringing together private fintech players with the policymakers and regulators to delve into various topics that are of importance to the development of fintech. And it makes me happy that I do not have to be diplomatic when I am saying that we see a great response and interest to better the development of this sector both from the Ministry of Finance and the Bank of Latvia, which are the 2 key players for the sector because it is simply an honest truth at the moment in Latvia. 

TFB: How are government agencies reorganizing their structures to accommodate FinTech?

TL: We see that the Bank of Latvia, which is the central licensing and supervisory authority for fintechs in Latvia, has really done its homework in reviewing the licensing processes and is nowadays referred to as another fintech just from the public sector by the market players. There will always be room for improvement, but at the moment they are quite praised by the market players and consultants for being very responsive, willing to cooperate, and understand new and innovative business models. Even though we still hear that speed could sometimes be improved, nevertheless the first EU-wide crowdfunding license under ECSP Regulation was issued in a mere 3 months time after submission of the application. And it is all possible because of special consultancy and sandbox regimes that are set up to enable the companies that are planning to enter the market to have a good quality pre-licensing consultations and a ground for testing innovative products and their compliance with the regulatory environment. Reliable support from the consultants is also of great importance. And we have all this ecosystem in place at the moment. 

TFB: Which organizational leaders should spearhead fintech initiatives and why?

TL: It must be a team effort. A team consisting of policymakers: Ministry of Finance, Ministry of Economics, and in some parts also the Ministry of Education, regulators: Bank of Latvia and also Consumer Rights Protection Center, and, of course, fintech market players. And it must be understood that maintaining and contributing to such dialogue with the public sector takes quite a lengthy and regular investment of time, which is normal, because, as they say, “Rome wasn’t built in a day”. And of course, we all know that running a business, and especially building something new and innovative requires a lot of time on its own. But I think it is important for any business to understand that devoting a resource and time to build a good quality dialogue with the public sector is equally important as onboarding and providing an excellent service level to customers. 

TFB: In what ways can financial regulators harness data to enhance their operations?

TL: To understand where to focus their attention and spend resources, so to say, to understand the “value for money” ratio for their activities. To understand, some active steps and support mechanisms from the state are needed to foster development. To assess the impact of certain services on a broader society and calibrate the supervisory activities accordingly. 

TFB: What are the greatest opportunities and challenges related to financial data for public regulatory bodies?

TL: I think the opportunities are what was described above. If we come to challenges then as with any other industry the greatest challenge is to get good quality data, because it requires some level of planning and coordination between different public and private actors. The next challenge is to understand how to interpret the data and after the data is there to not fall into the temptation of overregulation, which, of course, will bring any development and innovation to a halt. 

TFB: Can you share some significant achievements that organizations have made so far in the FinTech space?

TL: Already more than 10 years back we saw our first fintech in the consumer lending sector, which brought about a lot of controversy and at times did not let us appreciate the financial inclusion aspect that the service is offering. Now the strongest of those companies, such as 4finance, and Eleving group, have turned into mature international players that are contributing to the financial literacy of the society and the development of new and more accessible financial products.  

What we are all proud of without the controversy attached is our investment platforms, Mintos being the most recognizable name among those. But there are more: Twino, VIA Invest, Nectaro, InDemo, and Debitum, just to name a few. Crowded Heroe and Lande – crowdfunding platforms, which are not only offering good investment opportunities to investors but also financing to SMEs that are not typical bank clients. 

Nordigen – the first free open banking data provider in Europe is also coming from Latvia.    

TFB: How can we address and overcome the challenges related to skills and mindset that hinder FinTech adoption?

TL: By learning and understanding. One of the main challenges when it comes to fintech is the fear of the unknown, and as we know, it can only be overcome by understanding. And here the dialogue that I mentioned earlier is key. 

We’re also excited to share that Tīna Lūse was a key speaker at this year’s MARE BALTICUM Gaming & TECH Summit held in Riga. Her presentation, packed with insights and in-depth analysis, was indeed one of the highlights of the summit. For those of you who missed this year’s event or are eager for the next, we have great news! You can now pre-register for the 2024 edition of the MARE BALTICUM Gaming & TECH Summit. Mark your calendars for May 13-15 as we head to Tallinn, Estonia for another round of inspiring talks, engaging panel discussions, and fantastic networking opportunities. Don’t miss your chance to be part of this significant industry event. Secure your spot now!