With big-name players on board, including Revolut and Robinhood, Baltic state pitches itself as gateway to market of 450 million consumers
Lithuania, a nation of fewer than 3 million people, is striving to sharpen its competitiveness by welcoming leading offshore players into its market.
The Baltic state is setting its sights on South Korea's financial technology sector, positioning itself as a strategic gateway to the European Union's 450 million consumers.
As part of the move to appeal, a business delegation, including Elijus Civilis, general manager at Invest Lithuania, and Lukas Jakubonis, chief business development officer at the Bank of Lithuania, recently visited Seoul.
"It is not that we just want the fintech companies to open a backend office in Lithuania, but we are basically proposing to them to enter the European market through Lithuania," Civilis said in an interview held with The Korea Herald at the Embassy of Lithuania in South Korea in central Seoul, Friday.
"If you get a license in Lithuania, for example, you can provide financial services all across the EU. The regulations are unified, and this is what brings Europe as a good investment hub with around 500 million people as a potential client market," he said.
While the EU maintains a unified regulatory approach, Lithuania seeks to differentiate itself in the manner of execution. In proof, the country leads the EU in per capita fintech licensing, serving 1 out of 10 Europeans with financial services.
"The rules are basically more or less the same. The question is how you enforce them and how you process them. The legal framework is the same, but the way we work is a completely different story," Jakubonis said, noting that his visit to Korea reflects the regulator's openness toward foreign companies.
As part of these efforts, the Lithuanian delegation has been reaching out to internet-only lender Toss Bank, visiting its headquarters and meeting with its chief Rhee Eun-mi, for three consecutive years since 2023.
The Lithuanian delegation believes that Korea's leading fintech operators, including Toss Bank, could enter the European market through Lithuania, following the path of Revolut, one of Europe's biggest finance apps, and US brokerage firm Robinhood. Both ventures have tapped Lithuania as the base of their European expansion.
"We are not talking about Korean companies coming and dominating the Lithuanian market. We are talking about them starting in Lithuania and then working out throughout the whole Europe," Civilis said.
The inflow of foreign companies has been helpful in stirring up competition within the market, the executives stressed.
"With the arrival of such foreign digital banks, traditional banks in Lithuania have no other option but to innovate. They are feeling that squeeze, which is great for the consumers," Jakubonis explained.
As Korean financial companies face mounting pressure to expand abroad, the Lithuanian officials stressed the importance of scale -- ideally achieved through an expansion in their country and the larger Europe.
"We are seeing the push that Korean firms need to go abroad and the need to expand if they want to grow. Because financial services are always a business of scaling and if you stop scaling, you are not growing and you are not using your full potential," Jakubonis said.
"My suggestion for Korean companies -- especially those that want to go initial public offering and want to increase valuation -- they have to prove that they can replicate success," Civilis said. "The companies can replicate the success in Europe through Lithuania."