In September 2019, PSD2 went live in the EEA. Lithuania is the second largest fintech hub in Europeand their major banks already offer open banking.
Open banking is banking practice that securely shares financial information such as consumer banking, transactions and other financial data to third-party financial service providers (Estevez, 2020). Sharing data is done through the use of application programming interfaces (APIs) and only with the consent of customers (The Balance, 2020). Open banking is the drive behind both innovation and competition in the financial industry (Cahill, n.d.).
PSD2 is a European Directive that regulates electronic payment services and was implemented in all EEA countries in 2016 and went live in September 2019.
Attributable to the Lithuanian central bank’s regulatory sandbox, Lithuania is the second largest fintech hub in Europe (Staff Reporter, 2021). The Bank of Lithuania offers help and guidance to potential fintech companies via its Newcomer Program, which aims to attract new companies, encourage them to develop new products in Estonia and facilitate innovation (Kuznetsova, 2020). Thus, it is no surprise that the European Banking Authority determined that Lithuanian banks were amongst the most profitable in Europe (Kuznetsova, 2020).
Of all Lithuanian citizens using the internet, 79% use the internet for online banking, which is 13% above the EU average(DESI, 2020, 9). Furthermore, out of 2.8 million Lithuanian citizens, 35% are now using Smart-ID, an online banking verification system (Kuznetsova, 2020). Additionally, Lithuania ranks 6th in the EU for digital public services (DESI, 2020, 13).
Lithuania has a total of18 banks, the largest of which include SEB and Swedbank (Kuznetsova, 2020).
Open banking uses an API that allows financial institutions to exchange financial data, usually through a third party-developed application (Estevez, 2020). These applications are developed by up and coming FinTech companies with the mission to improve digital banking.
To access and use the open banking APIs in Lithuania, you will need to acquire an account information service provider license, issued by the relevant authority. Furthermore, you will require a relevant certificate (QTSPs or eIDAS), compliant with PSD2 requirements. Alternatively, you can use an open banking platform, such as Nordigen.
the balance. (2020, October 11). What Open Banking Is and How It Will Affect You. https://www.thebalance.com/what-is-open-banking-and-how-will-it-affect-you-4173727
Bank of Lithuania. (2020, March 30).Payment initiation and account information services. Bank of Lithuania. https://www.lb.lt/en/payment-initiation-and-account-information-services
Cahill, H. (n.d.).InvoiceFair. The Evolution of Open Banking: Connectivity breeds digital competition. https://invoicefair.com/the-evolution-of-open-banking-connectivity-breeds-digital-competition-081118/
DESI. (2020). Lithuania.Digital Economy and Society Index (DESI) 2020, 1-14.
Kuznetsova, V. (2020, December).Lithuania’s banking sector: Facts & FiguresLithuania’s banking sector: Facts & Figures. EBF. https://www.ebf.eu/lithuania/
Estevez, E. (2020, August 27).Open Banking. Investopedia. https://www.investopedia.com/terms/o/open-banking.asp
Raščiūtė, A. (2020, August 10).Join the Digital Banking Revolution in Lithuania. Invest Lithuania. https://investlithuania.com/news/join-the-digital-banking-revolution-in-lithuania/
Staff Reporter. (2021, January 15).London open banking fintech Yapily expands to Lithuania following Brexit. UK Tech News. https://www.uktech.news/featured/yapily-expands-to-lithuania-20210115
Tink was founded in 2012, and has built one of Europe’s biggest screen-scraping / open banking platforms – they claim to have broad connectivity and services that create value out of the financial data. Tink offers their platform to banks, fintechs, and startups.
Instantor is a account aggregator and credit analytics company using screen-scraping. They were acquired by Tink in 2020.
Nordigen is an authorised Account Information Service Provider. We provide free access to bank data and premium data insights, using regulated PSD2 connections.
Kontomatik was founded in 2009. Today Kontomatik is a licensed AISP headquartered in Warsaw, Poland. The company provides screen-scraping and PSD2 connections to bank accounts.
Yapily, one of a number of fintech startups that offer an opening banking API to let enterprises, such as financial service providers and merchants, connect to banks. Founded in mid 2017 by Stefano Vaccino, Yapily’s open banking platform makes it easier for various service providers to connect to banks. Specifically, it provides a way to retrieve financial data and initiate payments via a “single secure API” that in turn connects to each supported bank’s open API.
TrueLayer is a London-based start-up that helps fintech companies verify accounts and connect their apps to bank data. TrueLayer was founded by Francesco Simoneschi and the company has offices in 5 cities across the world.