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FinTech in Latvia: Status Quo, Current Developments, and Challenges Ahead

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  • Ramona Rupeika-Apoga

    (Faculty of Business, Management and Economics, University of Latvia, LV-1586 Rīga, Latvia)

  • Stefan Wendt

    (Bifröst University, 311 Bifröst, Iceland)

Abstract

FinTech has been in the focus of discussion for quite some time. However, the market share of FinTech companies is still relatively small compared to that of more traditional financial services. The purpose of this paper is to analyse the status quo, current developments, and challenges ahead for the Latvian FinTech sector. We combine three analyses: a political and legal, economic, social, and technological environment (PEST) analysis; a survey among FinTech companies; and an analysis of the size and financial performance of FinTech companies during the last 10 years. We find that the current status of regulation is one of the main obstacles to FinTech development, because it does not sufficiently consider FinTech-specific aspects. Problems in attracting a skilled workforce and an environment that is not very supportive of new developments in finance are further challenges and might explain at least part of the growth and financial performance difficulties. A revision, modernization, and harmonization of regulation is essential to create a level playing field for all market participants: FinTech companies, traditional financial service providers, and those originally traditional players that are integrating FinTech solutions in their business model. Further efforts are also required to foster Latvia’s attractiveness for a skilled workforce. We hope that this study helps increase the visibility of Latvian FinTech and contributes to the development of the new Latvian FinTech strategy.

Suggested Citation

  • Ramona Rupeika-Apoga & Stefan Wendt, 2021. "FinTech in Latvia: Status Quo, Current Developments, and Challenges Ahead," Risks, MDPI, vol. 9(10), pages 1-23, October.
    • Handle: RePEc:gam:jrisks:v:9:y:2021:i:10:p:181-:d:656248
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    References listed on IDEAS

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    2. Kamilė Taujanskaitė & Eugenijus Milčius, 2022. "Accelerated Growth of Peer-to-Peer Lending and Its Impact on the Consumer Credit Market: Evidence from Lithuania," Economies, MDPI, vol. 10(9), pages 1-17, September.
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    4. Olga Lavrinenko & Edmunds Čižo & Svetlana Ignatjeva & Alina Danileviča & Krzysztof Krukowski, 2023. "Financial Technology (FinTech) as a Financial Development Factor in the EU Countries," Economies, MDPI, vol. 11(2), pages 1-20, February.
    5. Ramona Rupeika-Apoga & Kristine Petrovska, 2022. "Barriers to Sustainable Digital Transformation in Micro-, Small-, and Medium-Sized Enterprises," Sustainability, MDPI, vol. 14(20), pages 1-19, October.
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    7. Rui Ai & Yuhang Zheng & Serhat Yüksel & Hasan Dinçer, 2023. "Investigating the components of fintech ecosystem for distributed energy investments with an integrated quantum spherical decision support system," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-28, December.

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