Latvian banks plan for future despite present troubles

The event titled “The Future of Financial Technology in the Baltics and EU” featured Vice-President of the European Commission Valdis Dombrovskis as keynote speaker and was organised by the Association of Latvian Commercial Banks (ALCB), the Estonian Banking Association and the Association of Lithuanian Banks.

In his speech Dombrovskis said Europe was a leader in Financial Technologies (FInTech) but the potential for future growth in this sector remained huge.

"For Europe to succeed in FinTech we need to make sure our economies are able to grow and scale up within the EU," said Dombrovskis.

As an example he cited a proposal put forward two weeks ago that would introduce an EU licence for crowdfunding.

"This would help platforms to scale up and offer more choice for investors.... it may sound obvious but you need a crowd to crowdfund," Dombrovskis told his audience.

"Next week we will propose to make cross border euro payments cheaper, even in non-euro countries," he added, saying this would promote cross border financial services.

According to the organizers the goal is to foster a dialogue between industry experts regarding the European Commission’s financial technology initiatives, as well as the development of a more competitive and innovative financial sector in the Baltics.

However, much attention over the coffee and canapes away from the main discussions was also necessarily focused on the current reputational and regulatory problems faced by Latvia in particular but to a lesser extent by Estonia and Lithuania concerning money laundering, shell company accounts and huge pressure from the United States to put a stop to illicit cash flows from Russia.

The CEO of the Latvian Association of Commercial Banks, Sanda Liepiņa, was good enough to take time to speak with LSM about the current situation and the urgent need to resolve regulatory issues to rehabilitate the sector's image. You can listen to the full interview in the attached audio file.

An expected report on the Latvian banking system due to be released in the fall by MONEYVAL (The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism) will be a crucial indicator for the sector, Liepina said, and vowed the Association would act with all possible speed to make sure the country's image starts its road to rehabilitation in the coming months.