Lithuanian fintech is compact and agile, with Jekaterina Rojaka (Creditinfo)

When we talk about Lithuania, we're talking about their small but strong economy. Actually, Lithuania is not a small country, it's a big country compacted to your convenience. It's easy to reach, it's pretty much all in one place, it's great work, life, balance. Lithuania is a very agile, Lithuania is very computerized and a very mobile. And for our size, we currently have 263 Fintech companies. They are working not only for Lithuania, they're working globally. When I lived in Copenhagen, my wife and I aim to travel to one new country per month on average. So sometimes one country in one month, a little weekend break, and sometimes two or three countries every few months. And one thing I grew to realise was that many of the European highlights were slightly snookered by a mix of familiarity and high expectations. The Eiffel Tower, yeah, looks exactly like the Eiffel Tower, the knels of Amsterdam are cool, but in exactly the way described and the Colosseum, actually the Colosseum really impressed me, but you surely know what I mean. So I started to develop a taste for places I knew less about. Budapest, Sarajevo, Lubek, Talin, Riga. The latter three playing a key role in Dracan, my first novel which is available for free as an ebook on Amazon and Vilnius, the capital of Lithuania. We loved Vilnius. It has a charming enough old town and has some lovely sights within easy reach. I think me in front of Track Eye Island Castle is still my sky profile since I've forgotten how to change that, but that's not what made it so memorable. For us, what keeps it in our repertoire of travel stories is that it was perhaps the only country we have travel to, where there was no standby team of fluent English speakers, ready to bail us out of any situation. We had to randomly point at menus, we had to mime an airplane to find the correct bus to the airport, and we felt like we were really travelling. I'm about to hear how much has changed since then. Welcome to Heart of Lane Money to Strangers with Brendan Lagrange. Yucca Tareena Royaca, Chief Commercial Officer at Credit Info, Lithuania. Welcome to the show. Yucca Tareena, your background is in macroeconomics, which is something I want to take advantage of in a minute, but before we get into that, would you mind briefly walking through your career with me, talking about how you arrived at the current role you have at Credit Info? Hi, Brendan. First of all, thanks a lot for inviting me. It's a huge pleasure to be with you here. Yeah, macroeconomics, they're kind of a passion of mine for more than 15 years. I've started from the banking sector, I started from the central bank, Bank of Lithuania, then they jumped to the commercial banks, working for Nordalbe, Nordalbe, Lodshellandas banking, then to different banks. Also in the between I was working for the World Bank couple of years, talking to most of the commercial clients, also individuals, banking clients about what has happened into the economy. How can we understand the trends? Lithian economy is like going through the rollercoaster. Absolutely. We had many crisis, so explanation was needed. Explanation is needed sometimes even now. Finally, in 2018, I actually started working for the public sector, which was totally different experience. Yeah, indeed. We're really here to talk about you as Chief Merchal Officer at Credit Info, but I do want to take advantage of that experience you've got explaining the market, explaining the economy. When I was doing some research for this, I was quite surprised to see that Lithuanians actually the biggest economy in those Baltic states, but in its current form, independent from the Soviet days, only 30 years old. She said, "A rollercoaster, both I imagine in a short term and the longer term." So, a form of ice minister of the economy here, I can't pass up that opportunity to say, "What is a quick history lesson? What does that landscape look like?" Yeah, well, I like the basics. So when we talk about Lithuanian, what we're talking about, they're small but strong economy, population, like 2.8 million people. It's not extremely high, but with the labor pool of 1.5 million people, it's pretty agile, I would say. If we talk about the size of the economy, the GDP size is roughly about like Luxembourg or Croatia, maybe two times less than Ukraine, but Ukraine is a huge country while Lithuanian is a very, we don't like to say it's a small country actually, and we just held the NATO summit in Vilnius in July. So we had a very nice ad, Lithiania is not a small country, it's a big country, compacted to your convenience. Because Lithiania is not relatively small country, it's extremely compact, it's easy to reach, it's pretty much all in one place, it's great work, life balance, and that's why Lithiania is feeling kind of renaissance for re-immigration. Well, Lithianian GDP, if compared to 2000, had grown five times. If compared to 1995, grown 8.6 times. So it was really, really expanding, and most of this expansion is interconnection with the other countries, it's international trade. So more than 85% of our GDP is because of the trade, international, FDIs, etc, etc. But you mentioned that Lithiania is only 30 years old of independence, but this integration comes centuries back, and Lithiania was a huge sometimes and very integrated economically. And this helps us to leapfrog, and leapfrogging was probably the largest idea behind Lithianian success. We are first place in European Union by the Greenfield, FDIs, performance ending. Also, I was personally very disappointed when the World Bank decided not to renew is of doing business indexes, because in 2019 Lithiania took its highest place, and at that point I was vice minister of the economy. And next year we were foricast to take top five. But you know, the next year the COVID happened, and also the index was stopped. But Lithiania is a free economy. In economy of freedom index we are number 12, and the most recent changes are pretty much associated with the finance and sector of the fintechs, and the younger population that's also jumped into the labour pool. You just stopped me somewhere because I can talk about the basic figures and about my economy quite a long time. But the Lithianian economy has a lot of different sectors, and the importance of the sectors kind of classic, I would say. The manufacturing is comprises roughly about one fifth of the economy. Lithiania also is pretty much in ICT, and the part of that is growing very fast, and there are a huge number of companies that prefer Lithiania for global business centres or ICT services such as Oracle or Uber or Revolut, well, there's really really good brand names, worldwide brand names that are actually sitting in Lithian, and also helping for economy to extend. Maybe it is just me by the sounds of it, who wasn't aware quite how well that the way he was doing it. I think you've mentioned a couple of words there, agile and integrated two words that really are sort of brand names almost of the fintech movement. And so maybe we can talk a little bit about the fintech industry there because my mind, maybe shouldn't be saying this, but Estonia is the name that sort of jumps out from that region in terms of the fintech boom. But again, maybe that's just me not realizing quite what's happening. So, talk to you about that side of the economy. You're very correct, Brandon, on that many technologies started in Estonia, but with the fintech, while Lithiania is worldwide node for being as a fintech hub. For our size, we currently have 263 fintech companies. So it's really a large number. We have like 7,000 people employed in their fintech sector. They are working not only for Lithiania, they're working globally with 25 million customers, all over the world and all over the Europe. For them, Lithiania is a kind of a trampline to reach a huge European market. And most of those fintechs is one-third of the companies are working with the payments, roughly about 70% on the financial services, 10% on digital banking, 10% in lending, and then pretty much equal shares, then blockchain, cryptocurrencies, big data, a red tech, in short tech, and other different sectors or sub-sectors. So, fintechs, for Lithiania, they were kind of a game-changers. I can say it for sure because I was part of a classical banking sector. Those disruptors were extremely good for the overall banking sector, but especially for the customers because customers comes first and customer knows the best. That also it pushes a more speed for this stabilized classical banking sector. I guess that's where that leapfrog in comes in. It's in that time that the world was digitizing the world was opening up borders as well and seeing that benefit there which is fascinating to hear and maybe brings me to the main subject of the day credit info's work within that space. So Yekaterina, how long has credit info been in the country and how does it fit within that landscape that you've been sketching for us? Well, a credit you've always established in 2000 for a Lithuanian company. It's quite old already and in the very beginning it was the company that had to provide most of the and collect most of the data manually. Going from one financial institution to another financial institutions, there was a pencil and yeah going through the list of people who are you know latent payments etc etc. So for those 23 years credit info was facilitating access to violence in Lithuania and for Lithuanian it's the first and the largest credit duo and has their largest number and amount of data about both companies and individuals. We have like 1400 business clients and roughly about one third of working population in Lithuania are our clients. We provide and are used heavily by commercial banks by the financial sectors, well credit unions, leasing companies, consumer credit companies, telecommunication companies and other companies. We connect all the possible registers for the convenience of our customers. But again the probability that you will be checked with the credit info data when you're applying for a credit I believe it's 80% or even more. Yeah and it's not every country that we've got credit bureaus that cover both the business side and the consumer side. Maybe we can start with the consumer side there. Is it a comprehensive credit bureau with positive and negative data? Credit bureau score everything that we'd be familiar with in other markets? Absolutely. So Lithuania has both parts of the stories. It's a database of negative data and also all the positive data it combines both. But what have changed quite a lot since 2000. The core of our business today is pretty much this value added information from being our source for raw data to the provider of the decision analytics and to the decision making. Consumer ratings that we calculate from the different sources mostly from the negative information because we are also very complied with the GDPR. So we are concentrating on the companies rating, the default rating, the bankruptcy rating that again for Lithuania is very important. We've been through many bankruptcy crises during those 30 years of independence. We have very extensive economic cycles. We also have a ratings on their debt collection scores. It's QAC, it's definitely AIG and all their decisions that are important for our customers from very different sectors. And knowing again what we haven't been mentioning but it's a huge part of our nowadays routine. It's the Russian aggression towards Ukraine and of course quite a lot of Ukrainians came to Lithuania that we also have some products to integrate them into the economy because now with more than one year being a residence or living in Lithuania, they can start applying for credit and settle down. So we do provide also information from our Ukrainian Bureau. Yeah, very timely. Today's as we record this is actually a Ukrainian independence day. So a perfect time to be discussing that. Yeah, and my parents are actually from Ukraine and so for me it's definitely definitely very special. What it also demonstrates, you know, the breadth of the products you offer is some of that enablement by technology that we have today. We're 20 years ago a country of Lithuania size would struggle to have data available at the volumes that we needed in those days to create all these different ranges of decisions. We might have had a basic credit score but to be able to do all of these different data checks and to empower these different decisions these days, I assume is helped a lot by all the sort of modern technology, the sort of fintech that's been happening behind the scenes in credit info, the different analytical and data tools that are now available. Absolutely. Well, Lithuania is rich with data. I would say that in European context we have very structured and long-time series compared to our independent lifetime economically. But again, what is beautiful while working in credit info because you are connecting all the dots. You have access to their huge number of data and you can provide those automatic decisions for the companies. The raw data and the valid edits are information just in seconds and not only from Lithuania but also across the Baltic countries because well, the Baltic countries are very often working together and provided services for the Baltic region despite of the differences in their data structure and some cultural differences. Now, definitely, when you start business in Lithuania, it's much easier with the help of the credit info and have it in one report or one API which we could only dream for like 10 years ago. Yeah, that's amazing. So I hadn't realized that. So is that sort of special request or how does that data sharing work? Well, usually provide services within the country but since we have a lot of the fun Baltic companies, they harmonise the strategies across the Baltics and every single country and provides their small structure of data. And again, the automatic decisions like ADM that we currently offer to our clients can make it easily accessible in just a couple of seconds collecting the data from all the Baltic countries if needed. It's probably the picture that we would like to see in the service sector for all European Union. Yeah, yeah, exactly. That should come true and we have been talking about that during the period that I was in the public sector but again, the structure of the data is so different among the European countries. So this is a kind of advantage of having disadvantages in the beginning for the Baltic countries. Yeah, Lele Pragan. Yeah, very much is because as you say, it's a fantastic model for what should be simple to do within something like the EU. But I've in a previous role was working with international regional divisions where we've said, okay, you know, as a region surely we could share some data. And it's been a nightmare because it's been the old legacy systems built up in certain ways. And you've got to undo a lot of that or work very differently to try and work around systems that have taken 40 years to put in place. Whereas when you've built them in agile ways and modern technologies, you can leapfrog that something we can aspire to in other similar blocks around the world. You're capturing. I want to talk to something slightly different. When I went to LT dot quiddit info dot com, I saw strongest in Lithuania, a big button there on the front and click that. So tell me about what that series of awards or that competition is. Yes, strongest Lithuanian is a kind of our brand name. It's our excellence certificate for the companies that are providing their financial statements and the financial statements are sound. In our environment, the companies became really thick skinned. Well, every company has its own peak, but the Everest is also for the strongest. So Lithuanian business environment is created for all the companies, but only the strongest and this flexibility to sexily go through the numerous challenges and kind of unpredictable situations and conditions that Lithuanian business environments presents. And we have different excellence labels because some of the companies could be just start-upers. I'm working for several years, like three years old and already showing their very good performance. Some of them enjoying this excellence in four decades and some of them in from the very beginning of the credit for history in Lithuania. So those companies that have this certificate and have this award, these are the best companies of the Lithuania and market actually. And it's kind of a prestige also for the small company to join the club. So we're very happy that credit for a name is associated with the strongest companies. It is the guarantee that the company would be a good partner. So it's pretty much cream of the crop, the best of the best. Perfect. So if anybody wants to go and see who's won those awards or just more broadly, like me has been inspired about what's happening in Lithuania and what the potential there is, if people want to go and follow up on that, they want to read more about credit in for Lithuania. Where's a good place for them to go online to learn more? So the information is definitely is is easily provided by the Strogus and Lithianian credit in-for websites, but it's not only in Lithian it's also in the Baltics and it's very popular in Iceland too. And especially in the period of crisis and when the market is looking for the new connection, this is their sign that you can easily jump into the international connections, which also helps to grow your business. - No, it's a great point when you're looking at expanding, it's really helpful to have a name you can trust or at least a list of companies that have been certified that you can reach out to. - Yikaterina, I've now, I think you're the third guest from Credit Info, one of the things I know about the company is that it's always got great blogs, it's got great material. If anyone listening wants to learn more about the Credit Info story, where's the good places for them to go to stay in touch? - Well, first of all, if we're talking about the Tienia, we can be easily found on any social networks, such as LinkedIn or Facebook with our popular products and our other information and definitely our internet page. But we are in Lithia, very kind of compact country and we know each other. (laughs) At least through one more acquaintance, you will definitely reach someone from the Credit Info pretty much directly. - Yeah, and as you said, if people are not in Lithuania, it is very easy to reach. I recommend it as a holiday destination. It's not visitors as often as it should be. We had a really great time when we were in fullness. But yeah, co-foot business as well by all accounts. Yikaterina, before I let you go, you've mentioned about the rollercoaster, the growth that we've been seeing in Lithuania and the broader region. As you look ahead, is there anything on the rise than anything that we should be following and keeping an eye out either in Lithuania or with the work credit info is doing there? - Absolutely. We're rollercoasters pretty much not ending. Neither fall if in and off for the Baltics. People are kind of become an over optimistic during the cycles and then over depressed during the downside. So I believe that in the extremely changing environment, you should keep your hand on the pulse pretty much every single second. And that will keep you alive and that will keep you strong and healthy. - Yeah, wonderful message for everybody. Yikaterina, thank you again for your time. It's been wonderful hearing about what's happening in Lithuania and again, hearing the great work that credit info is doing in another market. - Thank you very much, Brandon, for having me. And I also very much hope that now you learn about Lithuania a little bit more. But if you have any questions, don't hesitate to contact me directly. - And thank you all for listening. Please do look for and follow the show on your favorite podcast platform and share the updates widely on LinkedIn where lending nerds are found in our largest concentration. Plus send me a connection request while you're there. This show is written and recorded by myself, Brendan LeGrange in Brighton, England. Show music is by I Am Wake and you can find show notes and written transcripts at www.artolinmoney2strangers.show. Or just www.htlmts.show and I'll see you again in next Thursday.