Financial sector changes and technologies: a look at fintech in Latvia

Abstract

Purpose. To research drivers and technological issues in the financial sector with regards to fintech companies in Latvia.
Methodology. Interviews with leading fintech industry experts in Latvia. The research team conducted nine expert interviews out of thirty potential expert interviews within the research: six C-level expert interviews, two expert interviews with heads of IT and two expert interviews with heads of HR.

Findings. Increasing competitiveness among incumbent market players has forced traditional business model modification; investor demand for continuous cost decreases has led to the dismissal of highly skilled and paid employees with the result that evolving and accessible technology has magnified entrepreneurial behaviour. Fintech companies are primarily focusing on customer-centric automatized processes that are designed based on descriptive and predictive analytics models developed by business analysts and data science teams. Fintech companies are not only changing the financial sector by offering more choices to their customers but also providing technology companies with new niches and possibilities to expand their business.

Originality/value. We empirically researched what kind of changes have arisen in the financial sector; what the main drivers are for those changes; what kind of technologies or platforms are used by fintech companies; and what kind of technologies or platforms are considered as prospective for the financial sector in Latvia. The answers to these questions could offer guidance for financial sector representatives, which could be helpful for development, taking into account that technology’s correlation with social acceptance has driven digital transformation changes.