The Bank of Lithuania has prepared a Guidelines for Compliance with Risk Management Requirements for Electronic Money and Payment Institutions (hereinafter referred to as the Guidelines) project. These guidelines aim to enhance the maturity of the FinTech sector and ensure effective risk management.
Objective of the Guidelines
The objective of the guidelines is to detail the risk management requirements applicable to this sector, communicate expectations, discuss the risk management system and culture, necessary documentation, risk analysis processes, and the processes for identifying, assessing, planning, and implementing risk mitigation measures. The guidelines also provide examples of best practices and common mistakes.
Scope of Application
The guidelines will apply to electronic money and payment institutions licensed by the Bank of Lithuania, as well as branches of foreign electronic money and payment institutions operating in Lithuania. The provisions will need to be implemented following the principle of proportionality, taking into account the size, scope, and specifics of the institution's activities. It is also recommended that smaller institutions reasonably adapt and apply the guidelines in their daily operations.
Nature of the Guidelines
The guidelines are advisory in nature, meaning that if specific obligations related to risk management are set out in legislation for this sector, they must be implemented. However, institutions should make reasonable efforts to implement the best practice examples outlined in the guidelines.
Effective Date
The guidelines are not yet approved and are planned to come into effect in 2025. For more specific effective dates, it is necessary to follow the announcements by the Bank of Lithuania.
Detailed Risk Documentation:
Mandatory Documents: | Recommended Documents: |
- Risk strategy | - Risk policy |
- Risk management procedures | - Risk management process manual |
- Risk register | - Incident register |
- Quarterly risk maps | - Risk response plan |
- Annual risk report | - Risk communication plan |
- Risk management improvement plan | |
- Risk progress report |
Preparation for Implementation
As the number of market participants expands, electronic money and payment institutions are receiving increased attention from supervisory authorities. Therefore, it is believed that institutions' efforts to integrate stricter risk management requirements into their operations will be highly valued. We recommend preparing for the implementation of the guidelines in advance.