Lithuania’s Banking Modernisation Race and the Rising Cost of Technology Failures

Lithuania has emerged as one of Europe’s most dynamic banking and fintech markets. Its progressive regulatory environment and access to the wider European payments ecosystem have attracted digital banks, specialist lenders and cross-border financial institutions seeking growth and innovation.

But as the market matures, a clear shift is underway. Regulatory scrutiny is increasingly focused not just on financial outcomes, but on the technology foundations that support modern banking operations. Recent supervisory actions from the Bank of Lithuania highlight a growing reality across Europe: operational resilience, technology governance and risk visibility are now core regulatory requirements.

For many institutions, the challenge is not intent or capability — it is architecture.

When modern banking runs on yesterday’s technology

Across the sector, inspections have identified recurring issues linked to technology and operational oversight, including:

• Limited visibility and monitoring of third-party cloud providers
• Weak governance over outsourced operational services
• Under-resourced risk management functions responsible for ICT and security oversight
• Difficulty demonstrating clear auditability and operational control

These shortcomings are rarely the result of poor governance alone. More often, they stem from platforms originally designed for batch processing, fragmented data models and siloed reporting layers — systems that struggle to provide real-time transparency in an always-on banking environment.

As regulators increase expectations around operational resilience and accountability, legacy technology becomes a structural constraint rather than simply a cost or efficiency issue.

Technology has become a supervisory concern

The regulatory focus now extends beyond traditional compliance into how banking systems operate at their core.

Industry shifts are driving this change:

Continuous oversight of outsourced services

Cloud adoption has transformed banking delivery models. However, regulators expect banks to maintain direct, demonstrable control over outsourced infrastructure. Institutions must not only show who provides services, but also how those services are monitored in real-time.

Real-time operational risk and resiliency

Modern resiliency requires operating across multiple data centres, with at least two availability zones to ensure RPO/RTO targets are met. This architecture is critical as instant payments and automated decisioning mean operational failures can scale immediately, making real-time data traceability and system failover essential for maintaining financial stability. By replicating data nodes across several sites, fintechs can support the continuous service delivery that supervisors now demand.

Scaling innovation safely

Lithuania’s success in attracting fast-growing financial institutions has created a new challenge: growth often outpaces operational maturity. Regulators now expect governance, risk monitoring and audit capabilities to scale alongside product innovation.

Why architecture matters more than features

Many banks have attempted to modernise by layering new digital channels or middleware onto legacy cores. While this approach can accelerate short-term delivery, it often increases complexity behind the scenes.

Disconnected systems create gaps between transaction processing, reporting and risk monitoring. Data must be reconciled across multiple environments, audits become reconstructive exercises, and oversight of third-party dependencies becomes difficult to demonstrate.

Modern regulatory expectations require something fundamentally different: a single, consistent operational truth that can be observed, audited and replayed at any time.

A different approach to operational resilience

A different approach to operational resilience

At SaaScada, we believe the industry’s current challenges are architectural rather than procedural.

Our platform was designed around an event-driven model where every transaction, calculation and operational action is recorded as a time-ordered data event. Instead of storing only the latest account state, the platform maintains a complete and immutable operational history.

This approach directly addresses many of the shortcomings regulators are now highlighting:

• Continuous auditability — audits are replayed from recorded events rather than reconstructed from reports
• Real-time risk visibility — operational and financial activity can be monitored as it happens
• Cloud accountability — banks retain full transparency and control over system behaviour, regardless of infrastructure provider
• Operational traceability — every decision and outcome can be explained, verified and reproduced

By aligning operational processes with real-time data, institutions gain the ability to demonstrate control — not retrospectively, but continuously.

Supporting Lithuania’s next phase of growth

Lithuania’s regulatory direction does not signal a retreat from innovation. Instead, it reflects the next stage of market maturity: ensuring that rapid growth is supported by resilient and transparent infrastructure.

Banks are now expected to prove that their technology can support operational oversight at scale, particularly as European frameworks such as the Digital Operational Resilience Act (DORA) come into effect.

Institutions that continue to rely on fragmented or legacy architectures may find compliance increasingly complex and costly. Those built on modern, event-native platforms are better positioned to adapt — not only to regulatory change, but to evolving customer and market demands.

Modernisation is no longer optional

The modernisation race in Lithuania is entering a new phase. Success is no longer defined solely by launching digital products quickly, but by operating them safely, transparently and with continuous control.

Technology is no longer just an enabler of banking strategy; it has become a determinant of regulatory confidence.

For banks looking to grow across Europe, the lesson is clear: modern infrastructure is not simply about innovation. It is about building a foundation capable of meeting the operational expectations of modern supervision — from day one.