The financial intelligence units of Estonia, Latvia, and Lithuania have jointly concluded that deliberate de-risking campaigns by traditional Baltic banks have driven large-scale client migration toward Lithuanian fintech firms, concentrating money laundering risk in a single digital institution, and generating suspicious transaction patterns now visible across the region’s reporting systems.

The findings appear in a multilateral strategic study published in by the three FIUs, supported by the Bank of Lithuania, covering the period from 2021 through the first half of 2024. The study drew on survey data from 21 Estonian and 18 Latvian financial institutions, alongside payment statistics collected by the Bank of Lithuania from 143 Lithuanian firms.

Between 2021 and 2023, Estonian credit institutions terminated approximately 130,000 client relationships, while Latvian credit institutions terminated nearly 80,000, according to the study. In Estonia, 84 percent of those terminations involved Estonian nationals. In Latvia, the share was 94 percent.

The report concludes that the resulting client movement flowed primarily toward Lithuania. By 2024, Lithuanian financial institutions served approximately 125,000 Estonian private individuals and nearly 458,000 Latvian private individuals, representing roughly 25 percent of Latvia’s total population. Both figures reflect consistent year-on-year growth throughout the study period.

Concentration within Lithuania is extreme. The study found that a single Lithuanian credit institution, described as a digital bank that converted from an electronic money institution license in late 2021, accounts for more than 98 percent of all Estonian private individual clients in Lithuanian credit institutions, and over 99 percent of their associated transaction volume. 

The same institution holds approximately 99 percent of Latvian private individual clients in Lithuanian credit institutions and more than 98 percent of their turnover, according to the report. 

Though unnamed in the study, the digital bank in question is Revolut Bank UAB, which was granted a full banking license in Lithuania in December 2021, clearing the way such expanded services as card payments, direct debit, credit transfer, money remittances, cash withdrawal, and more. In 2025, Revolut’s Lithuanian affiliate launched mortgage refinance services, according to the bank’s latest annual report. 

Revolut’s expansion in Lithuania came as aggregate transaction volumes linked to Estonian and Latvian clients in Lithuanian credit institutions more than tripled in a single year, rising from approximately €16.2 billion in 2023 to €48.9 billion in 2024. Turnover tied to legal entity clients increased by nearly 3.2 times over that period, while volumes for natural persons rose roughly 2.5 times, according to the study. 

Suspicious transaction report (STR) data from both FIU Estonia and FIU Latvia also signal a shift in risk in recent years. 

In Latvia, the proportion of STRs referencing accounts in Lithuania rose from 20 percent of all reports in 2022 to 28 percent in 2024, the study found. Over the same period, the share referencing Estonian accounts remained stable at approximately 6 percent.

In Estonia, 12 percent of all STRs related to payment account transactions reference accounts held with Lithuanian institutions, according to the study. Estonian STRs referencing Lithuanian accounts nearly doubled between 2021 and 2024. The study further found that roughly 18 percent of Estonian STRs involving Lithuanian payment accounts also reference cryptocurrency transactions, more than double the approximately 7 percent average across all Estonian STR payment account reports.

The study noted that fraud became the most commonly reported predicate offense in Estonia in 2023 and in Lithuania in 2024. Reports of suspected sanctions evasion in connection with Estonian accounts in Lithuania nearly tripled over the study period.

The report also identified a separate but related vulnerability concentrated in Estonia’s credit institution sector. A single Estonian credit institution operating under a banking-as-a-service model provides correspondent banking services and virtual international bank account numbers to foreign financial technology firms and cryptocurrency platforms, the study found. 

Although unnamed in the report, the institution is LHV Bank, a BaaS provider that markets virtual IBANs (VIBANs) as a core product for its fintech and clients. 

According to the agencies, VIBANs can limit traceability, obscure ultimate beneficial ownership, and complicate the identification of payers and payees, particularly when integrated with cryptocurrency platforms.