The Western Balkans Are No Longer a Digital Afterthought
By Suad Seferi ·
For years, the Western Balkans have been treated as a secondary market by global technology companies. The region was often seen as too small, too fragmented or too institutionally complex to justify serious investment from major fintech and artificial intelligence players. But that view is becoming outdated. A new investment case for 2026 suggests that the Western Balkans may now represent one of Europe’s most overlooked digital opportunities. The region, made up of North Macedonia, Serbia, Albania, Bosnia and Herzegovina, Kosovo and Montenegro, has a combined population of around 18 million people. That makes it comparable in size to some well-established European markets, but with far less competition from global fintech and AI platforms. The central argument is simple: the Western Balkans are not underdeveloped because users lack demand. They are underserved because the infrastructure, regulation and payment systems have historically made digital services difficult to scale. That is now changing. One of the most important shifts is the region’s gradual integration with the Single Euro Payments Area, known as SEPA. For businesses and consumers, this is not just a technical banking reform. It changes the cost and speed of cross-border payments. In markets where SEPA has become operational, business transfers that were once expensive and slow are becoming cheaper and faster. This is a major signal for fintech companies. Payment processors, neobanks, cross-border transfer platforms and embedded finance providers have often avoided the region because of high transaction friction. As that friction falls, the Western Balkans become easier to serve. The region starts to look less like a risky exception and more like a reachable extension of the European digital market. The opportunity is especially clear in e-commerce and freelance work. Many users in the region are digitally active, but still lack access to the same financial tools available in the European Union. In several Western Balkan countries, global payment platforms are limited, incomplete or unavailable. Some users can send money but cannot receive it properly. Others cannot access modern checkout tools such as Stripe or full-featured PayPal services. This creates a painful gap for freelancers, creators, online sellers and small businesses. They can work globally, sell online and serve foreign clients, but the payment infrastructure around them remains weaker than their digital behavior. The result is a market with high intent but limited financial choice. For fintech companies, this is exactly where opportunity exists. The region does not need to be convinced to go digital. Much of the population already lives digitally through smartphones, social platforms, e-commerce and remote work. What is missing is a modern financial layer that matches that behavior. The small and medium-sized enterprise sector is another major opportunity. Across the Western Balkans, many SMEs face limited access to finance. Traditional banks often remain conservative, relying on older credit assessment models and prioritizing established clients. This leaves many smaller companies, startups and informal entrepreneurs without flexible financing options. Artificial intelligence can play a major role here. AI-driven credit scoring, alternative data analysis and embedded finance could help evaluate businesses that traditional banking systems overlook. Instead of relying only on old financial histories, fintech platforms can assess transaction patterns, digital sales, invoices, cash flow and other real-time business signals. This could unlock financing for “thin-file” businesses that are active but poorly served by banks. It could also help the region move away from a financial system dominated by slow processes, physical paperwork and conservative lending practices. The AI opportunity is not limited to finance. The Western Balkans also have a strong talent argument. The region produces a high share of ICT graduates compared with the European average, and many young professionals already work in software development, outsourcing, design, engineering and digital services. This creates a foundation for AI production, not only AI consumption. For global AI companies, the Western Balkans offer a combination that is difficult to ignore: relatively lower operating costs, strong technical talent, geographic proximity to the EU and a regulatory environment that is increasingly aligning with European standards. This makes the region suitable for AI research hubs, applied AI development centers, data operations, localization teams and specialized product labs. The regulatory landscape is also becoming more favorable. As the EU AI Act becomes the main reference point for artificial intelligence governance, Western Balkan countries are beginning to align their own policy environments with European rules. This gives international companies more confidence because the region is moving toward familiar regulatory standards rather than creating completely separate systems. North Macedonia’s VEZILKA AI center, Serbia’s AI infrastructure initiatives, Albania’s public-sector AI ambitions and regional discussions on responsible AI adoption all point in the same direction: the Western Balkans are entering a more serious phase of AI development. This does not mean the region is without risk. Institutional barriers still exist. Regulation can be inconsistent. Banking systems remain conservative. Digital skills are uneven. Public-sector implementation can be slow. Some markets are still too fragmented for companies that expect immediate scale. But the investment case is not that the Western Balkans are already perfect. The argument is that the region has reached a tipping point. The old barriers are weakening while the demand remains strong. That creates a window for first movers. Companies that enter early may gain brand loyalty before the market becomes crowded. Payment processors c…