Digital, touch-free solutions in the financial sector may be of increased value for customers during the Covid-19 pandemic, that could speed up efforts for digitalization in the Hungarian Banking Sector. A variety of service providers have extensive fintech solutions, found the Hungarian National Bank in its first annual study on the process of digitalization.

The financial sector is especially affected by innovative, digital solutions, spawned by a desire for agility, cost-cutting and increased efficiency. Innovative solutions are primarily retail services, though there is a growing number of corporate solutions as well, while large corporation tend to better embrace digital solutions than SMEs.

On the Hungarian market, contrary to global trends, FinTech firms are usually small or microenterprises, with predominantly B2B services, B2C making up only 10% of the sector. Data analytics, business intelligence, software development and system integration and payment services are most common activities for FinTech firms, 60% of the sector active in these segments.

The National Bank found in their survey of Hungarian Banks late 2019 and early 2020, that tough there is awareness of strengths and opportunities of digitalization, there is plenty of unexploited potential. Most frequent digitally available services include account opening, personal loan applications, insurance and account closure, with a growing number of new services continuously digitalized. There is also a growing acceptance of partnership with emerging FinTech firms in the industry.

The process of digitalization is an inevitable process in the Hungarian Banking sector, with new technological risks due to the new solutions, and new regulatory challenges arise to the new market players. The winners could who can manage the digital transformation while manging the risk, especially the emerging risks as well.