20 June 2022
The Magyar Nemzeti Bank is publishing its FinTech and Digitalisation Report on the global and Hungarian FinTech ecosystem and the digital maturity of the domestic banking and insurance sector for the third time. In 2021, the digital transformation of the financial sector gained new momentum both at international and domestic level. In the banking sector, there has been substantial development at several participants, also supported by the MNB’s digital transformation recommendation. An increasingly wide range of banking products are available through digital channels, and users are also more and more open-minded: as a new record, already more than 80 percent of customers use digital banking channels. Simultaneously with this, the domestic FinTech sector continued to expand. As a result, there are already close to 150 active FinTech enterprises in Hungary. The digital maturity of the domestic insurance sector has strengthened compared to the level seen a year ago, but on the whole it is still at medium level.
In 2021, digitisation of the global financial sector gained new momentum, particularly due to the strengthening of the EMEA (Europe, Middle East and Africa) region. The widening of the range of digitally accessible financial services meets real customer demand. Customers continue to insist on convenient and fast digital solutions after the pandemic. In parallel with this, the importance of financial and digital inclusion has increased. Both private and central bank initiatives strive to prevent the exclusion of consumers not yet having access to digital financial solutions. The issue of sustainability has also gained strategic importance as digital developments may provide significant support for the measurement of environmental impacts and the implementation of responsible financial decisions.
The domestic FinTech sector continued to expand during the pandemic and there are already almost 150 companies in Hungary actively pursuing FinTech activity, employing over 8,000 persons. The majority of the domestic innovative companies continue to be engaged – in partnership with banks and insurers – in financial software developments and system integration, payment services, data analysis and business intelligence. Domestic FinTech companies have significant export activity, also supported by high value added.
The convergence of banks with lower level of digitisation has progressed in 2021; nevertheless, the level of development of the entire sector continues to be medium. By 2021, netbank and mobile banking platforms have practically become the main customer communication channels; as a new record, already about 84 percent of customers use digital banking channels. However, last year only minor progress was made in the digitalisation of internal operations, which may jeopardise institutions’ individual and sector-level competitiveness vis-a-vis emerging innovative actors already in the medium run. Banks’ digital transformation strategies, elaborated along the MNB’s recommendation, the implementation of which is closely monitored by the MNB, contribute significantly to the increasingly digitised and efficient operation of the financial sector.
The digital maturity of the domestic insurance sector has strengthened compared to the level a year ago, but – based on the comprehensive domestic insurance digitisation survey prepared by the MNB for the second time – overall it can be considered to be of medium maturity. Although the most popular retail insurance products are already widely available online in the sector, it would be useful to strengthen the digital accessibility of a wider range of products. One way to foster this could be the development of cooperation with innovative participants. A more profound digital preparedness of the management and employees and the strengthening of an organisational culture that supports digital transformation to a larger degree – the presence of which can be already identified in the banking sector – may also support development.
https://www.mnb.hu/en/publications/reports/fintech-and-digitalisation-report