An increasing range of banking products are available digitally, and the digital maturity of banks is continuously improving, Anikó Szombati, Managing Director of Hungarian National Bank, said on Monday in the latest FinTech and Digitalization 2023 report of the central bank.
Fact The National Bank’s annual FinTech and Digitalization Report seeks to provide insight into recent domestic and international developments in financial innovation, digitalization, and their underlying technologies, which are becoming increasingly dominant in the Hungarian financial markets. In this way, the central bank intends to contribute to strengthen the digitalization level of the domestic financial system, for which it intends to provide active support.
The managing director added that at the same time,
the expansion of the domestic FinTech sector has continued, with 175 active FinTech companies operating in the country, employing nearly 9,000 people,
with a combined turnover of more than HUF 220 billion (EUR 582 M) in 2021. The level of digitization of insurance companies was also examined, remaining at a medium level, although it shows continuous improvement.
According to Anikó Szombati, banks need to be prepared to maintain their face-to-face customer services in parallel with online administration.
The banking system’s average maturity level of 62 in 2022, reflects a steady improvement from 60 a year earlier, she said. However,
despite continued institutional progress in digital maturity, the banking sector as a whole has still not moved away from the medium maturity level.
Management continued to perform best among the seven pillars surveyed by the Hungarian National Bank, covering the typical areas of overall banking operations. This reflects the continued and outstanding commitment to digitalization by the institutions’ management, which can also be seen in the quality of the bank’s digitalization strategies.
The biggest improvement compared to the previous year was seen in the process and customer pillars – banks have prioritized digitization improvements in customer-facing and internal processes in 2022. For example,
the automation of data management processes has improved more than in previous years, and the previously observed stagnation, the spread of innovative process-oriented solutions in the sector is also showing significant progress.
She pointed out that as a result of the gradual improvement of banking products, from the end of 2022, personal loans are available digitally in addition to current accounts at all credit institutions offering such products, while there is still significant room for improvement in the digitization of corporate products. In terms of payment solutions, thanks to mobile and internet banking payment solutions forging ahead in our country, virtual cards have become predominantly available in Hungary, and touch payments and the integration of bank cards into mobile wallets are also rapidly growing.
The availability of digital notifications in the area of credit scores has continued to increase in 2022, in line with previous annual trends in most categories. Typically, improvements have been made in the retail segment for overdrafts on current accounts, allowing consumers to be more up-to-date with the current status of their credit debts as digital delivery spreads, which in turn can lead to more informed financial decisions.
Featured image by Simon Varga, via Facebook/Fintech használók közössége (Revolut, Wise, Curve stb.)