The growth of the fintech sector is unbroken: in 2021, there were 175 such active companies operating in Hungary. Digitalization has continued to grow, and has also brought increasing business potential for fintech companies, so even with mergers and liquidations, the Hungarian sector has continued to expand, Világgazdaság reports.
According to the latest available annual reports, at the end of the 2021 financial year, the turnover of the Hungarian fintech sector exceeded HUF 220 billion (EUR 568.8 million), an increase of HUF 50 billion (EUR 129.2 million) compared to the previous year, according to the Fintech and Digitalization Report published by the Central Bank of Hungary. Several firms with growing potential were able to increase their revenues by an average of HUF 421 million (EUR 1.08 million), or HUF 150 million (EUR 387,500) at the median, almost double the same figures for 2020.
Some of the new entrants are start-ups, while others are subsidiaries of long-established international players.
A significant proportion of fintech firms in the Hungarian market, around 85 percent, remain in the business-to-business space, but their share is declining as the market matures.
In line with the trend of previous years, the domestic fintech sector continued to be dominated by micro and small enterprises in 2021, with the combined share of these smaller firms reaching around 80 percent. The high share of micro and small firms can be observed in both domestic and foreign-owned fintech firms.
Fact Financial technology
(better known as fintech) is used to describe new technology that seeks to improve and automate the delivery and use of financial services. At its core, fintech is utilized to help companies, business owners, and consumers better manage their financial operations, processes, and lives. It is composed of specialized software and algorithms that are used on computers and smartphones.
Large firms typically have a complementary or new activity in fintech and are older start-ups, while smaller firms are typically set up with a fintech focus and are typically younger start-ups. In terms of the range of services provided by such firms, most of them in 2021 were active in financial software development and systems integration, characterized by uninterrupted collaboration with established players in the market.
Between 2015 and 2022, the number of people employed in the sector nearly tripled, with the total number of employees increasing by 20 percent from 2021 to 2022 alone. This expansion is also in line with changes on the international scene.
The breakdown by service area remains unchanged, with data analytics and business intelligence continuing to employ the most people, accounting for more than half of the sector’s growth. In terms of year-on-year variation, blockchain was the only area to see a decline in 2022, with a 20 percent reduction in the average annual number of employees. In line with the change in the number of businesses, the increase in the number of employees in the investment, finance, and insurance market is also notable, with a 23 percent increase in the number of employees compared to 2021.
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