In the past year, the digital transformation of the financial sector has gained new momentum, both internationally and domestically, said Anikó Szombati, Managing Director of the Magyar Nemzeti Bank (MNB) responsible for digitization and FinTech development. According to the expert, due to the impact of Covid, a wider range of customers became interested in digital banking solutions, and this increased interest spurred banks to accelerate digital developments.
Accelerated life also appeared on the lending side: in 2015, 8 per cent of mortgages in Europe could be disbursed within 1-2 working days in Europe, compared to 53 per cent of personal loans, of which 21 per cent were already on the day of the application. got the loan. In contrast, in 2020, 46 per cent of those applying for a home loan received the loan within 1-2 days of applying, while 23 per cent had already received the loan on the same day, while in the case of personal loans only 8 per cent need more than 1-2 days after applying. wait for the loan, nearly three-quarters and 74 percent of them can already spend on the loan they received on the day they apply. In the case of personal loans, Hungary is also on the “immediate” list, but in the field of mortgage lending, we are still a long way from making a decision on the day of receiving the full loan documentation – and the Hungarian procedure is definitely slower due to the notarial procedure.
FinTech is becoming more and more home
Nevertheless, the FinTech sector has developed a lot in Hungary as well. By the end of last year, the MNB had registered 146 active Hungarian companies engaged in FinTech activities, which employ more than 8,000 people. Their total sales exceeded HUF 170 billion last year.
Most of the developments of Hungarian companies are still not on their own, most of the Hungarian FinTech companies work in partnership with banks and insurance companies. The main areas of activity are data analysis and business intelligence development, financial software development and system integration, and payment services – these three areas of development cover 62 percent of domestic FinTech companies.
Almost everyone is online, mobile banking
Although the catching-up of less digitized banks in the banking sector began in 2021, the development of the sector as a whole can still be considered moderate. A major change is that by 2021, virtually the netbank and mobile banking platforms have become the main customer communication channels. In the corporate area 95, and in the retail sector, about 84 percent of customers now use at least some digital banking channels. In both customer types, 45 to 46 percent are those who they conduct their banking affairs almost exclusively through net or mobile banking. Logically the use of mobile banking is stronger – 26 per cent – among retail customers, 9 per cent of corporate customers regularly do their banking over the phone.
Products from the cloud
Digitization has also brought a breakthrough in the digital accessibility of products. In a single year, the proportion of banks offering digital account opening has risen from 70 to 100 per cent, and, as we have already indicated, after 60 per cent in 2020, 90 per cent of banks had the opportunity to apply for a personal loan last year. In contrast to the previous one-third, overdrafts can be applied for digitally at almost half of the banks.
At the same time, the market is essentially in place in the area of account closures, and the MNB also pointed out to banks that only a small amount of progress has been made in the level of digitalisation of internal operations in the past year. According to the central bank, this could jeopardize the individual and sectoral competitiveness of institutions vis-à-vis emerging innovative players even in the medium term.
The development of the domestic insurance sector also progressed in 2021. Although the online availability of the most popular retail insurance products – home, casco, kgfb and travel insurance – is already common in the sector, strengthening the digital availability of a wider range of products would be useful, according to the central bank.