Expanding FinTech sector in Hungary: digital development continues to improve

By: Trademagazin Date: 2024. 07. 26. 11:56

The Hungarian FinTech sector shows continuous growth, there are currently more than 200 active FinTech companies operating in our country. For the fifth time, the Magyar Nemzeti Bank (MNB) has published its report on the global and domestic FinTech ecosystem, as well as the current level of digitization in the banking, insurance and investment sectors. The digitization of financial services and the rise of innovative technological solutions are unbroken, which will be controlled by the European Union within a comprehensive regulatory framework in the near future.

Stable growth and new challenges

Although the value of global FinTech investments has decreased, interest in small investments and technology solutions has remained strong. Digital payment and credit services are the most promising, although the high inflation of recent years has had a significant impact on the spread of certain FinTech business models. Cyber security challenges intensified in 2023, the number of fraud attempts and the volume of acquired data and sums of money increased, which was also influenced by artificial intelligence-based solutions. Generation Z’s openness to digital financial solutions is outstanding, so financial market players should pay attention to this age group.

Growing domestic FinTech ecosystem

The number of FinTech companies in Hungary has doubled over the past six years, and there are currently more than 200 active companies in the country. Four-fifths of FinTech companies are micro and small companies, with particular growth in the data analytics and business intelligence, blockchain and virtual payment segments. The range of services of the domestic FinTech sector has been reorganized, and new players have appeared in previously less active areas.

New regulatory framework from 2024

2024 will be a significant year in the European Union in terms of regulation of the technology and FinTech sector. A number of new legislative initiatives are coming into force, including the world’s first comprehensive artificial intelligence (AI) regulatory framework. The aim of the new regulations is to use the transformative power of AI responsibly and safely. The MNB performs supervisory tasks related to the framework of the European Union’s new, regulated crypto asset market.