While the FinTech revolution is long under way in Western Europe, the movement appears to have finally reached the CEE region, including Hungary. The second annual FinTech Show in Budapest provided a great insight into the Hungarian FinTech scene. Hungarian banks, insurers, regulators and FinTechs came together for this one-day event to share their perspectives on PSD2, instant payments, InsurTech, regulatory sandboxes and Blockchain. Revolut and Figo, two established FinTechs, provided an international context, while 12 local FinTechs pitched their solutions for the FinTech Show award. Here’s a recap of the main takeaways from the event.
The intro sessions from the Hungarian FinTech association and the national bank highlighted the increasing interest shown by local incumbents, banks and insurers alike, in learning about and taking advantage of the local FinTech and InsurTech scene. A multitude of FinTech accelerators, incubators and academies have been established in the last 12 months, incentivising the emergence of innovative start-ups. However, the event highlighted how local start-ups are lagging behind in their ability to offer market-ready solutions that incumbents could potentially support and implement in their own offering. Moreover, an incumbent vs. start-up roundtable clearly demonstrated the huge gap between the two sides when it comes to company culture, objectives and perspective. If these differences are not overcome in the near future, more established international FinTech solutions could appear in the market and capture the growing demand for innovative solutions.
Just like in most European countries, instant payments is a hot topic in Hungary too. Nets, the established payment processor and acquirer, shared the Nordic success story when it comes to the effective implementation of instant payments, which Hungary will aim to emulate in the next 2 years. There is a huge cash market to be moved to electronic payments in Hungary, and the instant payment initiative is expected to kick-start that process. Peer-to-peer payments, e-commerce and bill payments are believed to have the most potential to provide growth, while most speakers agreed mobile payments will have a hard time if they are to challenge cards in in-store environments. Suggestions that education will be key in popularising instant payments were underpinned by the scepticism shown by the expert audience towards the potential of the initiative.
Finally, the winners of the 2018 FinTech awards were announced: Aggreg8, a financial data aggregation service, was chosen as the undisputed winner. The event highlighted that Hungarian incumbents and customers alike are keen on innovative solutions; it is now down to the local start-up world to deliver before more established international FinTechs realise the potential that the Hungarian market has to offer.