No improvement without digitalization - Part Three

2018.08.16. 08:00 | Hírek

A cikk magyar verziója itt olvasható.

This is the third part of the article. Previous part << >> Next part

There are many publications nowadays about the need to change to digitalization. But how does it change financial administration and how prepared are the Hungarian banks and society for such changes? We investigated this question with Bancard Ltd. experts.

In 2018, Budapest Bank announced the introduction of a new mobile technology arriving later this year and only for corporate customers at first. This is the PassBy[ME] Mobile ID system, that enables remote electronic signatures both for payment and non-payment transactions.

This is one of the latest news about the spread of digitalization among corporate customers, that, along with other efforts, will obviously help companies shift to digitalization, however, the story of bank digitalization dates back to 1995, at least as seen by the public. In that year, Inter-Európa Bank made account data and specific transactions (such as canceling a credit card) available at the Compuserve network, the ancestor of today’s web.

In today’s Internet banking, Inter-Európa Bank was also the first in 1998.

As we think about the milestones of the digital developments of Hungarian banks from the very beginning, it is quite surprising that according to Deloitte’s survey in 2018, Hungary is ranked as the 7th out of the 9 Central and Eastern European countries involved in the study. As the analysis shows, only Slovenian and Latvian banks have ranked below the eight biggest Hungarian banks involved in the survey in terms of digital development. While Hungarian banks got higher ranks in information collection phase, no digital development was present at the market in the last phase of customer life-time. One of the survey’s conclusion is that “On many markets banks still don’t bother with the pressure of digitalization created by customers and competitors.”

This is further confirmed by the Eurostat report saying, that while in 2017, 51% of adult Europeans used Internet banking, only 40% did in Hungary, being one of the last ones in the ranking. Ten years ago, the European average was half of this value and as for Hungary, its state in 2013 was the same as the European average in 2007.

In 2017, CIB Bank performed a representative survey yielding better results compared to Eurostat: 69% of the Hungarian clients used Internet banking and 80% was satisfied with the service. Meanwhile 77%, that is 4 million Hungarian Internet users with bank clients use some kind of mobile device (smart phones or tablets) for browsing on the web, but only a small portion of these people use these devices for banking. Although 42% of the survey participants were aware of this option, only 19% had downloaded the application and only 11% used it on a regular basis.

Obviously, three things are necessary for catching up with the rest of the world: education, education and education. Development of banks are well under way, since along with the competition, PSD2, client authentication and the challenges of fintech companies are all forcing banks to change. However, it is not worth a thing without prepared, mature and enlightened financial consumers.

In the fourth part of our article series, we introduce the Hungarian digital banking services hoping that as an effect of the upcoming development we will be able to present a more thorough comparison.

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