The Effects of COVID-19 on the Digital Transformation of the Hungarian Banking Sector

Abstract

When choosing the topic, I tried to focus on dealing with such a current and ongoing event, we still don’t see the result, and I just find where it develops in three, five, or ten years. Digitization affects all segments and industries to varying degrees, and its impact can be widely demonstrated. Besides, the precarious economic situation resulting from the COVID-19 epidemic further complicates the situation. I found the topic relevant because I am dealing with a phenomenon, a dilemma that directly or indirectly affects everyone and can be useful to a wider audience. During the dissertation, I try to answer the following questions: How does COVID-19 affect the process of digital transformation in the Hungarian banking sector? And how does this affect the collaboration strategies of banks and FinTech companies? In my work, I rely mainly on previous publications and articles by international, prominent researchers. Also, I conducted interviews with Hungarian experts who are currently actively working for Hungarian banks. During the selection of the interviewees, I followed the concept of asking the employees of different financial institutions working at different levels for the most comprehensive picture. In terms of methodology, in addition to processing the interviews and evaluating the literature, I tried to collect and analyze surveys and public data from various commercial banks, regulatory bodies, and major consulting firms. In this article, I have collected trends that have influenced the current state of the banking sector and present the operating environment. In addition to the positive and negative factors influencing the relationship between domestic commercial banks and FinTech companies, I outline a possible scenario for a future digitization strategy for the banking sector. This exploratory research aims to examine the situation and to identify the most important variables and correlations.