Hungary’s small- and medium-sized enterprises, which are the backbone of the economy, remain far behind in digital adoption compared to the European average. According to a study by the National Association of Entrepreneurs and Employers (VOSz), a prominent business federation, Hungary’s SMEs have a 50.5% digital adoption rate, 32% lower than the EU average.
VOSz emphasized that overcoming this gap requires not only technological upgrades but also strengthening HR capabilities and fostering innovation within these companies. The business federation has, therefore, set up a customizable digital platform offering decision-support tools, and it provides personalized consultancy services to help companies keep pace with cyber developments.
One sector leading the charge in digitalization is banking. Representatives from OTP and K&H highlighted how their organizations have committed to significant IT investments, targeting both efficiency and customer experience enhancements through artificial intelligence and data-driven personalization.
K&H has integrated AI to improve customer profiling and service personalization, helping to establish more meaningful customer relationships. OTP has similarly embraced AI-driven transformations, particularly through its “OTP LAB,” dedicated to robotics and automation. However, despite this progress, the banks face regulatory hurdles that often impede digital innovation.
“The EU has two major competitive disadvantages: a fragmented market and overregulation,” András Fischer, OTP’s director of innovation, told the conference. It can backfire that the EU often regulates first. The United States and China let innovation take root, and the regulator only steps in if issues arise.
When it comes to artificial intelligence, Hungarian companies must navigate the high costs associated with AI development and regulatory compliance.
“Companies need a clear vision. They must decide first what they need a solution for, and whether AI is the right tool for that, or if alternative solutions such as pre-built software or decision trees might be more effective,” Fischer added.
Despite this measured approach, the enthusiasm for AI persists. MOL Group has integrated generative AI into its MOL Move platform, enabling hyper-personalized services that cater to over a thousand customer segments.
“You need to follow a roadmap here and go step by step,” István Mag, head of MOL’s Digital Factory, said. “It took us five years to figure out the most optimal way to sell hotdogs, for instance, relying on tonnes of data and sophisticated algorithms.” What matters the most is to act and to do so now.
“Don’t wait if you are considering doing something about digital transformation,” K&H innovation leader Balázs Németh noted. “Even if some of the pilot projects fail, which they will do, the impact of altering the organizational culture won’t be lost.”
However, digital literacy is not just about technology but also about creating a work culture where adaptability and continuous learning are paramount. Panelists argued that cultivating these digital skills and a supportive environment can empower employees to thrive as organizations increasingly shift towards skill-based hiring over traditional credential-based approaches.
Experts agreed that the most valuable employees are those who can leverage digital tools to their advantage. As AI tools become more prevalent, the need to upskill employees to use AI effectively is rising.
“It won’t be AI that replaces people, but those who use AI will replace those who don’t,” was one conclusion.
Remember the Hong Kong clerk who wired USD 25 million after a video call with his alleged superiors, during which he could also see colleagues doing office errands in the background? It turned out that he was the only human participant in the call, with the rest being deepfakes. As Zsolt Vassy of Technologies for Collaboration & Compliance (TC&C) highlighted, solutions exist to detect such forged content, and there’s an AI for that, too.
But deepfake is just one item in the rich toolkit of cybercriminals. The EU has adopted the NIS2 directive that demands organizations bolster their cybersecurity frameworks. AWS Hungary highlighted the importance of cybersecurity training, emphasizing human factors such as susceptibility to phishing attacks. This proactive approach is essential, particularly as cyber threats continue to evolve, targeting individuals across all educational and social backgrounds. Fraud damage grew by four-fold year-on-year from 2022 to 2023 globally. As Csaba Vári, a lawyer at Baker & McKenzie, said, everything has become risk-based.
“Companies will be forced to take cybersecurity seriously by the market, not eventual fines,” he noted. Part of this self-defense strategy also involves understanding the psychology of fraud. Criminals use sophisticated methods that exploit cognitive factors. This is where preparation comes into the picture.
“Banks used to emphasize technology; now, they focus on raising awareness among colleagues,” István Ragó, chief security officer at Raiffeisen Bank Hungary, pointed out. The more clients one has, the greater the exposure, though, as organizations need to let them use their own systems. In this regard, the government faces the toughest challenge, having to cover all kinds of social groups. On the other hand, it is an illusion that only vulnerable groups are at risk.
“People with high social status and strong digital literacy get easily overconfident, which often leads to successful fraud attempts,” Turul Balogh, group information security officer at Tresorit, said.
This article was first published in the Budapest Business Journal print issue of November 29, 2024.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
