While Hungarians generally trust traditional banks, an increasing number of people would be keen on using financial institutions accessible only online, according to CEE research done by Big Four firm EY.
The vast majority of people (78%) in Hungary say they visit their banks in person ever less frequently. About half the population prefer to handle their finances online instead of going to the bank in person.
However, compared to the CEE average, Hungarians trust financial institutions without branches less, and would only switch to an alternative provider in case they provided products fitting their needs. In these cases, they would pick tech (35%) and e-commerce (26%) firms.
"The recently appearing global players on the financial market are elevating the competition to a higher level with their huge client base and services that are built on each other," notes Ákos Demeter, a partner at EY Hungaryʼs advisory branch.
"The life of tech firms is not burdened by complex risk management and compliance systems, hence they can provide an attractive alternative to the most profitable services of banks."
He adds, "Hungarian financial institutions must react to this challenge with innovation and developing their business processes and client management, which will require a serious advisory background."
Some two-thirds of Hungarians remain committed to their chosen banks. They mostly think that their money, as well as personal and financial data, is safe at financial institutions. Some nine out of ten respondents would therefore recommend their chosen bank to acquaintances.
"Respondents - both in Hungary and the region - are refraining from switching to alternative financial service providers, as they feel that the changing process is too complex , and they also believe that one needs a traditional bank for complex products such as a mortgage loan," Demeter explains.
In the future, however, this trend might turn around as 53% of Hungarians think that in the upcoming years, the time will come when they would not need the services of traditional banks.