The word of the year will be competitiveness, which will also be a key topic during Hungary’s EU presidency. In global market competition, Europe is not leading but falling behind the United States and the Asia-Pacific region, warned Péter Törcsi, Chairman of the Board of the Oeconomus Economic Research Foundation, during the “Digital Hungary” event organized as part of the think.BDPST series. He identified the lack of European leaders offering an acceptable solution for the whole continent as the main reason for this. “Europe has become complacent. Everything is viewed as a threat. Regulation has become more important than increasing efficiency!” he pointed out, citing the relationship with artificial intelligence as an example.
At the same time, he emphasized that Hungary is a leader in digitalization. “Hungary joined the digital revolution at the right time, which could provide an advantage in terms of competitiveness”, he explained.
Milestone in the Digital Citizenship Program
“Like it or not, digitalization is already part of our lives. It’s like the Industrial Revolution once was. The important thing is that we make the most out of new technologies!” – this was the parallel drawn in the opening speech by Balázs Hidvéghi, Deputy Head of the Prime Minister’s Office. He emphasized that the new Digital Citizenship Program (DÁP) marks a milestone and opens a new era. According to Hidvéghi, more than 176,000 people have already downloaded the app.
The advantage of the mobile app is that it allows users to manage their affairs without being tied to a specific location, something that is not just obvious to young people but now an expectation.
And this is just the tip of the iceberg. Hidvéghi explained that over time, the DÁP will continuously expand with new features, such as:
- Booking appointments at government offices,
- E-mail services,
- E-signatures,
- Electronic utility bills,
- Storing warranty certificates for purchased products.
“There’s no need to keep our documents in our wallet anymore; everything from fishing permits to boating licenses will be available in the app,” he listed as other potential uses.
Voluntary and Secure
The Deputy Head of the Prime Minister’s Office quickly pointed out two things. First, while the app is available to all Hungarian citizens aged 11 and above, its use is entirely voluntary. Therefore, computer-based and in-person administration will still be available.
Second, the system was developed with the strictest security measures to prevent cyberattacks. “The app does not ask for new data from citizens; it only collects them in one place. And they are stored exclusively on the device and cannot be shared with anyone,” he explained the data protection regulations.
Finally, Hidvéghi highlighted that the DÁP could also accelerate and enhance the operations and efficiency of businesses. He reminded everyone that digitalization already contributes 18% to the gross value added (GVA).
Panel I: The Digitalization of Politics
The first panel discussion of the conference, which focused on the digitalization of politics, was moderated by Nikoletta Szigethy-Ambrus, an analyst at Oeconomus. The discussion included Orsolya Szabó, Head of InvestCEE, Kristóf Szép, expert and advisor at Idomsoft Zrt., and Viktor Lázár, Research Project Leader at the MCC Technological Futures Workshop.
Still Room for Improvement
Orsolya Szabó pointed out that Estonia is considered a global pioneer in political digitalization, and among European countries, Malta is also among the leaders.
In addition, Viktor Lázár highlighted Singapore and South Korea and noted that Hungary ranks 49th in the UN’s public sector digitalization ranking. According to this, 48 countries are ahead of Hungary, showing that digitalization is indeed the right direction.
The MCC researcher pointed out that digitalization does not undermine but strengthens democracy and competitiveness. The experts highlighted that in Estonia’s example, under the e-residency program, all administrative activities, except for divorce, can be done online, and foreign nationals can establish businesses in the country without entering its territory. This significantly improves the Baltic nation’s capital attractiveness, which is one of the most important factors of competitiveness.
Could Electronic Voting Be Next?
In response to the moderator’s question, Orsolya Szabó outlined four conditions for political and administrative digitalization:
- Government commitment,
- Transparency,
- Voter trust in the state,
- The population’s basic digital competencies.
According to Szabó, changes in the legal framework are needed for online elections, and full transparency and verifiability of the voting process are necessary to ensure legitimate voting.
Kristóf Szép also pointed out that a digital state cannot be built from scratch; certain prerequisites are necessary. He explained that due to general opposition, many trust-building steps must be taken before introducing digital voting. Therefore, online voting will not be feasible in 2026.
He emphasized that paper-based voting will not disappear, as there will always be a segment of the population who, due to distrust or specific life circumstances, will not want or be able to use digital voting options.
Viktor Lázár pointed out that Estonia began online data verification between government agencies in 2001, and the introduction of electronic voting took place in 2015, meaning that the digitalization process in the state was gradual. In Estonia, while only 1-2% of voters used digital voting nine years ago, this number increased to 51% in the 2023 election. According to the MCC researcher, a significant trust-building step would be if the National Consultation and similar feedback tools could also be filled out online.
The Risks
The moderator’s next question focused on security risks. Kristóf Szép emphasized the importance of finding a balance between manageability and appropriate security. He pointed out that during the development of the Digital Citizen application, they collaborated with ethical hackers and adhered to all international security standards, such as multi-factor authentication.
Viktor Lázár highlighted that 95% of frauds and data leaks do not occur through vulnerabilities in mobile apps but rather due to user error, and that education can help address this.
The experts noted that blockchain technology might offer a solution to current security risks.
At the end of the discussion, Szép Kristóf presented the plan to gradually simplify the registration process to promote the Digital Citizenship program. Starting from the beginning of next year, people will be able to register online for the related mobile application. He also mentioned that in the future, digital administration of all life events, such as enrolling children in school or purchasing vehicles and properties, will be possible under the Digital Citizenship Program, with the exception of marriage and divorce.
Orsolya Szabó emphasized that the promotion of the program would be facilitated if they also opened up to the private sector. According to the head of InvestCEE, this would allow citizens to check what personal data companies have access to, and it would also ease information gathering for the companies.
Panel II: The Digitalization of Services
The second panel, titled The Digitalization of Services, was moderated by István Loránt Szakáli, Strategic Director of the Oeconomus Economic Research Foundation. The panel included Ágoston Hortobágyi (CEO, DataIT), Zoltán Nagy (Security Director, Telekom), Róbert Lancz (Owner-CEO, Doktor24), Zoltán Ács (CEO, Fintechlab), Attila Menyhárd (Lecturer, Department of Civil Law, ELTE, and Head of the Modern Legal Studies Workshop, MCC), and Dr. Magdolna Kádár (Head of Department, Health Development and Sectoral IT Department, Ministry of the Interior).
When defining the nature of digitalization, all participants highlighted that the process is fundamentally new and requires a complete change in mindset. Establishing the mindset necessary for digitalization in society is still an ongoing task. Róbert Lancz cited examples of new situations created by digitalization, such as the transformation of the traditionally two-part relationship between doctor and patient in healthcare. Attila Menyhárd pointed out that, in the justice system, it is expected that in a few years, artificial intelligence will be able to perform the work of a law clerk – even if not flawlessly.
However, it is important to keep in mind that digitalization does not have intrinsic value; rather, it is a tool that allows us to complete many tasks more easily and cheaply, as stated by Zoltán Ács.
The Legal Environment and Digitalization in Hungary
The legal environment in Hungary is ready for digitalization, but local small and medium-sized enterprises (SMEs) are still somewhat resistant to it. It was pointed out, however, that this is not only a Hungarian issue, as businesses in Western Europe also often hesitate due to a general reluctance to change.
It is true that the entry costs for digitalization can be high, and, much like the costs associated with providing digital services, it can take a long time to see a return on investment. However, digitalization is unavoidable for SMEs: if they don’t adapt, they will be overtaken by competitors, as Zoltán Ács emphasized.
As many of the panel participants were active in the healthcare sector, the fragmentation of Hungarian healthcare IT systems was discussed as an obstacle to the sector’s digitalization. It was also noted that the IT systems in public and private healthcare are divided. Dr. Magdolna Kádár highlighted, however, that the Hungarian Electronic Health Service System (EESZT) is a model for several European Union member states.
Regarding the judiciary, private lawyers are somewhat open to digitalization, but some institutional systems remain conservative in this regard. The financial sector was also discussed, and according to Zoltán Ács, new regulations related to digitalization can be expected in the near future. Zoltán Nagy stressed that building citizens’ trust in the digital world is crucial, as well as protecting citizens from abuses.
Panel III: The Fintech Sector
The third panel of the conference addressed current issues regarding digitalization in Hungary and the fintech sector, with a particular focus on the impact of artificial intelligence (AI) and regulatory challenges. The panel discussion, moderated by Anton Bendarzsevszkij, Director of the Oeconomus Economic Research Foundation, began with a keynote speech by Szabolcs Szolnoki, Deputy State Secretary for Technology. He emphasized the EU AI regulation, which will regulate the field, as well as the Blockchain Coalition’s strategy. The coalition is now focused not only on cryptocurrencies but also on broader blockchain solutions, such as those in agriculture and clinical research.
During the panel, Anikó Szombati, Executive Director responsible for digitalization and fintech sector development at the Hungarian National Bank, pointed out that artificial intelligence is becoming increasingly important for the financial sector. AI-based systems have proven useful, for example, in fraud prevention and data processing. However, Szombati also warned that technological advancements have increased the sophistication of cybercrime, making it crucial for banks to develop protective mechanisms.
György Mudri, co-founder and CEO of FintechX Technologies, reflected on the opportunities in fintech, noting that AI provides added value in almost every area of customer service. Mudri argued that fintech generally supports, rather than threatens, traditional financial institutions. For example, traditional banks can adopt Big Data solutions.
Selmeczi-Kovács Zsolt, the CEO of Giro Zrt., highlighted the introduction of the Qvik payment method in September this year, which allows for both QR code and deeplink-based payments in Hungary. This offers a new alternative to traditional bank card and cash payments, based on real-time inter-bank transactions. Next year, GIRO plans to introduce a central fraud detection system capable of filtering financial fraud in real time.
Economist Zoltán Pogátsa suggested that fintech solutions could, in the long term, potentially replace the traditional banking system. Fintech companies can provide essential banking services, such as lending, deposit collection, or securities trading, and do so more efficiently than traditional banks. He cited China’s Alipay and WeChat systems as examples, which use big data-based lending algorithms that have proven to have lower error rates than human lenders.
Anikó Szombati presented the domestic fintech market: over the past six years, the number of fintech companies has doubled, and more than 212 companies are currently operating in Hungary. These companies had a combined revenue exceeding 310 billion HUF in 2022, and employ around 9,000 workers. Szombati emphasized that Hungary’s strength in the fintech sector lies in its technological expertise, but there is also a significant need to develop business skills and confidence to succeed in international markets.
The international competitiveness of the Hungarian fintech sector was also discussed. Szombati and Mudri agreed that although Hungarian fintech companies such as SEON, Barion, and Finshape can succeed internationally, they face challenges due to varying regulatory environments. Szombati pointed out that while Hungary does not pursue a cashless society as a goal, the advantages of digitalization are increasingly being utilized, especially with the growing popularity of bank card and instant payment system transactions. She also mentioned the first steps toward introducing Central Bank Digital Currency (CBDC) in Hungary.
Selmeczi-Kovács Zsolt added that the growing adoption of the instant payment system offers a national alternative to bank card transactions. In the closing thoughts of the panel, Mudri György emphasized the future of super apps. According to Mudri, users are looking for platforms where they can access various services to manage their lives in one place, including financial services.
Pogátsa predicted that such fintech solutions will gradually replace the banking sector, with banking functions becoming integrated into digital services. The final message of the panel was that Hungary’s digital infrastructure, regulatory flexibility, and encouragement of business innovation are crucial to ensuring the fintech sector remains competitive internationally and that the domestic financial system can adapt flexibly to new challenges.
