HUNGARY Law and Practice Contributed by: Pál Rahóty, Lakatos, Köves & Partners
1. Fintech Market 1.1 Evolution of the Fintech Market
gies not only increases the efficiency of operational processes, but also offers a competitive advantage to pioneering companies. The change is also noticeable in business models: neobanks are increasingly gener - ating profits, and a large part of the sector continues to be characterised by growth with losses. In Hungary, financial institutions are undergoing comprehensive digital modernisation, in line with international trends.
In Hungary, the fintech market has been consolidat - ing over the past year: according to a report prepared by the regulator, the November 2025 FinTech and Digitalisation Report of the Hungarian National Bank ( Magyar Nemzeti Bank – MNB), or “the MNB Report’, the number of new start-ups has decreased in the past two years, and several players have exited the market. Thus, the overall number of active domestic fintech companies has slightly decreased (to around 210). This suggests that after the previous ”start-up boom”, the emphasis is increasingly on sustainable operations, order and revenue generation capacity, and co-operation with larger players. Financial soft - ware development and system integration, data analy - sis, and payment services are the main areas where domestic fintechs operate, which shows that many Hungarian fintechs operate principally as partners/ suppliers of traditional financial players. One of the characteristics of the Hungarian market is that due to the domestic size limit, foreign markets play a major role in growth: according to the MNB Report, 44% of the total sales revenue of the micro- SME fintech circle in the previous year came from exports, and nearly 30% of domestic fintech com - panies export. In addition, digitalisation has contin - ued to strengthen on the banking side: according to a survey done by the MNB, the digital development of the domestic banking system further improved last year, while the use of artificial intelligence (AI) is also increasing. Over the last 12 months, the digital transformation of the global financial sector was primarily driven by AI and fintech innovations. The MNB Report con - cludes that, globally, a structural reorganisation of the fintech ecosystem can be observed: the num - ber of market participants has increased further on a global level and slightly decreased on a domestic level, while the volume of investments has fallen to a seven-and-a-half-year low. This process is the result of the high-interest-rate environment and the more cautious behaviour of investors. The strategic impor - tance of digitalisation is demonstrated by the fact that the increasingly deeper embedding of AI technolo -
2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models
Nearly two-thirds of the companies in the domestic fintech sector operate in three service areas (financial software development and system integration, data analysis and payment solutions), and these are prov - ing to be enduringly popular according to the MNB Report. For years, these service areas have covered the majority of the companies in the sector. The pro - portion of companies in the financial software devel - opment segment has expanded significantly, indicat - ing that serving the development needs of domestic financial enterprises is of paramount business impor - tance for the domestic fintech sector. Among micro and small enterprises in the sector, the share of the investment/financing and insurance segments has increased slightly, but the service area related to finan - cial software development is still the most popular; this shows that domestic fintech companies often operate as partners and suppliers of the traditional financial sector. Micro and small enterprises also include the full range of companies dealing with blockchain and virtual currencies. In the case of medium-sized fintech companies, on the other hand, service areas related to cybersecurity and payment solutions are overrep - resented. As regards operating models, the scene is character - ised by a symbiotic relationship where new players (start-ups) predominantly focus on B2B services, while legacy players (incumbent banks) focus on digitalising the customer experience through collaboration. The Hungarian market appears to be moving away from “neobank v traditional bank” competition towards a model where traditional banks adopt white-label fin -
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