No improvement without digitalization - Part One
2018.08.03. 08:00 | Hírek
This is the first part of the article. Next part
There are many publications nowadays about the need to change to digitalization. But how does it change financial administration and how prepared are the Hungarian banks and society for such changes? We investigated this question with Bancard Ltd. experts.
Digitalization not only challenges finances but the whole economy as well. As digitalization slowly permeated our private lives it avoided Hungarian companies, more specifically small and medium-sized enterprises (SMEs). As a response and to upgrade these local businesses the government launched the Modern Enterprises Programme.
There is, however, another effect that urges automation, namely the shortage of labor and professionals which has been an issue for 2 years now. To solve these problems, companies need to develop. Fortunately, there is a general increase in investments: 3 out of 4 companies and 9 out of 10 medium enterprises are planning to develop. (source)
Since digitalization has long been present in our private lives through Facebook and smart phones, it is natural that clients, especially the younger generation, have the same expectations in finances as what tech giants and fintech companies offer.
These effects altogether initiate digitalization in the Hungarian finance sector as well.
Even if we are lagged in digitalization, especially SMEs, we can compare our position with other countries. For this we can turn to The Digital Economy and Society Index (DESI) of the European Commission. DESI uses several indices as a proxy of the status of digital economy. Based on that we are not at the very last position and we are improving every year.
Digitalization is not for its own sake. As it had filtered into our lives as a result of the above-mentioned effects, it changed the attitude as well: client experience became the key question. It used to be less important before when safety and robustness was the first. Today, however, the key question in development is what kind of experience the client should get? It often seems that this is the one and only driving force in development, but actually client experience is only the end result. There is complicated work in the background such as data collection and optimization, that produce real efficiency.
Before we move on to the state of Hungarian banks in this regard, we continue our series of articles with the effects of digitalization on macroeconomy.