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How Hungary’s National Monetary Bank digitalized

Hungary's MNB Digitalizes

Hungary's MNB Digitalizes

It was a hard nut to crack, but the MNB can now be reached digitally by the market. Starting from January of last year, nearly thirty thousand applicants a year can communicate digitally since the legal deadline for the introduction of electronic administration.

In 2015 the MNB (National Monetary Bank of Hungary) introduced the plan to implement e-administration, which would begin utilization in 2018 for all bureaucratic tasks to streamline processes for market participants.

Their recent press release explains the research, processes and results to make it happen and comply:

It took years of background work and preparation for the transformation of the central bank’s internal control systems to establish the digitalization of certain case types and establishing regulations. The roots of e-administration in MNB can be traced back to 2012. At that time, the introduction of formality publication of forms on the central bank, and from 2013 onwards mandatory digitalization of the capital market issuance authorization procedures website could be considered a precursor. In these types of tasks all-around electronic administration became mandatory. In these procedures, submitting the application, communicating with the client and communicating the decision to the authority could only take place via the electronic data transmission system of the MNB.

The adoption of the e-Administration Act at the end of 2015 had forced the Hungarian public administration to act by specifying which services should be provided by institutions and under what conditions from 1 January 2018.

The 2018 trial run was challenging for both officials and customers as both parties had to learn the new system. Mass registration and diverse service structure e-signatures and identifications were just as challenging as legal mapping procedures for electronic systems or developing electronic document authentication rules.

Licencing procedures were in especially dire need of e-administration innovation, due to their frequency of request at MNB. In the money markets, the capital market treasury and insurance markets were introduced to the Hungarian National Bank’s licencing procedures last year. In 2018 more than 28,000 licencing requests and applications were received by the MNB, of which 2,000 had a resolution.

The annexes submitted in the licencing procedures are typically paper-based documents, on which more authentic electronic copies are still made. Organizations would still rather make those than use their own electronic signature to make a private document, representing conclusive evidence. A year into implementation shows MNB’s IT system at one end of the scale, and at the other, the slower adoption rate of clients, supervised institutions and co-authorities.

The MNB is currently conducting a wide-ranging survey within market participants and law firms, whose experience can help develop its IT solutions and infrastructure further to satisfy user expectations and experience.

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