Defining and comparing the level of Hungarian neobanking within Europe

Absztrakt (kivonat)

The rise of fintech has disrupted the traditional banking sector in recent years, and the emergence of neobanks is a significant part of this trend. Being the key to customer engagement, profitability, and increasing financial inclusion, digital-only banks are currently the subject of modern international economic studies. This paper aims to define the concept of the level of neobanking and assess the progress of Hungary's development by comparing it with the industry leaders, such as Germany and the Netherlands. A systematic approach to defining the degree would enable the banking industry in each country to evaluate its strengths and weaknesses, estimate the gap with more progressive nations, and explore the reasons for the differences. The research uses secondary data from the Statista portal to conduct a descriptive analysis of the digital banking market in the selected countries between 2017 and 2025. Based on the results of regression analysis, the study identifies the most significant variables and develops a formula to define the level of neobanking in a country employing Principal Components Analysis (PCA). In this study, the PCA method was applied to identify the key factors that contribute to neobanking development in the selected countries. To check the reliability of the developed formula the study employs a K-fold cross-validation technique. Using the developed formula, the observed countries are ranked, and the study compares the level of Hungarian neobanking with the Netherlands and Germany. Besides, a questionnaire with a sample size of 390 participants was chosen as the primary quantitative data collection method to provide valuable insights into customer experiences and perceptions of the observed market compared to other European countries. The questionnaire was designed to gather information on several key factors, including customer satisfaction, usage behavior, and preferences in digital banking services. The sampling method involved selecting participants from a diverse range of age groups, income levels, and geographic locations in Hungary, Germany, and the Netherlands to ensure representativeness. To evaluate the survey results, ANOVA technique and chi-square test were conducted. The research results reveal that Hungarian neobanks are at an early stage of development compared to their counterparts in the Netherlands and Germany. The paper suggests a framework for comparing the level of neobanking in different countries based on developed formula.