Budapest Fintech Week: Key takeaways and the Future of AI in Finance

The WOW experience began as soon as I entered CREATE26 , the venue for this year's Budapest Fintech Week. The atmosphere immediately drew me in—this location, once a 19th-century apartment building with a courtyard, has been transformed into a coworking space, event venue, and restaurant all in one. I wasn’t the only one impressed; many attendees were actively taking photos of different parts of the building.

Several Hungarian startups and software development companies have offices here, which brought back sentimental memories of the time when Tappointment operated in a similar setting—although we’ve since outgrown those spaces and that era.

Special praise goes to the designer of the event’s logo, which cleverly references Budapest's coat of arms while also incorporating mathematical symbols.

The event brought together representatives from various stakeholders in the fintech sector. Speakers included financial experts, startup founders, representatives from financial and insurance companies, regulators, and IT professionals. Among the invited guests were Turkish fintech companies at different stages of maturity, providing insights into the startup scene beyond Hungary and Europe.

The speakers highlighted several challenges in the fintech sector, such as the outdated legacy software used by traditional financial institutions (unlike wine, aging is not favorable for software), the over-regulation within the European Union, the country-specific legal requirements and different market conditions across member states that hinder innovation, and specific issues in the Hungarian market (an uncreative insurance sector, lack of capital, and low financial literacy).

A common viewpoint was that AI will not replace human jobs but will favor those who know how to leverage it. AI is anticipated to play a crucial part in shaping the future business processes. These messages were particularly reassuring to me, as at Tappointment, we’ve been integrating AI capabilities into our software development processes, client solutions, and our own product for the past two years.

Check our co-worker’s blogpost here, where we dive into our journey of integrating #AI in our #Jira extension to make retrospectives more efficient, and how it can transform agile workflows and improve team productivity.

Another key insight regarding AI was its utility in cybersecurity, where it serves as an excellent tool but not the ultimate solution—human expertise will still be necessary (and we shouldn’t believe every sales pitch).

We also received updates on global fintech funding and M&A trends. Financial data for 2023 clearly indicates a significant decline in funding, but business advisors are beginning to observe early signs of recovery in this market, even though we’re far from pre-2023 levels. Unfortunately, this isn’t great news for those considering launching a startup.

One fintech startup project presented a hybrid solution combining AI and no-code tools. I remain sceptical about such approaches, as the now-classic adage goes, “no code is someone else’s code.” In our experience with several startup clients, those without their own developer resources and code ownership faced risks during the second round of funding, as investors viewed this as a liability. The key takeaway for startup founders is to plan for growth early. Even if a project doesn’t start with in-house developers, it’s important to anticipate the need for a dedicated development team as the business matures (and never promote yourself by saying the code isn’t yours).

There was a dedicated session on financial literacy among youth and the role of #AI in B2C banking. According to a survey by PEAK young people in North America and Western Europe now predominantly use neobank apps for daily financial management and investments rather than traditional banks. AI-powered neobanking apps offer tremendous potential for improving financial literacy among young people.

Overall, this was an excellent initiative, providing a platform for exchanging ideas with many international participants about the challenges and joys of startup life. Hopefully, next year, we’ll get to meet you there too!

Check MKB’s FintechLab: https://fintech.hu/tag/mkb-fintechlab/

Author: Attila Wesselényi | CFO @Tappointment