Banking as a Service (BaaS) in Hungary: A Guide to Regulatory Requirements

Introduction

Hungary has become an attractive market for fintech companies looking to provide Banking as a Service (BaaS). However, navigating the regulatory landscape can be complex. This guide provides key insights into the requirements and guidelines set by the Hungarian National Bank (NBH) to help you understand what’s needed to start offering BaaS in Hungary.

Registration of Financial Agents

To provide BaaS in Hungary, a non-banking entity must register with the NBH as either a tied agent or independent intermediary. This registration process involves meeting specific regulatory requirements, which differ depending on whether you choose to be a tied agent or independent intermediary.

Key Considerations for Registration:

Tied Agents: Less demanding regulatory requirements
Independent Intermediaries: Stricter regulatory requirements

Regulatory Requirements and Outsourcing Arrangements

In addition to registration, financial agents must meet certain regulatory requirements outlined by the European Banking Authority (EBA). Depending on the scope of services provided and actual arrangements, outsourcing requirements may apply as outlined by the EBA’s Guidelines on outsourcing arrangements.

Key Considerations for Regulatory Requirements:

Outsourcing: May be subject to specific regulations depending on the scope of services and arrangements
Restrictions on Foreign Passported Financial Institutions: Specific requirements regarding outsourcing may affect foreign passported financial institutions

Regulatory Sandbox/Hub

The NBH has established a regulatory test environment for innovative fintech firms. This platform allows companies to consult with the regulator and test their products in a controlled environment.

Key Benefits of the Regulatory Sandbox:

Consultation: Opportunity to discuss your product or service with the regulator
Regulatory Test Environment: Test your product or service in a controlled environment

Seeking Advice

Before proceeding with BaaS implementation, it is recommended to seek advice from legal advisors or the regulator itself. This ensures that you comply with all applicable laws and regulations.

Key Contacts:

[Kinstellar](insert contact information): Law firm providing assistance with understanding national and EU regulations affecting fintech businesses