Financial Crime World

Hungary’s Banking Industry Faces Compliance Challenges in Post-Pandemic Era

Introduction

The banking industry in Hungary is facing significant challenges as it navigates the post-pandemic era. Financial institutions must contend with a complex web of regulations and recommendations that demand attention to detail.

Cloud Transformation: A Key Area of Focus

Cloud transformation poses both IT and technology risks, as well as compliance risks for financial institutions in Hungary. To help banks meet regulatory requirements, experts are offering:

  • Gap assessments: Identifying areas where financial institutions may be non-compliant with regulations
  • Cloud risk analysis: Evaluating the potential risks associated with cloud-based systems
  • Exit plans: Developing strategies to ensure a smooth transition from legacy systems

Information Security Risk Assessment: A Critical Concern

The Hungarian banking industry must also prioritize information security risk assessment. Government decree 42/2015 mandates that financial institutions conduct an information security risk assessment at least every two years.

To support this process, experts are using:

  • Proprietary IT risk assessment tools: Providing practical recommendations to reduce information security risks
  • Independent risk assessments: Evaluating the effectiveness of current security measures and identifying areas for improvement

Physical and Human Security Risk Assessments

The Hungarian National Bank (MNB) requires regular evaluations and adequate countermeasures for physical and human security risk assessments. Independent risk assessments can be performed by experts who have tested work programs in place.

Remote Client Identification Processes: New Requirements

Recent MNB regulation 26/2020 has introduced new requirements for remote client identification processes and systems. These must now be validated by an independent party at least every two years, a process that can be complex and time-consuming.

Experts with experience in the Hungarian market can perform reviews effectively, ensuring compliance with regulatory demands.

System Integrity Reviews: Maintaining a Secure Environment

Government decree 42/2015 also mandates system integrity reviews to ensure a secure and compliant banking environment. The Bszt legislation (2007. CXXXVIII.) underscores the importance of these reviews in maintaining a secure and compliant banking environment.

Conclusion

As Hungary’s banking industry continues to evolve, compliance with regulatory requirements will remain a top priority. By working with experts who can provide gap assessments, risk analysis, and independent risk evaluations, financial institutions can ensure they are meeting their obligations and avoiding potential pitfalls.