Hungary's K&H Bets on AI and Digital Banking

Hungary’s K&H Bank continues to drive its digital transformation forward. In light of growing customer expectations, the bank is increasing its investment in artificial intelligence and digital platforms to offer financial services that are faster, more intuitive, and more personalized.

Digitalization has now become one of the central pillars of the company’s strategy, a bank spokesperson explained. It affects nearly all areas of the business—from customer service and insurance processes to internal operations.

Banking and Insurance in One App

A key step was the closer integration of banking and insurance offerings. Customers can now manage many financial and insurance matters through a single mobile app.

Internally, the bank describes this concept as “banking and insurance in your pocket.” The goal is to simplify services and better adapt them to customers’ everyday digital lives.

The bank emphasizes that this is not about technology for technology’s sake. Rather, the digital transformation is a response to changing customer expectations: Today’s users demand fast, transparent, and seamless financial services—similar to those offered by major online platforms.

AI Assistant Takes on More and More Tasks

Artificial intelligence plays a central role in this. It is particularly evident in the digital financial assistant “Kate,” which the bank has developed over the past few years.

The AI-powered assistant now offers several hundred functions and can automatically handle numerous banking transactions. Around 150,000 active users regularly access the service.

For the current year, the bank expects around 1.7 million interactions via the assistant.

In the long term, “Kate” is set to evolve from a digital helper into a personal financial advisor who actively supports customers in their decision-making.

Digital banking is becoming the norm

The rapid expansion of digital services reflects a fundamental shift in the banking sector. Today, financial institutions no longer compete only with one another but also with the user experiences offered by major technology platforms.

Consequently, customer expectations regarding speed, personalization, and user-friendliness are correspondingly high.

According to the bank, around 80 percent of customers are now digitally active. More than 700,000 users regularly use mobile banking.

Digital channels are also becoming increasingly important in the distribution of financial products. More than half of new personal accounts are opened online, as are the majority of loan and credit card applications.

Growth Despite High Investments

Parallel to the digital transformation, the bank’s core business is also growing. The loan portfolio grew by nine percent last year, outperforming the Hungarian banking sector as a whole.

Deposit volume rose by six percent over the same period.

In the first three quarters of the year, K&H generated a net profit of 91 billion forint. Although this profit was lower than the previous year’s figure, the bank attributes this, among other things, to high IT investments and additional government levies.

Next Phase of Digital Transformation

In the coming years, the bank plans to further expand its digital systems. The focus will be particularly on fully automated processes, more personalized financial services, and the increased use of artificial intelligence.

In the long term, AI is also expected to take on more complex tasks in the background and further automate banking services.

The goal is a banking model that not only responds to requests but also identifies customer needs early on and proactively makes appropriate offers.

Sustainability Remains a Strategic Priority

In addition to digitalization, sustainability is also playing an increasingly important role in the bank’s strategy. The volume of sustainable loans has doubled to more than one billion euros within a year.

K&H is also expanding its range of sustainable investment products in asset management. The bank now manages assets totaling approximately one trillion forint in relevant funds.

Looking ahead, the bank expects that artificial intelligence, personalized services, and fully digital financial processes will significantly shape the development of the banking sector.