As featured in Portfolio.hu
A Luxembourg licensed bank is the quiet engine powering the global movement of money for over 850 fintechs. Now they are looking to expand in Hungary.
According to representatives of Banking Circle, international money transfers in the B2B sector do not have to be a slow process.
Banking Circle believes that the next era of financial infrastructure is defined by instant, globally accessible, and continuously operating money movements. The company does not position itself as a traditional bank, but rather as a technology-driven, unified API-based infrastructure provider. The essence of this model, compared to traditional banking systems, is a single, scalable platform architecture that can connect new markets, currencies, and services through one integration, significantly accelerating international payments and reducing costs. Portfolio talked to Banking Circle President Mikkel Gronlykke, Chief Operating Officer Morten Juhl Lilleøre and Tamás Ágoston, the company’s local representative about the solution, which will soon be available in Hungary.
Banking Circle positions itself more as a next-generation financial infrastructure provider rather than a traditional bank. How would you define this difference in practical terms?
Mikkel Gronlykke: I would describe Banking Circle as a technology-driven, agile financial infrastructure built on the needs of the modern financial ecosystem, and essentially competing with traditional banking players.
I believe the future of financial and payment infrastructure is based on instant, globally available, 24/7 money movement. Within this ecosystem, Banking Circle plays a back-end infrastructure role: end users do not necessarily interact directly with the brand, but we provide the technological and payment infrastructure on which many fintech services rely today.
I joined the company ten months ago; before that I spent over two decades working in senior leadership roles in the international traditional banking system, and over a decade focusing on the CEE region – so I had a clear view of the position of traditional banks and the competitive advantages of new financial service providers. Since joining Banking Circle, and based on direct feedback from clients, it has become clear to me that a technology-driven, global operating model represents the future of financial services.
Why do you believe that the current European banking infrastructure is no longer sufficient to meet the needs of today’s cross-border commercial and payment environment? Where are the biggest structural shortcomings?
Morten Juhl Lilleøre: As Mikkel said, financial services and payment infrastructure need to operate as fast and seamlessly as data flows, just like it does on a mobile phone.
Ask yourself: when was the last time you experienced a truly efficient and customer-centric interaction with a traditional bank?
We believe payment services and banking infrastructure are increasingly becoming standardized, basic services, and accordingly solutions must be easily accessible, reliable, and real-time, because customer demand is clearly shifting toward instant payments.
Mikkel Gronlykke: It is important to note that the core infrastructure of traditional financial institutions is largely still based on legacy systems developed in the 1960s and 1970s, particularly mainframe technologies.
These systems still generate significant revenue for large international banks, which makes them extremely difficult to remove or fully replace. Their modernization is also limited, so most institutions continue to maintain and gradually operate these platforms for as long as it is economically justified.
At the same time, fintech players have entered the market, and customers are increasingly aware of the difference between traditional and next-generation services. However, for large banks, fully replacing existing infrastructure would be complex; they would essentially need to build an entirely new system while maintaining current operations, which typically involves significant regulatory, operational, and strategic challenges.
The real difference today lies in technological background, operational speed, flexibility, and organizational mindset. In a technology-oriented organization of around 800 people such as Banking Circle, rapid decision-making and development are possible. This level of operational agility may be more challenging to achieve within certain traditional banking structures.
The points you mention are particularly interesting, because when it comes to communication, legacy banks centralise themes like innovation and digitalization, with a lot of emphasis on mobile apps, chatbots, and other digital solutions. How can one resolve this contradiction?
Morten Juhl Lilleøre: Many market players do indeed build modern user interfaces and digital services on top of existing systems, but this does not change the fact that the underlying infrastructure is still based on 1970s-era architecture.
Such developments may improve customer experience in the short term, but the structural limitations of the back-end systems will ultimately hinder innovation, scaling, and adaptation to new consumer needs in the long run.
Much is said about “modern banking infrastructure”—beyond APIs, what actually defines this model?
Mikkel Gronlykke: Instant or near-instant payments are a key area, and although some elements already exist within Europe, the pace of development is still slower than expected.
The biggest challenge is currently visible in global, cross-border transactions. Today, sending money to the other side of the world is still often slow, expensive, and not very transparent. If these transactions were executed in real time, it would create a significant competitive advantage for market players. It would also remove considerable costs from the system, as customers would clearly see how much arrives, when it arrives, and under what fee structure.
The paradigm shift has already begun, as modern financial infrastructure providers are already technologically capable of this—highly scalable, fast, and cost-efficient—creating a new industry standard.
Morten Juhl Lilleøre: To add to this point, our goal is to make payments both domestically and internationally transfers happen within a few seconds, with full transparency and significantly lower costs.
How can this be achieved with Banking Circle’s services, how does your system differ from traditional banks?
Morten Juhl Lilleøre: Ten years ago, when we started building the company, one of our key strategic decisions was to adopt a unified platform architecture rather than fragmented infrastructure by country or business line.
This is both a challenge and a competitive advantage. It is a challenge because building such a system is more time-consuming and complex. However, in the long term it provides a major advantage, enabling much faster and more efficient scaling.
In traditional banks, it is common for different country units of the same organization to operate almost as separate entities from a technological and operational perspective, using different systems, processes, and technology stacks. In contrast, we aim for all markets and services to be built on a single unified infrastructure: one platform, one API architecture, where integrating a new country or service is essentially just “switching on” new functionality.
That is why we are particularly excited about the arrival of our colleague Tamás Ágoston and the development of our presence in Hungary.
Let’s turn to the Hungarian market: there is a common belief that Hungary is not as advanced in digitalization as Western Europe. Given this, how strong is the customer demand for your services?
Tamás Ágoston: The Hungarian fintech ecosystem is highly motivated and developing dynamically. Although there are fewer fintech companies in the region overall, those that reach a certain level of maturity are already fully competitive in quality and capability with Western European players.
In addition, traditional financial institutions are also increasingly open to innovation, and there are clear signs that banks are willing to adopt quickly integrable, standardized—essentially “off-the-shelf”—infrastructure solutions such as ours.
In every market entry, regulatory trust and operational stability are fundamental requirements. In Hungary, we are actively engaging with regulatory authorities as we are preparing for launch.
What is your expected timeline and what are your mid-term plans in Hungary?
Tamás Ágoston: Over the next year, we will look to bring Hungarian forint capabilities onto our global platform, while expanding our support for Hungarian banks and fintechs – enabling them to access our global platform.
We also intend to actively cooperate with key local ecosystem players, including the Hungarian Fintech Association, the Hungarian Banking Association, and various professional and industry forums.
Our goal is essentially to connect Hungary more closely to the global financial ecosystem while making international financial infrastructure services accessible within the Hungarian forint-based environment as well. All of this through a unified API-based infrastructure, with fast, efficient, and agile operations.
The publication of the article was supported by Banking Circle.
