Can Klarna change the game of Open Banking?
Is Open Banking (OB) really useful?
For Klarna, Open Banking is an exciting journey that started in 2004 with SOFORT Payments (a Klarna company) and entered hyper-drive in 2018 with PSD2. It gave us a chance to consolidate and democratize financial services – and it gives users the power to determine what happens to their data. In this regard, OB is not only useful but fundamentally necessary. It provides a single standard, enables scalability and guarantees the quality of the interactions and management of the consents necessary for banks to allow third parties to access their data networks.
What Open Banking-based solutions do you see that stand out?
OB has had the biggest impact on payments, creating incremental changes in multi-bank and cross-border payments, faster onboarding, and more intuitive financial status reporting. But in truth, much of the true value of Open Banking has yet to be realized. There is a real opportunity to go beyond banking, enabling all kinds of dynamic companies to bring new products to market based on customer insights embedded in financial data. One of the most exciting insights is providing actionable insights into sustainable finance and financial health. Getting a holistic understanding of the consumer from Open Banking’s real-time data feed allows us to show them where they stand, whether they can afford a purchase or not, and what practical steps they can take to improve their situation. It’s more than how much they spend and where. He tells them what would happen if they changed their habits, preferences, or sources. It is an extremely compelling value creator for the consumer.
Can you provide details and updates on your OB offering?
Our OB solution provides third-party providers with simplified access to consumer bank account data through Account Information (AIS) and Payment Initiation (PIS) services in accordance with PSD2. Our OB technology is now represented by the new Klarna Kosma brand and has been developed on a large scale in all markets for more than 15 years. It is among the most established and proven in the world and offers one of the best PIS conversion rates available.
We operate the largest OB network reaching 16 countries and 99% of banks. We are also one of our biggest customers. Our technology powers Klarna’s BNPL products – using our bank, app and subscription. This makes us the only payment provider to have a proven solution that is “extremely resilient” in terms of connection levels, volume and scale of customers.
You mentioned Klarna Kosma – what is it?
We’ve been working on revamping our OB product offering and creating more personalized partner solutions to help drive more innovation around OB. To show that we are serious about this, we have created a branded business unit called Klarna Kosma.
In the spirit of Open Banking, Klarna Kosma puts Klarna’s Open Banking Platform at the fingertips of innovators – giving them the experience, knowledge and scale to drive results and bring their ideas to life. more ambitious. Using our unique Open Banking API, they can connect to over 15,000 banks worldwide, without worrying about infrastructure or data sources. You don’t have to be a bank or a fintech. Any business that needs seamless access to financial data can use our Open Banking platform with products such as account information, SOFORT, wire transfers, and underwriting decision making.
How has OB influenced the financial industry and what impact will Klarna Kosma have?
OB moved responsibility for innovation outside of the banks. It created more opportunities for better services for consumers and helped make financial products faster and easier to access. Across banking and related industries like insurtech, we see OB providing the ability to consolidate and report on financial status and transactions. But to take the next step, we need to think even further. The real value lies in insight, foresight and prediction. It’s about giving consumers tools that will positively benefit their everyday lives, whether that’s helping them make better budget decisions, set and manage goals, or accelerate their ambitions.
Banks are unlikely to do so. Their focus was much less nuanced by the client and more about migrating legacy to the cloud and using PSD2 to grow ecosystems and avoid disintermediation. Instead, it’s more likely to come from fintechs, lifestyle and tech partners — perhaps even “trusted” merchants.
At Klarna Kosma, we’re committed to helping all parties do it faster and with less investment, so they can start building ultra-customer-centric use cases now. We powerfully bring game-changing OB ideas to life by leveraging our disruptive DNA and shaking things up in an industry that hasn’t changed in too long.
What new banking business models have you noticed and how can Klarna Kosma help monetize them?
We see a lot of potential outside of the more traditional target audience (banks and fintechs). Large merchants and financial management software vendors are beginning to use OB to better serve their customers. Klarna Kosma can help these industries bring complete product offerings to market much earlier and at lower cost based on the building blocks we provide.
For example, our “Account Insights” turns simple bank statements into unique insights through categorization and data enrichment. This information can enable a variety of use cases, including personalized budget plans, insurance checks, loan applications, credit and risk assessments, personal finance management apps, and more. all through a single API integration. But monetizing services takes more technology, it also takes skills and passion. With Klarna Kosma, businesses can also work with great people, our business insights, usage data and our ability to inspire.
People often wonder “what Klarna will do next”. What’s planned for 2022?
We will drive innovation by stimulating and helping our partners deliver these next-generation use cases that solve real problems and empower customers. It means moving the focus beyond banking and beyond payments, so we can connect financial data faster, further, and in more ways than ever thought possible.
We’d love to hear from forward-thinking innovators, start-ups and brands who are excited to connect with us. Just imagine the solutions they can create with Klarna Kosma and access the same platform, connections and passion as Europe’s biggest fintech.
About Wilko Klaassen
With over 15 years of experience in decision-making roles at several well-known global brands and a deep understanding of global markets, Wilko is Vice President Open Banking at Klarna. Three years after joining the $46 billion unicorn, Wilko was responsible for expansion in France, Belgium and the Netherlands. Its ambition is to build global financial relationships through Klarna Kosma and position it as a leader in innovation and future generations of financial services.
About Klarna Kosma
Klarna Kosma makes breakthrough ideas powerfully real. Launched in 2022, Klarna Kosma is Klarna’s financial technology platform for banks, fintechs and innovative merchants, who develop payment services or need access to financial data to create their own solutions for the benefit of the ‘final user. Our proven and mature platform provides essential connectivity to a growing network of over 15,000 banks in 24 countries through a single Open Banking API. We process over 200 million transactions per year and are the most extensive Open Banking platform in the world. For more information, visit www.kosma.com.