Can Klarna be Open Banking's game-changer?

Is Open Banking (OB) actually helpful?  

For Klarna, Open Banking is an exciting journey that began in 2004 with SOFORT (a Klarna company) payments and went into hyper-drive in 2018 with PSD2. It has given us a chance to re-bundle and democratise financial services – and it grants users the power to determine what happens to their data. In this respect, OB is not just helpful but fundamentally necessary. It provides a single standard, allows scalability, and ensures the quality of interactions and consent management required for banks to let third parties access their data networks.  

What Open Banking-enabled solutions do you see that stand out?

OB has had the biggest impact on payments, creating step changes in multi-banking, cross border payments, faster onboarding, and more intuitive financial status reporting. But in truth, much of Open Banking’s true value is yet to be realised. There’s a real opportunity to reach beyond banking, allowing all sorts of dynamic businesses to bring new products to market based on the customer insight embedded in financial data. One of the most exciting prospects is providing actionable information about sustainable financing and financial health. Having a comprehensive understanding of the consumer from Open Banking’s feed of real-time data, 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 much more than how much they’re spending and where. It’s telling them what would happen if they changed habits, preferences, or sources. That’s a hugely compelling value creator for the consumer.

Can you provide some details and updates about your OB offering?

Our OB solution offers third-party providers simplified access to consumer bank account data via Account Information (AIS) and Payment Initiation (PIS) services in line with PSD2. Our OB technology is now represented by the new Klarna Kosma brand and has been developed at scale across markets for more than 15 years. It’s among the most established and proven in the world and delivers one of the best PIS conversion rates available.

We operate the largest OB network reaching 16 countries and 99% of banks. We’re also one of our own biggest customers. Our tech powers Klarna’s BNPL products – using our bank, app, and underwriting.  This makes us the only payment provider that has a proven ‘extreme-proof’ solution 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 personalised partner solutions to help drive more innovation around OB. To show we’re serious about this, we’ve created a branded business unit called Klarna Kosma.  

In the spirit of Open Banking, Klarna Kosma puts Klarna’s Open Banking platform at innovators’ fingertips - giving them the experience, knowledge, and scale to drive results and bring their most ambitious ideas to life. With our single Open Banking API, they can connect to more than 15,000 banks globally, without worrying about infrastructure or data sources. You don’t have to be a bank or a fintech. Any business that needs smooth access to financial data can use our Open Banking platform with products such as account insights, SOFORT, bank transfers, and underwriting decision making. 

How has OB influenced the finance industry and what impact will Klarna Kosma have?

OB has shifted responsibility for innovation outside of banks. It’s thrown up more possibilities for better services for consumers and helped make financial products faster and easier to access. Across banking and associated industries like insurtech, we’re seeing OB deliver the ability to consolidate and report on financial status and transactions. But to take it to the next stage, we need to think even further. The real value is in insight, forecasting, and predicting. It’s about giving consumers tools that will positively benefit their daily lives, whether that’s helping them make better budgeting decisions, set and manage goals, or accelerate ambitions.  

It’s unlikely that banks will be the ones to do this. Their focus has been far less customer-nuanced and more about migrating legacy to cloud and using PSD2 to grow ecosystems and avoid disintermediation. Instead, it’s more likely to come from fintechs, lifestyle and tech-partners – possibly even from ‘trusted’ merchants.  

At Klarna Kosma, we’re committed to helping all parties do this faster and with less investment, so they can start building uber customer-centric use cases now. We’re making game-changing OB ideas powerfully real by building on our disruptor DNA and shaking things up in a sector that has been looking the same for too long. 

What are the new banking business models you’ve noticed and how can Klarna Kosma help monetise them?

We see a lot of potential outside the more traditional target audience (banks & fintechs). Big merchants and financial management software companies are starting to use OB to better serve their clients. Klarna Kosma can help these industries bring whole product offerings to market much sooner and at a lower cost based on the building blocks that we deliver.  

For example, our ’Account Insights’ turns simple bank statements into unique insights through categorisation and data enrichment. These insights can enable a variety of use cases including personalised budget plans, insurance checks, loan applications, credit & risk assessments, personal finance management applications, and more – all through single API integration. But monetising services takes more technology, it also needs skills and passion. With Klarna Kosma, businesses also get great people to work with, our commercial knowledge, our usage data, and our ability to be inspirational.

People often wonder ‘what Klarna will do next’. What’s in the pipeline for 2022? 

We’re going to turbo-boost innovation by challenging and supporting our partners to deliver those next-generation use cases that solve real pain points and empower customers. That means shifting the goalposts beyond banking and beyond payments, so we can connect financial data faster, further, and in more ways than was thought possible.  

We’d love to hear from innovators, start-ups and forward-thinking brands who are excited to connect with us. Just imagine the solutions they can build with Klarna Kosma and access to the same platform, connections, and passion as Europe’s largest fintech.  

About Wilko Klaassen

With more than 15 years in decision-making roles at several well-known global brands and a deep understanding of global markets, Wilko is Klarna’s Open Banking VP. Three years after joining the USD 46 billion unicorn, Wilko was responsible for the expansion into France, Belgium, and the Netherlands. His ambition is to make global financial connections through Klarna Kosma and position it as a leader in innovation and future generations of financial services.

About Klarna Kosma

Klarna Kosma makes game-changing ideas powerfully real. Launched in 2022, Klarna Kosma is Klarna’s Financial Technology Platform for banks, fintechs, and innovative merchants, which are developing payment services or need access to financial data to create their own solutions benefitting the end-user. Our proven and mature platform provides essential connectivity to a growing network of more than 15,000 banks in 24 countries through a single Open Banking API. We process more than 200 mln transactions a year and are the most extensive Open Banking platform in the world. For more information, visit www.kosma.com.