The shift from Open Banking to Open Finance and the power of financial data

Thursday 2 February 2023 09:14 CET | Editor: Raluca Ochiana | Interview

Daria Berdnikova, DACH & CEE Lead – Open Banking at Klarna Kosma, discusses the shift from Open Banking to Open Finance and the power of financial data.



How would you describe the demand for Open Banking services from banks, merchants, and fintech startups over the past year?

We’ve witnessed more and more players entering the Open Banking space. Banks, merchants, and fintechs are looking at Open Banking from completely different angles. Banks are developing and improving their API quality and reliability, sometimes going an extra mile and providing more data points and types of accounts (for example corporate accounts, which are different from business accounts); depending on the region, fintech companies are either considering Open Banking a must-have, some using it even as a core functionality within their primary business products that are customer facing, while others, use it in the backend to e.g. streamline some of the manual processes. Merchants on the other hand are looking at ways to test the potential adoption and are in the early stages of implementing it on a bigger scale. We are running some POCs with exceptional results for merchants which also explains the increasing demand from these types of partners.

What are the new, most interesting business and consumer-focused Open Banking innovations/use cases?

To pick a few, would be already challenging enough but let's focus on the ones that are not being talked about enough:

  • Countless Account Information Service powered use cases: any company can leverage transaction data from consumer accounts and build loyalty/rewards apps, comparison websites, or personal (or business) finance management apps;

  • Internally, we sometimes call it Payment Method as a Service and believe a merchant or a payment solution provider with a highly recognisable brand can implement their own bank-based payment method in the checkout. Getting funds directly from a consumer, while bypassing a payment provider is both a time and cost-effective benefit. Bundling it with rewards and some loyalty components is a recipe for success;

  • ‘Digitising’ Direct Debit with Open Banking is solving all the limitations of this payment option. One of the most common problems with Direct Debit is still the possibility of fraud – an individual can enter the IBAN of another person and if no risk checks are done, the order will be processed and goods received. Open Banking allows one to verify the identity and, if required, check the balance before signing a direct debit mandate. Besides fraud, a simple manual mistake of consumers typing in IBAN manually also leads to losses on the merchants’ side. We help make sure there is a valid IBAN with the corresponding account holder before the direct debit mandate is signed and processed.

What were the factors driving the shift from Open Banking to Open Finance and what has this meant for Klarna Kosma? What is the impact of Open Finance across the globe?

We are certain that data is now the most valuable asset in the world. According to The Economist, 97% of businesses use data to power their business opportunities. While some data allows for predictions and forecasting to be made and uses insights from multiple sources to form hypotheses, the Open Banking data is based on factual historical data that can be leveraged in many different ways and be fed into the very complex data models making them more comprehensive and accurate.

Nowadays, society consumes financial services in different forms, from stock or crypto trading to lending, mortgages, and pensions. Leveraging data from these market participants and merging it with Open Banking data can give one a comprehensive view of overall financial health. Open Data will be the next step and will merge both financial and non-financial data of consumers and businesses. Long-term benefits would include more tailored product offerings, hassle-free paperless services, quick onboarding, etc.

For Klarna Kosma, the shift to Open Finance is imminent. Within the Klarna universe, we already power Identity verification solutions which also utilise Open Banking data on top of other data that we have in order to verify consumers. As Kosma, we power retailers, insurance companies, and fintechs who use Open Banking data in their daily business operations.


What are the company's plans for the near future? How do you expect Open Banking and Open Finance to grow from here?

We're one of the most scalable and proven Open Banking providers in the world. We provide connections to 15,000 banks in 26 countries and are thus the go-to provider for companies with international ambition that want to scale quickly and sustainably. Our approach has significantly changed this past year and has shifted from offering PIS, AIS, and Account Insights services to offering use case-driven products like Verification, Multibanking, Bank Transfers, Categorisation, Risk Management, and so on. You can see all the use cases now on our website

We expect a large inflow of classic merchant businesses looking into using Open Banking, and we are in the best position to support them, having a retail background and basically speaking the same language.

This interview has first been published in the Open Banking and Open Finance Report 2022. Click here to download the report.


About Daria Berdnikova

Privately and professionally, Daria Berdnikova is an absolute fintech and Open Banking enthusiast. With 360-degree knowledge within the payments and fintech industry, she spent most of her career at leading fintechs in Russia and Germany where she was driving commercial business and sales of Banking as a Service, card acquiring and other payment solutions with the focus on financial institutions and fintech. At Kosma, Daria is leading the sales for DACH & CEE and helps companies to access more than 15,000 banks through the Kosma Open Banking solutions.


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 27 countries through a single Open Banking API. We process more than 1 billion transactions a year and are the most extensive Open Banking platform in the world.

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Keywords: Open Banking, Open Finance, financial data, fintech, banks, payment methods, merchants, startup
Categories: Banking & Fintech
Companies: Klarna Kosma
Countries: World
This article is part of category

Banking & Fintech

Klarna Kosma

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