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Fintech Belgium Summit 2018: Open Banking - Klarna by Aoife Houlihan


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by Aoife Houlihan

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Fintech Belgium Summit 2018: Open Banking - Klarna by Aoife Houlihan

  1. 1. Klarna Open Banking Aoife Houlihan
  2. 2. +800.000 transactions per day 500 Million purchases and counting Annual sales volume growth 40 %+ 10 % E-commerce Market Share in Northern Europe Full Banking license since June 2017 14 markets 70 million consumers 90 thousand merchants Founded in 2005. Backed by prominent investors like Sequoia Acquired Sofort in 2013 Introduction
  3. 3. It’s also true that many companies get comfortable doing what they have always done, with a few incremental changes. This kind of incrementalism leads to irrelevance over time, especially in technology, because change tends to be revolutionary not evolutionary. So you need to force yourself to place big bets on the future. -- Eric Schmidt in How Google Works Klarna is placing big bets on PSD2 and Open Banking! Our Open Banking team is +100 people strong, and our bank connectivity team, which supports access to Banks (via APIs or direct access) is already 35 people and growing!
  4. 4. COMING 2019 The European banking and payments landscape is going through a massive transformation! Roll out of PSD2 and Bank APIs for initiating SCTs, leading to the democratization of bank payment services. Evolution of instant payments in many markets, leveraging PSD2 further by making payments "real time". Increased focus on customer experience and roll out of differentiated solutions, empowered by regulatory and infrastructure developments in Europe!
  5. 5. REAL OPPORTUNITY AHEAD More secure than card payments in eCommerce, with strong authentication. More competitive pricing than cards, specially for larger orders Bank ecosystem is back at the core of payments; less disintermediation. New revenue streams From Silicon Valley startups to established payment providers: All have started a race to take a leading position
  6. 6. TPP AIS PIS KlarnaXS2AAPI BankConnectionInfrastructure Banking as a Service + 4000 European Banks
  7. 7. Performance of solution ● Many solutions have not been deployed and tested at scale ● Scalability, availability, and agility to update interfaces are not proven. A PSD2 product strategy ● This has become a favorite topic of consultants! ● Most interesting initiatives tackle specific industry problems and focus on improved customer experience. Security and fraud prevention ● Strong authentication is not sufficient to prevent other types of fraudulent activities. ● Advanced fraud prevention solutions are necessary to ensure trust and prevent losses. ● E.g. tricking the bank to initiate a transaction with money that you don't have. Marketing claims vs. real products ● As PSD2 developments are relatively recent, it's not uncommon to see marketing claims leading the way, while the "real" product is developed in parallel. There are some challenges...
  8. 8. A relentless focus on creating the best consumer experience in the industry Klarna provides a consistent UX regardless of touchpoint. Klarna tackles issues that different bank interfaces impose and provide a consistent user experience, regardless of authentication method used by the bank. Even if a proprietary device is needed. Klarna bridges the current lack of APIs (or a standard for those) by aggregating all available APIs and direct access. .
  9. 9. Beyond APIs Easy login. Easy payments. Optimized login screens allow users to login using their normal bank authentication methods, without leaving the app or screen. Security. Klarna enhances security by encrypting the client provided information on the website before submitting it to the bank. Optimization. Klarna unifies and simplifies banks’ authentication methods by performing A/B testing. Simplification results in higher conversion rates Improved online banking security Login optimized for more than 4000 banks It’s all about Conversion
  10. 10. Thank You!