Exclusive: Klarna spins open banking API strategy with dedicated unit

By Daniel Lanyon on Thursday 31 March 2022

Alternative LendingDigital Banking

‘Klarna Kosma’ an open banking sub-brand and business unit of the fintech giant is booming.

Exclusive: Klarna spins open banking API strategy with dedicated unit
Image source: Klarna

Klarna is best known for riding the crest of ‘buy now, pay later’ wave but its booming open banking business is its new move.

In the past year, the company has stealthily created a dedicated unit devoted to open banking, including doubling its bank connectivity in the past year from 6,000 to 15,000 banks making us the largest bank aggregator in the world.

The Swedish fintech company, which is valued at £34.1bn according to its last round of funding, saw losses swell more than five-fold in 2021 to £560m as it was hit by costs of entering new markets and bolstering its product offering last year. Nonetheless, its growth rates are stellar as its core 'buy now, pay later' market continues to grow rapidly around the world.

It has operated open banking to help power this growth for a number of years but will increasingly focus on selling this platform to third parties. 

It first entered the Open Banking space when it acquired SOFORT, a leading direct bank-to-bank payment service in Germany, in 2014. Since then Klarna has developed the service, expanding it to power additional in-house services. 'Klarna Kosma’, as it has dubbed its new open banking sub-brand, provides access to banks, reducing the time for new fintech services to reach global audiences in 24 countries around the world through a single API. 

“With Kosma we are opening up the power of our proprietary Open Banking platform and technology to banks, merchants and fintechs who share our dream of a world where consumers own their data and banks compete for customers by delivering value, not by locking in data,” said Yaron Shaer Klarna's chief technology officer in a statement.

One such business currently using Kosma is FINOM, an Amsterdam-based fintech start-up offering SME business banking, for freelancers in France, Germany and Italy. 

“Over the past year, the demand for Open Banking services from financial institutions and fintech start-ups, has reached a tipping point,” says Wilko Klaassen, VP, Klarna Kosma, “which is why we have built a dedicated business unit which brings together engineering, product management, sales and marketing all together in the same team to focus on this $15bn, fast-growing market.

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Klarna