Home Finance & Fintech Open Banking, Open Finance, and the power of financial data

Open Banking, Open Finance, and the power of financial data

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Daria BerdnikovaDACH & CEE Lead – Open Banking at Kurana Cosma describes the transition 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 have seen more and more players entering the open banking space. Banks, merchants and fintechs are looking at open banking from very different angles. Banks are developing and improving the quality and reliability of their APIs, sometimes going a step further and offering more data points and account types (e.g. corporate accounts different from business accounts). Depending on the region, fintech companies see open banking as a must, some even using it as a core feature of their main business product for customers, while others use it on the backend to streamline their manuals. Some companies do. process. Meanwhile, merchants are looking at ways to test potential adoption and are in the early stages of large-scale implementation. This also explains the increased demand from these types of partners.

What are the new and most interesting business and consumer-focused open banking innovations/use cases?

Pick a few and let’s focus on the ones that are already challenging enough, but not enough talked about.

    • Countless use cases with Account Information Service: Any business can leverage transaction data from consumer accounts to build a loyalty/rewards app, comparison website, or personal (or business) financial management app.
    • Internally, we sometimes refer to this as Payment Method as a Service, and we believe merchants or payment solution providers with well-known brands can implement their own bank-based payment methods at checkout. Obtaining funds directly from consumers while bypassing payment providers have both time and cost-effectiveness benefits. Bundling rewards with some loyalty components is a recipe for success.
    • “Digitalized” direct debits through Open Banking solve all the limitations of this payment option. One of the most common problems with direct debits is the possibility of fraud. If an individual can enter another person’s IBAN and no risk checks are made, the order will be processed and the goods will be received. Open Banking allows you to verify your identity and optionally check your balance before signing a direct debit mandate. In addition to fraud, a simple manual error by the consumer manually entering her IBAN also leads to losses on the part of the merchant. Before signing and processing the direct debit mandate, ensure that the corresponding account holder has a valid IBAN for her.

What are the factors driving the move from open banking to open finance, and what does this mean for Klarna Kosma? What impact is open finance having around the world?

We believe that data is now the world’s most valuable asset. According to The Economist, 97% of businesses use data to drive business opportunities. While some data allows predictions and predictions to be made, and insights from multiple sources can be used to form hypotheses, Open Banking data is based on factual historical data and can be analyzed in a variety of ways. , and can feed very complex data models.

Today society uses financial services in many ways, from trading stocks and cryptocurrencies to loans, mortgages and pensions. Leveraging data from these market participants and integrating it with open banking data provides a comprehensive view of overall financial health. Open data is the next step, integrating both financial and non-financial data for consumers and businesses. Long-term benefits include more customized product offerings, hassle-free paperless service, faster onboarding, and more.

For Klarna Kosma, the move to open finance is imminent. Within the Klarna universe, we are already powering identity verification solutions that utilize open banking data, in addition to other data, to verify consumers. As Kosma, we empower retailers, insurers and fintechs who use open banking data in their daily 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 are one of the world’s most scalable and proven open banking providers. We provide connectivity to 15,000 banks in 26 countries, making us the go-to provider for companies with international ambitions who want to expand quickly and sustainably. Our approach has changed significantly over the past year, moving from offering PIS, AIS and account insight services to offering use case-driven products such as validation, multi-banking, bank transfers, classification and risk management. bottom. You can now see all the use cases on our website.

We expect a large influx of traditional merchant businesses looking to use open banking. We are in a great position to support them with our background in retail and basically speaking the same language.

This interview Open Banking and Open Finance Report 2022. click here.

About Daria Berdnikova

Both personally and professionally, Daria Berdnikova is an absolute fintech and open banking enthusiast. With all her knowledge of the payments and fintech industry, she has spent most of her career working with major fintech companies in Russia and Germany, focusing on banking as a service, card acquisition and other payments. He was driving the commercial business and sales of the solution. institutions and fintech. At Kosma, Daria leads her DACH & CEE sales, helping businesses reach over 15,000 banks through her Kosma Open Banking solution.

About Klarna Kosma

Kurana Cosma Powerfully turns groundbreaking ideas into reality. Launched in 2022, Klarna Kosma is a platform for banks, fintechs and innovative companies developing payment services or needing access to financial data to create unique solutions that benefit end users. Klarna’s financial technology platform for smart merchants.

Our proven and mature platform provides essential connectivity to a network of over 15,000 banks in 27 countries via a single open banking API. We process over 1 billion transactions annually and are the broadest open banking platform in the world.

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