trending
In 2018 the term ‘Fintech’ finally entered the dictionary. The term is part of our everyday industry speak but it is now in the wider lexicon. The definition is: “products and companies that employ newly developed digital and online technologies in the banking and financial services industries” – whichof course is factually correct. However, in my opinion, it is lacking a key dimension, what does Fintech actually solve? What does it contribute to society? Why does it actually matter to consumers? Technology is a tool but not an end in itself. That is why at Klarna, we do not start with technology, but first focus on the question “what are we solving?” It is on this point where we at Klarna believe the real journey has only just begun. Never before have people had this much technology at their fingertips. Despite access to faster internet, better devices and smarter services, people actually have increasing complexity in their lives and find it harder to solve their daily time equation. This is especially true when it comes to handling money and managing purchases. People now spend more and more time worrying and administering their finances and less time doing what they love. We therefore need to eliminate this unnecessary friction and complexity in an increasingly bureaucratic, slow and impersonal world. That means offering services that help people seamlessly pay, finance, manage and keep track of their purchases. It is my belief that we as an industry will have failed in many ways if we cannot have a meaningful impact in empowering consumers to manage their daily financial life.
In the context of this report, the four elements of ‘relevance’, ‘openness’, ‘automation’ and ‘data’ identified as critical to the future development of fintech are also fundamental to building consumer orientated solutions. This is not coincidental. The consumer will simply no longer be forgiving when their bank or service provider does not leverage the insights available to make their engagement personalised, intelligent and simple. This is not about betting on future products but rather future behaviours.
There is also a clear maturation of views on openness and the historical lines between competitors, partners and customers are blurring. The overall strength of the ecosystem and partnerships will continue to be of utmost importance, not least as the value in specialism becomes increasingly clear. Such is the breadth and complexity of technology as well as market and consumer demands across sectors. It is obvious, no one entity can adequately fulfill all needs to everyone at the level required. We will all need each other.
Ultimately, we at Klarna believe that those who have the courage to act and change things based on customer needs are going to be the ones that are successful.
I hope you will enjoy this year’s report and gain some new and valuable insights into how the market will evolve in the coming year.
