The Swedish Finance Technology Corporation, Klarna, is promoting further expansion of its United States operations to the traditional banking arena. The company disclosed that an application had been made to federal and state regulators for the establishment of a bank subsidiary in Utah that was covered by the United States Federal Deposit Insurance Corporation (DFIC).
The application is in Utah.
If approved, the proposed Klarna Bank USA will become Klarna's own banking platform in the United States. The company indicated that this would help it to integrate more payments, credit and business services into the internal system and reduce its reliance on third-party cooperative banks.
Klarna stated that the proposed bank would be based in Utah and would be headed by Gary Harding, who had served as Chief Executive Officer of Milestone Bank and Prime Partnership Bank.
Once approved, the license expands the product. Line
The company's CEO Sebastian Siemiatkowski stated that Klarna had seen the demand for more transparent financial services in the United States market and that its own bank licence was a natural extension of the next expansion.
Having a bank licence, financial technology companies can often directly absorb the deposits of their clients and provide a source of funding for the lending business without relying more on more costly wholesale financing. This also means that Klarna has the opportunity to expand more traditional banking products, such as check accounts, credit cards, in addition to “buy-on-pay” payments.
- Available customer deposits to support the disbursement of loans
- It can directly expand traditional banking products.
- Reduced reliance on cooperative banks
Financial Technology Corporation speeds up its own license.
The application also reflects a new trend in the financial science and technology industry: an increasing number of companies wish to hold their own bank licences rather than relying on external banks for a long time to provide bottom accounts and compliance.
The report mentions that before that, Mercury, a financial technology company, had been granted conditional approval earlier this year to move forward with the establishment of its own bank. For Klarna, if this application is approved, its business model in the United States will move further from a single consumption phased service to an integrated financial platform covering payments, deposits, loans and commercial services.
Additional information:Klarna was listed last September. According to reports, the company ' s share price is currently about half of the issuing price of $40 per share.