Banks will be faced with “massive disruption” in the next five years amid competition from financial technology challengers, the chief executive of Swedish bank Klarna told CNBC on Tuesday.
New European legislation that was introduced at the start of the year, called PSD2, requires banks to share their customer data with third-party providers to enable them to create new financial products.
Sebastian Siemiatkowski, Klarna’s boss, said that this new regulatory framework and the rise of tech-driven banking players are a recipe for significant competitive pressure on traditional lenders.
“I’m one of those people who always say disruption is going to take 10 years or 15 years,” Siemiatkowski told CNBC’s Elizabeth Schulze at the Slush tech conference in Helsinki, Finland.
“I actually now really think that, with PSD2, there is going to be massive disruption to the retail banking space in the next five years. I just see all the prerequisites are there: the customers are willing now to switch, it’s easy to switch, the services are better, with the new people coming into the stage.”