Sebastian Siemiatkowski doesn’t appear to be a banker. The Klarna CEO attire extra like a tech bro, which is befitting as his firm straddles the world of finance and know-how. He rushes into our early morning interview, bespectacled and in denims, a T-shirt, a navy button-up and white sneakers, the footwear high-end ones by the French trend home Céline. He tells me he was up late “vibe coding”—coding by “really feel” utilizing a big language mannequin like ChatGPT (Siemiatkowski is pals with OpenAI boss Sam Altman) relatively than by a programming language like Java, C# or Circulation.
“The one factor I type of remorse in my life shouldn’t be studying to code and be an engineer,” the Stockholm Faculty of Economics alumni says. “Sorry, that’s what it’s.”
Siemiatkowski based Klarna with some pals in his native Sweden in 2005, rapidly increasing throughout Europe with its buy now, pay later—or BNPL—service, which permits clients to cowl the price of an merchandise or basket of products bought on-line in a number of interest-free funds. The corporate launched in the U.S. in 2019 and has flourished as the choice to a bank card has gained extra traction. One in 5 U.S. shoppers have used BNPL, virtually half of them underneath the age of 36, with cost volumes anticipated to swell from an estimated $122.3 billion final yr to $184.1 billion by the tip of the last decade. Retailers utilizing Klarna, which in the U.S. embody Walmart, Goal, Amazon and Ticketmaster, incur transaction charges starting from 3.29 p.c to five.99 p.c, in addition to a small fastened price per transaction.
BNPL shouldn’t be with out its critics. Ramit Sethi, host of the Netflix collection Learn how to Get Wealthy, final month told Newsweek during an interview on the Newsmakers: IMPACT series, “BNPL [is] an enormous hazard particularly focused at younger folks, folks of shade, people who find themselves not conscious of how the remainder of the trade works. They’re principally prey. They’re being preyed upon.”
Klarna says lower than 1 p.c of its clients default on funds, with 31 p.c paying off their debt early and greater than 90 p.c not paying any curiosity. This compares with a default charge of about 8.5 p.c on bank cards, which cost curiosity various between 17 and greater than 30 p.c for cardholders carrying a steadiness. BNPL transactions are a fraction of what’s spent on bank cards, with $1.2 trillion in debt owed on playing cards in the U.S. with a mean steadiness of round $6,500. Klarna says its common buyer transaction is about $100. President Donald Trump has requested Congress to cap bank card curiosity at 10 p.c for one yr to “help millions of Americans save for a home,” he said in a speech at the World Economic Forum in Davos, Switzerland, final month. Siemiatkowski says Trump is true on this, including: “Rate of interest caps work properly in many international locations.”
BNPL is only one string to Klarna’s rising bow—which incorporates an app, different cost choices, value comparability instruments and rewards and cashback provides—because the “neobank” evolves its companies (it was granted a full banking license by the Swedish Monetary Supervisory Authority in 2017). Siemiatkowski rang the bell on the New York Inventory Trade when Klarna went public final September at $40 a share. Its value has since halved.
With its vivid pink brand and advert campaigns which have featured celebrities together with Paris Hilton, Lady Gaga, Maya Rudolph, Snoop Dogg and A$AP Rocky, Klarna could be very a lot concerning the vibes as Siemiatkowski goals to disrupt banking norms and seize a chunk of the motion with what he calls a extra customer-focused method. Every thing, from the best way he attire to the way in which his firm communicates with clients, intentionally goes in opposition to the standard mind-set.
“I may virtually argue I’m the Occupy Wall Road technology,” he says concerning the 2011 protests in opposition to the banking trade that adopted the collapse of the subprime mortgage market, which torpedoed Lehman Brothers in 2008 in addition to the worldwide economic system.
“Our interpretation was that the historic approach in which banks had communicated belief to some extent was marble workplaces, lovely fits and ties, and that’s it. The quantity of people that related that with belief dropped dramatically.
“So we realized that…in the longer term, to be reliable, you must communicate the language of the shopper. You must permit your self to be pleasant, approachable, participating, don’t overcomplicate issues that really can be simplified. And Snoop Dogg and Girl Gaga and Paris Hilton and quite a lot of the celebrities that we’ve been doing campaigns with through the years have been about that,” Siemiatkowski says. “We realized if we would like them to hear and have interaction with them, they’re simply extra more likely to hearken to Snoop Dogg, to be trustworthy, than some man in a swimsuit.”
Siemiatkowski has a degree. Religion in the banking system has, in response to Gallup, tumbled since 1979 with every main financial shock and hunch that adopted: the recession in the early Nineteen Eighties and Black Monday in 1987, the 2007/8 monetary disaster and the COVID crash of 2020. Simply 30 p.c of People mentioned they trusted banking establishments in 2025.
However vibes alone aren’t going to chop it with shoppers, and Siemiatkowski is aware of it. He argues that the tech and banking industries now create extra earnings primarily because of an absence of buyer mobility, leaving them captured in programs the place it’s too troublesome to vary suppliers. So his staff has got down to deal with this drawback, tying up with Altman’s OpenAI in 2023 to assist make this actuality. So far the collaboration has yielded a plugin to personalize Klarna clients’ purchasing experiences and to assist cope with some customer support points. But Siemiatkowski desires Klarna to go a lot additional, together with into mortgages and past.
“Finally you’ll get up having a digital monetary assistant. ‘Hey, whenever you have been sleeping, I analyzed your mortgage, and I spotted you have been overpaying. You would be saving $30 a month, proper? And the one factor it’s worthwhile to do to get a mortgage from this totally different financial institution—I’ve already negotiated it for you, it’s all carried out, the paperwork is completed—the one factor you want is to say sure. Proper?’
“And I feel at that time of time you’ll be like, do I actually love my financial institution that a lot? Or is it simply wonderful? Can you simply go and swap and save me 30 bucks? So this was what we type of caught to and mentioned, like, that’s the future.”
Pressed on when this can occur, Siemiatkowski gained’t say, however the married father-of-three likens it to self-driving vehicles: “You didn’t actually see them in the streets after which I used to be with the youngsters in San Francisco and abruptly I’m in a Waymo. And I’m like, oh my God, it’s taking place, proper? So that is going to occur.”
The Privateness Problem with AI
The considered an AI toiling away behind the scenes to seek out methods to save lots of money may sound enticing. However Aaron Klein, senior fellow in financial research specializing in fintech and regulation on the Brookings Establishment, a nonpartisan, nonprofit assume tank, sees many hurdles earlier than something like this may very well be delivered to life.
“You’re going to must see folks placing the cart earlier than the horse right here, as a result of it’s one factor whenever you cope with any person’s data, it’s one other factor whenever you cope with any person’s cash,” Klein tells Newsweek over a video name.
“Giving permission to a 3rd celebration to undergo all of your funds? Look, possibly that will happen. Persons are very schizophrenic in relation to their privateness. They inform you they worth it tremendously and also you say, ‘OK, would you need the world’s largest firm to know your real-time location?’ ‘No, completely not. That’s personal.’ ‘Do you utilize Google Maps?’ ‘Properly, yeah, it’s superior.’ Guess what trade-off you’re doing?
“If I e-mail my spouse, ‘Hey, do you assume the youngsters are sufficiently old to go to Disneyland this yr?’ I do know what my banner advertisements are going to appear to be for the subsequent month.
“So are folks going to need the AI to be studying all of their banking data? How are they going to get entry? How are they going to log in to see all of their balances throughout their life to have the ability to know these calculations and questions and what is going to occur legally should you go flawed?… Who’s liable in a scenario the place you click on that button and your cash simply obtained stolen? And so I feel there are quite a lot of questions.”
Adam Rust, director of economic companies on the nonprofit Shopper Federation of America, is equally doubtful about AI’s position in sourcing one of the best banking offers primarily based in your monetary scenario.
“Imagining this stuff occurring in a generative AI chatbot surroundings ought to concern all of us as a result of the foundations for privateness and use of your data are actually not properly established and more likely to change. So a product like that requires, in my view, quite a bit to be carried out to boost the controls we’ve got over our data. We don’t have that now,” he tells Newsweek over a name.
“Fintechs are options trying for patrons, proper? And generally they stick and incessantly they don’t. However the protections that individuals want are typically extra more likely to be in the agency, strong floor of contained in the banking system.”
AI Instruments in Banking: From Funding Assistants to Buyer Assist
Synthetic intelligence stays a approach in which monetary companies firms hope to boost their choices. Robinhood Markets, the fintech based by Baiju Bhatt and Vlad Tenev, finest recognized for its commission-free buying and selling app that grew in recognition in the course of the COVID-19 pandemic, makes use of AI in all the pieces from its customer support providing to its funding assistant.
“We would like nice design and a differentiated expertise and we would like one of the best pricing and economics for our clients. And people are form of the rules we abide by when we’re choosing what to construct subsequent,” Abhishek Fatehpuria, vp of product at Robinhood, tells Newsweek in a video name.
“I feel our place has been, it’s typically actually straightforward so as to add a chatbot and do AI for the sake of doing AI in the product. We’ve taken a really totally different—and what I wish to assume is a way more intentional—method.”
One of many merchandise Fatehpuria and his staff are engaged on is a commerce builder, “the place a buyer may categorical a speculation on a specific inventory. So they may say, I feel a specific inventory goes to go as much as this value by this date and we might present the shopper a set of methods that they may use…to precise that speculation,” Fatehpuria says.
“One factor we’ve discovered from our clients is that they typically have a great speculation for an funding, however they don’t know the way to translate that to an precise commerce or an precise funding. So that’s one thing we’re already trying into.”
Critics declare Robinhood’s interface has “gamified” investments in a approach that’s not useful to its clients.
Rust, from the Shopper Federation of America, says: “Robinhood is doing a lot of issues that aren’t useful, corresponding to gamifying investments, encouraging folks to make use of sophisticated put and name methods most individuals can’t perceive, and it makes it appear to be a type of playing and a rival to a sports activities app, even a bit of betting app. These sorts of instruments aren’t useful.”
Fatehpuria counters that criticism by saying: “I don’t assume we should always equate nice design and nice product high quality and nice product expertise with gamification.
“We assist quite a lot of differing kinds of investing on Robinhood. A number of our clients are buy-and-hold buyers. We’ve a subset of our clients which are extremely lively merchants and so they wish to have management over their cash. And we provide all of the instruments that they should management their monetary future.”
In fact, it’s not solely new fintech startups which are getting behind AI. So-called legacy banks are including the know-how to their programs to seek out methods to enhance productiveness and higher serve their clients too.
“I’ll offer you a tangible instance,” Hari Gopalkrishnan, Financial institution of America’s chief know-how and data officer, tells Newsweek. “Previously, when a relationship banker needed to fulfill a [business banking] consumer, they might spend, like, a number of days…to analysis all the pieces about what the consumer wants.
“This yr, primarily based on some AI options we’ve created, that individual can say, ‘I’m going to go see buyer X,’ we’ll mechanically go pull from that buyer’s curiosity profile. We’ll go to third-party supply, we’ll create that transient, which is the primary draft that now the teammate can run with and say, ‘Oh, let me edit a number of issues, and I’m off to go to the consumer.’” Gopalkrishnan is fast so as to add that people will stay a part of their customer support providing; AI permits them to be “excessive tech and excessive contact” with know-how solely going up to now.
“We are going to draw the road not the place know-how can finish, as a result of know-how can go a lot additional than that, [but] the place we predict that we should always let the shopper really discuss to a human who can apply a judgment and human overlay to guard the consumer. And in order that’s type of the place we’ll draw the road,” he says.
“We don’t wish to lead with know-how for the sake of know-how. We like to guide with, ‘What’s the buyer drawback at hand?’”
Whereas many banks tout the effectivity features AI is making and can proceed to make, this can affect jobs. Bloomberg Intelligence reported early in 2025 that as many as 200,000 banking jobs worldwide may very well be reduce because of AI in the subsequent three to 5 years, whereas Morgan Stanley predicted in December 2025 that the identical variety of roles may very well be misplaced in Europe alone by 2030. Siemiatkowski says AI has helped Klarna scale back its headcount in a “humane, moral approach” by not changing roles after employees depart the corporate relatively than through layoffs.
Crypto Meets Banking
Cryptocurrency was as soon as considered by many as only a device utilized by drug sellers, gun runners and different nefarious denizens of the darkish net to make covert, nameless funds throughout worldwide borders. Whereas it’s doubtless that also occurs, crypto has additionally grow to be enmeshed in the standard banking system as the worth of currencies like bitcoin, created in 2009, have elevated, particularly so because the reelection of Donald Trump as president.
In March 2025, Trump signed an government order to set up a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. In August final yr, he signed one other to permit 401(ok) buyers to entry different investments, together with cryptocurrencies. “Bitcoin stands for freedom, sovereignty and independence from authorities coercion and management,” he instructed a bitcoin convention in Nashville, Tennessee, on the marketing campaign path in 2024. The Trump household additionally co-founded a crypto start-up, World Liberty Monetary, that yr. Trump’s bullish stance noticed the worth of bitcoin surge to over $120,000 (it has since plunged to round $70,000) following his victory on the polls in November 2024.
It’s a dramatic turnaround from what Trump instructed Fox Enterprise in 2021, that bitcoin “looks as if a rip-off.”
Siemiatkowski has had an identical change of coronary heart, asserting, after years of skepticism, on X: “OK. I give up. Klarna and me will embrace crypto!” The publish has had greater than 1.1 million views.
“The response,” Siemiatkowski tells Newsweek, “it gave us so [many] good concepts. Individuals contacted us, they mentioned, you ought to do that, you do this, we should always do this. So there’s quite a lot of ongoing initiatives at Klarna, and we’re going to carry quite a lot of issues in the market to this. And I do assume that it’s going to be an important different to the type of conventional options in the markets, however it’s additionally going to drive down prices.”
Richard Teng, co-CEO of Binance, the world’s largest crypto platform, agrees cryptocurrencies and secure cash (pegged to a flat foreign money just like the U.S. greenback) are certainly the way forward for cash, and might assist in regular, aboveboard cross-border transfers in addition to assist people who find themselves “unbanked,” which the World Financial institution estimates to be 1.4 billion adults globally.
In 2023, Binance agreed to pay over $4 billion in penalties after pleading responsible to conspiracy to violate the Banking Secrecy Act, violation of the Worldwide Emergency Financial Powers Act (colloquially referred to as financial sanctions) and failure to register as a cash transmission enterprise.
Its then CEO, founder Changpeng Zhao, additionally pleaded responsible for his half in Binance’s failure to keep an efficient anti-money laundering program. He resigned from the corporate however stays its majority shareholder. Zhao was pardoned by Trump in October 2025.
“Crypto will essentially change how foreign money and funds work by making them extra decentralized, clear and accessible. In contrast to conventional cash managed by centralized our bodies, crypto allows transactions which are sooner and cheaper. Intermediaries are minimized or eradicated altogether,” Teng tells Newsweek.
“We’re already seeing crypto combine with current programs, like Brazil’s PIX or QR code funds in Argentina, making a seamless mix of conventional and digital currencies. This interoperability will construct a extra versatile and resilient monetary ecosystem.”
That mentioned, solely about 15 p.c of People personal crypto, whereas three-quarters of these polled by Franklin Templeton and YouGov in July 2025 would relatively personal a gold bar than bitcoin.
“So crypto is an asset masquerading as a cost instrument, proper?” Brookings’ Klein says. “I don’t assume anyone’s utilizing bitcoin to purchase actual issues.”
Mehrsa Baradaran, professor of regulation on the College of California, Irvine, and creator of How the Different Half Banks: Exclusion, Exploitation, and the Menace to Democracy, equally doubts the guarantees made by the crypto trade.
“We’ve seen this promise earlier than. It’s not as disruptive as they assume,” she tells Newsweek. “Bitcoin solely grew to become useful when it obtained into the system. It’s not as different because it was once.”
It’s a Matter of Trust
Klarna’s Siemiatkowski seems passionate, earnest and honest when he speaks about championing shoppers and, with the assistance of synthetic intelligence, offering them the instruments to make higher monetary choices. He says: “I wish to earn that belief from the shopper. I wish to assist them. And mortgages is a great instance as a result of folks relate to it. However the fact is, it’s the on a regular basis spend… It’s save time, lower your expenses and be in management. These are the three issues.”
For all of the promise of a simplified monetary companies future made attainable by AI, and the billions spent by the banking sector to make it occur, the American public nonetheless has reservations. In line with a YouGov ballot launched in January, simply 19 p.c of People belief AI in monetary companies, with 48 p.c saying they don’t. “Performing on my behalf to maneuver cash or make transactions (with approval)” and “performing on my behalf to make monetary choices mechanically” have been the least trusted features of banking AI.
For Baradaran, AI improvements are simply “distractions” and “pseudo-solutions” to the wealth and earnings inequality that she says has grow to be an financial drawback in the U.S. and different closely indebted developed nations, in addition to a main reason behind the political stress we’re witnessing now. A big collective panic, much like the one seen in 2007/8, may topple the present banking system, she says, and result in a world reset, which she hopes could be constructive.
“The long run shall be sooner and extra unpredictable. The tempo of change has elevated. There isn’t a individualist option to defend [against it],” Baradaran provides.
Whether or not a pleasant message, delivered by a person in T-shirt, denims and sneakers, is sufficient to sway the subsequent technology of spenders, savers, buyers, debtors and mortgage-holders to enroll to this digital future of cash stays to be seen.
Gradual Funds Drawback: A more recent standardized system for shifting cash may make it cheaper, sooner and safer for U.S. shoppers
What would assist the common American, Aaron Klein, senior fellow on the Brookings Establishment assume tank, insisted, is an ordinary sooner cost system to match these in the U.Okay., EU, India and Brazil—the place cash might be despatched and acquired securely and close to instantaneously by and huge at no cost, 24/7, 12 months a yr. Within the U.S., the overwhelming majority of funds are nonetheless made through Automated Clearing Home, or ACH, which was designed in the Seventies and might take a number of enterprise days to course of.
Switch Delays
In 2023, the Federal Reserve created FedNow, which provides real-time funds 24/7; nonetheless, it’s not customary however non-compulsory for banks to hitch. Some 1,600 insitutions have, however Financial institution of America, for one, doesn’t use it. Actual Time Funds, run by The Clearing Home, owned by a number of the world’s largest banks, together with BoA, supply immediate funds for a small price. Wire switch charges are a lot, a lot greater.
Klein mentioned: “If Brazil can do it with widespread adoption, so may America. However we don’t as a result of locking low-income folks into high-cost overdrafts helps preserve sure banks the Fed regulates worthwhile.”
Banks nonetheless course of checks and ACH transfers price trillions of {dollars} yearly and earn curiosity on the “float”—cash that hasn’t moved between accounts but—as these funds can take one to 3 days to course of. That lag may also set off overdraft and non-sufficient funds—or NSF—fees for patrons, particularly these on low incomes who don’t have massive financial institution balances. These fees earn billions of {dollars} for banks. It’s estimated half of all People have lower than $500 in financial savings.
There may be Zelle, which is typically free and primarily used for peer-to-peer transfers, however for which there isn’t a recourse: cash unintentionally despatched to a flawed account often can’t be returned to the sender. That irreversibility has made it a hotbed for fraud.
Fraud Prevention
A Senate probe discovered 4 banks reported greater than 190,000 instances in which clients reported being fraudulently induced into authorizing funds on Zelle, totaling over $213 million in losses in 2021 and the primary half of 2022. The three banks that supplied full knowledge reported repaying clients in solely 9.6 p.c of rip-off claims price $2.9 million, the report mentioned.
Financial institution of America’s Hari Gopalkrishnan instructed Newsweek that 99 p.c of transactions at its client financial institution are digital and totally automated. The financial institution has been working with FedNow in order that BoA shall be able to undertake it “when the time comes.” He mentioned: “It’s a matter of when is the appropriate time to form of embrace it primarily based on each trade want and consumer want.”
He added BoA has been addressing points with Zelle. “Zelle has been on a gradual enchancment slope for a while…There’s quite a lot of steps now thrown into the method the place a buyer is now educated on ensuring they’re doing the appropriate factor and sending it to the appropriate individual. Equally, there’s quite a lot of funding made in analytical and AI fashions which are there to detect the type of fraud and scams that you’re seeing. So there was a full level pledge effort throughout the organizations to guard [against] fraud and the outcomes have been excellent. I feel we’ll proceed investing there as a result of…with AI, fraudsters are going to maintain attacking it. We simply must preserve making it higher. We can’t relaxation on our laurels there.”
Illustration by Carl De Torres for Newsweek
