The Secret Ingredients of Innovation in Fintech with Robin Lantz and Marcus Johansson

We spoke with two Senior Design Leads at Klarna, the Swedish fintech company, Marcus Johansson and Robin Lantz, to find out more about the changing landscape of fintech. They discuss the opportunities and challenges of new technology, innovation, and how user behavior has changed - perhaps forever.

Fintech is a booming industry, driven by a combination of new technology, changing user behavior, and improvements in modern digital laws.
Online shopping became essential during the pandemic, further fueling an inevitable shift in customer behavior. What made this shift easier was the fintech companies offering convenient ways to process payments.
Those familiar with online shopping will have already adopted fintech products into their lives, whether it’s online banking apps, PayPal, Revolut, or Klarna. Now, these financial services and apps have become part of our day-to-day lives.

Daria Michalska: Could you both introduce yourselves and say a few words about Klarna?

Marcus Johansson: I work as a Senior Design Lead at Klarna in the app design department. Klarna is a fintech company focused on payments originally, but now we consider ourselves more as a shopping company. Our most popular feature right now is "the buy now, pay later" feature.
Robin Lantz: I’m quite new to Klarna, but I’ve previously worked in fintech at another Swedish company called Tink, which involved creating a platform for bank aggregation.

Could you elaborate on what exactly Klarna is and why it’s so popular?

Marcus Johansson: eCommerce and online shopping have been around for some time now. Since the pandemic, many of us were forced to do a lot of our shopping online, but there are many advantages to doing so.
However, one area where online shopping is difficult is trying out products before buying. At Klarna, we help to provide more convenient ways to pay for products that allow the customer to try them out before actually paying.

In recent years, we’ve seen a huge boom in fintech companies. Why do you think that is?

Robin Lantz: One thing that the likes of Revolut, Robinhood, and Klarna have in common is that they reduce the threshold for users to try it out. Signing up to Revolut or trading stocks with Robinhood is such an amazingly easy thing to set up.

Marcus Johansson: I agree. As Robin said, it gives more value to our users because services such as Klarna are so easy and convenient to try out. What also helps is that people are much more open to trying out new digital services, and there has been a generational shift towards that.

What would you say are the main pillars of success in the new wave of fintech services?

Robin Lantz: I think the industry is a little untapped still. We still do what we used to do, but in an easier, digital context, but we haven’t investigated the potentials that the future holds. We use digital services for payments and bank accounts, but I think there’s something beyond that, which we don’t see yet.
Marcus Johansson: I think the needs are probably still the same in the finance world because we live in the same society. I think there’s a slow evolution happening in the background where we as a fintech company can propose better-suited products to our users. We want to be a fast-paced company that’s always listening to our users so we can help them in the best possible ways. Maybe that could help us to propose newer and better types of products in the future.

What will this evolution look like, and will it involve things like cryptocurrencies?

Marcus Johansson: That's going to be so interesting to follow and see what will happen with that and the potential for new products and services. That will be huge when it comes to that part of the industry, for sure.
Robin Lantz: With smart tech and AI, fintech services can often provide a better experience but in a digital context. I think the democratizing effects of that digitization are quite cool. Even if you’re not Bill Gates, you can still utilize those kinds of services, and it makes it easier for normal people to better understand money.

You mentioned that it’s not just technology. It’s also customer behaviour that fuels change, but which comes first?

Marcus Johansson: My experience is that it differs. You might have companies that are a little bit ahead of the time, proposing great new products, but the users aren’t ready yet.
Sometimes it can be the opposite. Perhaps the behaviour is there, but rules and regulations are preventing companies from building these types of services. That can make it a much slower process for some.

Sometimes the rule of law lags behind technology, making it difficult to innovate. How do you deal with that?

Robin Lantz: That is the case sometimes, but you need to be smart about it and always bear it in mind. I think the laws are starting to catch up a bit now, at least in the EU. For example, the Payment Services Directive (PSD) enables what we can work with and the experience we can provide.
Marcus Johansson: When we’re handling things related to credit, we need to tread very carefully. Of course, we always have to abide by the law, but it’s more about trying to work with it rather than against it. It’s about thinking, how does this affect the end-user experience? How can we still make the experience good yet secure so that the user is in control of their own data?

How do you see older and newer digital laws overlapping?

Marcus Johansson: Digital, in general, is becoming more sophisticated by extending our infrastructure and adding a lot more capability in terms of AI and so on. I think one day in the future, we’ll have chatbots to get legal advice from for your business. I think as popular opinion changes, this could naturally lead to changing rules and regulations that were previously set without the context of the modern world.
Robin Lantz: One aspect I think that’s very important for designers to consider is the user. The common, everyday users won’t necessarily know about the laws and things like PSD. I think it’s up to us to educate and help users learn in a digestible way.
Marcus Johansson: Just to add to that, one thing most of us can relate to is reading the end-user license agreement. How many of us actually do that? Wouldn’t it be more helpful for our users to explain this better? I think that’s just one example of the disconnect between the old and new worlds meeting each other.

What are the biggest opportunities and threats that might shape the future of fintech?

Marcus Johansson: I think in the next couple of years, we’ll see some amazing tech made available to all of us, particularly with AI. I also expect that the trend of shopping online will continue to grow.
Robin Lantz: I hope we will see fintech companies utilizing a sort of holistic approach to finances. For example, marrying online purchases with cash flow management, credit checks, and so on. I think that will make it a very good experience for users and will help them understand and manage finances better. I think that’s the next level of fintech.
Marcus Johansson: One risk is that when dealing with people’s money, fintech companies need users to trust them for them to exist at all. If a company were to screw up, I think it would hold the evolution back because people wouldn’t trust financial services for a while.

How has the designer position changed compared to the beginnings of your careers?

Robin Lantz: It’s changed a lot. Compared to when I first started out, the market has evolved into more event-based services. Companies started to understand the value of digitalizing their businesses and creating digital products, which increased the need for designers.
Marcus Johansson: Previously, you’d work purely as a designer. You might lean a little towards UX, but now you need to understand the full dimensions of the thing you’re working on - the business logic, the potential for revenue. I think it’s become a lot more complex to work as a system designer today.

Klarna’s teams operate in a system based on the Spotify model. What’s your take on this?

Marcus Johansson: I think what’s amazing about the model that Spotify proposed is that it’s really optimized for speed, and it enables teams to take ownership and responsibility of projects. That’s created some amazing results within Klarna.
There are also cons with the model as well, it can be a struggle to ensure the teams are collaborating with each other, but it’s still one of the most efficient models I’ve had the chance to work with.

What are the main factors driving innovation at Klarna?

Marcus Johansson: I think there are multiple things. It comes back to hiring the right people. We’re very picky at finding people who are suited for the roles in terms of personality and experience.
I also think that there’s been a culture in place from the start which encourages speed. We want to learn new insights as fast as possible; we don’t want to end up in analysis paralysis. There's no hidden design decision matrix in place. It's more about a belief in openness, transparency, and speed.

What are the challenges related to the recent push into live stream shopping?

Robin Lantz: I think that live streaming is super interesting, and we’re investigating how we can integrate that into our business. We have run a few live streaming events, and we’re on track to run some more. When it comes to the challenges, I think it’s about working out the Klarna way of doing it because we’re still in the early days.

What do you consider to be the biggest threat to Klarna? Being acquired by big banks, changes in law, or changes in financial habits?

Robin Lantz: The biggest threat I’d say is probably not something anyone’s thought about yet. It could be a pandemic, as we’ve seen the past year. It could be security breaches or the actions of other competing companies.
Marcus Johansson: We feel like we bring something unique to the market that’s different from big banks, so I don’t think that’s a big threat. I guess the scary part is the unknown, just as Robin said. But it feels like the majority of people now are so used to using digital services, and there are just so many interesting things happening in general.

This discussion is part of our Disruption Talks recordings, where we invite experts to share their insights on winning innovation strategies, the next generation of disruptors, and scaling digital products.
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