A blueprint for a fairer financial future: A call for transparent, consumer-centric policies in 2025
Companies like Klarna are transforming the financial landscape, bringing consumers more transparency and choice through technology. Klarna is eager to continue to work with leaders in Washington in 2025 to expand these innovations and deliver real benefits to consumers while growing the American economy.
By Klarna
December 5, 2024
Fintechs like Klarna have become a driving force in the economy, helping both consumers and small businesses alike. Whether someone is looking for the best price for a product, interest-free payment options or a small business owner is seeking flexible payment products to offer thier customers, Klarna is leading the charge.
As leaders in Washington start to formulate their policy priorities, supporting innovation and increasing transparency and consumer empowerment should be a top priority.
Fintech’s role in building a stronger economy
Over the last several years, fintech has proven to be a game-changer for consumers and businesses alike. By delivering transparent, user-friendly financial solutions, fintech companies like Klarna are filling critical gaps left by legacy banks, whose business models are built on charging hidden fees and complex terms that consumers need a law degree or an MBA to fully understand.
As Washington sets its 2025 agenda, policymakers must avoid applying outdated, one-size-fits-all regulations to fintech products. Innovations like Buy Now, Pay Later (BNPL) have transformed finance, offering transparency and flexibility that traditional banking often lacks. Imposing credit card rules on BNPL overlooks key differences, potentially creating confusion that ultimately harms consumers.
Proportionate, product-specific regulations—like clear repayment terms—offer consumers protection without adding unnecessary complexity. Policymakers should adopt tailored regulations that enable fintechs to keep delivering transparency, accessibility and security. By resisting blanket rules and instead embracing these targeted, product-specific approaches, Washington can help fintechs continue to meet Americans’ needs without stifling the innovation that makes these products so valuable.
Rethinking credit reporting
One area ripe for change that should be prioritized by Washington is credit reporting. Credit reporting is severely lacking in innovation and transparency, while also often inaccurately assessing the credit worthiness of many consumers. It is a system that should open financial doors but too often leaves people shut out. The current credit reporting model leaves consumers largely in the dark about how their scores are calculated. This opacity leads to unfair lending practices and blocked opportunities.
A 2012 study found that 26 percent of consumers from a nationally representative study found at least one potentially material error in their reports. Out of those consumers, about five percent of consumers found errors that, if corrected, would have shifted their scores into a higher credit score tier, likely resulting in lower interest rates on an auto loan. These discrepancies unfairly leave consumers at a disadvantage in their financial lives.
Updating outdated systems is essential. The current format used in credit reporting is complex and discourages fintech companies from sharing valuable data, which would reflect on-time payments and responsible short-term credit use. Simplifying this format would allow “credit invisible” consumers—often younger or nontraditional borrowers—to build credit and unlock more financial opportunities.
Key reforms for fairness include banning credit checks for employment to prevent bias against low-income workers and simplifying the dispute process so consumers can easily correct errors. Embracing open banking and real-time data could further improve credit accuracy and provide a clearer picture of financial behavior.
It’s time to overhaul the system with transparency and consumer control at its core. With these reforms, we can ensure credit reporting works for all Americans, fostering a fairer, more inclusive economy where everyone has the opportunity to succeed.
Preparing for the future: AI for all
AI is transforming the business world, but without thoughtful policy, its benefits risk being concentrated among a privileged few. At Klarna, we believe AI policies should promote accessibility and equip all Americans to thrive in a tech-driven economy.
One way forward is to encourage businesses to provide employees with tools and opportunities to learn and experiment with AI. At Klarna, this commitment has been integral to our work with OpenAI. From the outset, we provided all employees access to ChatGPT and offered office hours with engineers and AI architects. This initiative has led communications professionals to learn coding, enabled analysts to streamline projects and powered our customer service chatbot, which has led to faster inquiry resolution and improved accuracy for consumers.
But, consumers should have a legal right to understand whether they are interacting with a real human or AI. Policymakers should explore how to ensure AI is being deployed in an ethical and transparent way. Supporting society through these transitions ensures a smooth adaptation to new technologies, fostering sustainable growth for both businesses and the economy. This approach builds an inclusive financial ecosystem powered by responsible AI.
Partnership to empower consumers
To build systems that genuinely serve Americans, Washington’s 2025 agenda must champion policies prioritizing transparency, consumer choice and modern financial access.
Key reforms—like updating credit reporting, tailoring fintech regulations and providing transparency in an AI-driven economy—will create lasting opportunities, empower consumers and encourage innovation.
Klarna stands ready to partner with policymakers in achieving these goals, bringing insights from our experience providing transparent, user-friendly financial tools to millions of Americans. By embracing thoughtful, forward-looking policies that reflect the unique benefits of fintech, Washington can strengthen our economy, foster innovation and build a fairer financial future for all.
Learn more about our policy priorities: Fintech’s Role in a Stronger Economy, Credit Reporting Reform and Transparent AI.
The content is paid for and supplied by advertiser. The Washington Post was not involved in the creation of this content.
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