Sweden’s Financial Supervisory Authority (FI) has imposed a Skr500 million ($50 million) fine on Klarna for deficiencies in its anti-money laundering (AML) practices during the period April 2021 to March 2022.
Key Findings of the Investigation
The FI investigation highlighted several regulatory breaches, including:
- Deficient General Risk Assessments: Klarna failed to adequately evaluate how its products and services could be misused for money laundering or terrorist financing.
- Lack of Customer Due Diligence Guidelines: Klarna’s policies did not address all scenarios where due diligence measures were required, particularly for customers using its invoice product.
Daniel Barr, FI’s Director General, emphasized the importance of compliance:
“The anti-money laundering regulations must be followed. Our investigation shows that Klarna has not adhered to critical requirements, warranting regulatory intervention.”
Scale of Intervention and Industry Context
While the violations were serious, FI determined that the deficiencies did not justify an official warning or the revocation of Klarna’s banking license. However, the fine underscores the regulator’s commitment to AML compliance.
Sweden’s largest banks have faced similar scrutiny in recent years, with SEB, the country’s oldest lender, penalized Skr4 billion for money laundering compliance failures.
Klarna Responds
Klarna acknowledged the findings but pointed out that FI did not uncover any cases of its services being used by money-laundering entities. A spokesperson stated:
“We have maintained constructive dialogue throughout this process, which is part of our commitment to a robust and secure financial environment.”
Klarna also highlighted that it was the largest Swedish bank, aside from state-owned SBAB, to avoid investigation until now.
Implications for Klarna and the Industry
The fine serves as a warning to the broader financial services sector about the importance of maintaining rigorous AML protocols. With BNPL services growing rapidly, regulatory compliance remains critical to ensuring trust and security in the industry.