Klarna under fire by Swedish watchdog for bank secrecy breach

It is reported that Finansinspektionen, the Swedish financial watchdog, is investigating Klarna over a potential violation of banking secrecy laws as a result of an IT incident that occurred at the company in May.

During a 30-minute period on the 27th of May, Klarna customers were shown the data of other Klarna users – a digital mishap that the firm called a mistake, saying it was the result of “human error.”

There was an IT incident in May, in which the bank’s customers were able to access information about each other for a short period of time, which prompted a watchdog to investigate whether Klarna had violated bank secrecy.

“Bank customers must know that their information is kept confidential, and banks have a major task in always protecting the privacy of their customers.”

As a spokesperson for Klarna, a spokesperson said, “The investigation was very much anticipated as part of our regular dialog with the Swedish FSA, and as always, we have approached this matter in a transparent and cooperative manner.” According to Klarna, the information accidentally disclosed to other users did not include the credit card numbers of customers.

According to the regulator, the security issue around Klarna will be part of a broader survey announced back in March that will focus on a variety of issues. As a result of that survey, Klarna will be able to analyze how they deal with information and cyber-security risks as a whole.

According to Erik Thedéen, the director general of Finansinpektionen, Klarna will face the watchdog’s second-highest level of scrutiny when it comes to the potential for the company to become the next Wirecard. During an interview with the Swedish newspaper Dagens Industri, Thedéen made the comment regarding the collapse of German payment processing giant Wirecard, which had been involved in a multibillion-dollar scandal.

“The company is now classified as a Category 2 company, so it will undergo more stress tests and we will certainly take this particular question into account prior to making any final decisions, as we will need to find out if this level of risk is compatible with the demands placed on this bank, according to Thedéen, who was quoted in Dagens Industri.

A venture capital round of $639 million was recently closed by Klarna, bringing its valuation to a total of $45.6 billion, and paving the way for its global expansion plans.

The financial watchdog Finansinspektionen is investigating payments firm Klarna over a potential breach of banking secrecy laws in connection with an IT incident at the firm in May.

The regulator said it would investigate whether Klarna had violated bank secrecy in connection with a computer mishap in May when customers could access information about each other for a limited period of time.

“Customers must know that their information is secure and banks have a major task in always protecting the privacy of their customers.” A spokesperson for Klarna said the probe was expected as part of the Swedish FSA’s regular dialogues with the company and it is also a major task for all banks. No customer data was part of the information mistakenly shown to other users.

If the new rules are enforced, it will affect all banks and payment processors.

The Klarna Risk Assessment Survey is a tool for understanding the types of cyber threats Klarna encounters as well as the risk that the company is exposed to.

In a week where Germany’s Wirecard collapsed after admitting to a multi-billion-dollar money laundering scandal, General Director of Finansinpektionen Erik Thedéen says there’s a risk of Klarna becoming the next Wirecard, if it doesn’t undergo a second stress test.

Klarna, a Swedish financial services provider that provides easy-to-use online payment options for small businesses, raised $639m in its latest funding round from American private equity firm General Catalyst.

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