Interview: David Larsson, CEO at Sileon

Operating within the thriving Buy Now, Pay Later (BNPL) segment, FinTech Connect interviewed David Larsson, CEO of Sileon to dive deeper into the Sileon business model and why this area of the market is booming. David explains what both banks and lenders need to keep in mind when buying into a BNPL platform, the biggest challenge banks faced in 2022 and the impact BNPL has had on the payments sector.

Please give us a little introduction on your current role and what you do.

I’m the CEO at Sileon, a fast-growing international fintech company operating in the prospering Buy Now, Pay Later (BNPL) segment. We offer SaaS-based BNPL functionalities to banks, lenders, and fintechs.

Since joining Sileon in 2017, I’ve had two roles: CCO and CEO. My role signifies managing Sileon’s overall operations and setting the company’s future strategy, including growing our pipeline of large customers.

During my time at Sileon, the company has seen significant transformational growth, leading up to the strategic launch of our BNPL platform at the beginning of 2023. In addition to the platform, which operates as the core backbone of running BNPL, we will also launch solution modules this year. This will allow even more flexibility in creating a personalized and flexible BNPL offering.

What is the top payment trend you are predicting for 2023? Where should banks and financial institutions be focusing their efforts in the next few years?

The growth of BNPL (Buy Now Pay Later) continues to represent one of the top payment trends, and it’s a trend we believe is here to stay. BNPL has surged significantly during the last couple of years and is present-day the fastest-growing payment method, forecasting an estimated transaction value of $680 billion globally by 2025.

The shift towards digitalized shopping experiences has caused a disrupting state of the traditionally focused consumer loan and credit card industry. Consumers are now demanding digital and seamless credit solutions. For a bank or financial institution wanting to keep up with consumer expectations, BNPL is without question where they should be focusing their efforts.

How has the surge of BNPL affected the payments sector?

We see that the surge of BNPL has ultimately caused credit card usage to decrease, mainly in developed countries. This applies especially to the younger generation, who finds the credit card’s onboarding process and usage complicated.

Nor are credit cards the most suitable option when it comes to e-commerce. The fact that you have to apply for credit in advance is another critical factor in why consumers are shifting from credit card use to BNPL. In turn, it greatly impacts retail banks who find themselves competing against BNPL providers to gain a new market but also defending their existing market of credit cards.

The payment industry has come a long way in the last 3 years - how have you adapted your business to keep up with the demands and new challenges of your clients?

In parallel with the changing financial landscape, Sileon has transformed its business from payments to fintech. Instead of providing our customers with payment solutions, our focus now lies on developing cutting-edge technology for payments on a global scale, thus enabling banks, lenders, and fintechs to go fast to market with a technology- and payment-agnostic BNPL product.

With the increased demand for a modern and scalable BNPL offering, we have also expanded our business from mainly focusing on the Nordic region to enterprises worldwide. As of recently, we just signed the Hungarian-based fintech company Paysome as our first international client since our transformation from payments to fintech.

What has been the biggest challenge for banks in 2022, and how can they prepare for 2023?

One of the biggest challenges for banks has been their complex legacy tech infrastructure, which limits their ability to adapt to new digitalization trends. They struggle to keep up with the technology and lose market shares to BNPL companies as a result. As consumer demand for easily accessible credit purchases continues to increase, banks must start to meet but also exceed their customer expectations.

But it’s not easy for banks to launch digitally driven BNPL services independently. Teaming up with a BNPL functionality provider, like Sileon, can give them the flexibility to launch their own BNPL offering while keeping their brand and user interference intact. Data, customer relations, and credit control would, of course, remain within their territory.

What should banks and lenders keep in mind when buying into a BNPL platform?

There are several key factors to consider when buying into a BNPL platform. The first and foremost one is to choose the right BNPL functionality provider. Consider vital aspects such as scalability, flexibility, integration and complexity, time to market, support, and commitment.

A BNPL platform must cater to an evolving demand and make it possible for banks to move swiftly into new markets and customer segments. Sileon’s API-based SaaS product makes this happen within weeks, thus allowing banks and financial institutions to compete in the growing international BNPL market with their own personalized offering without compromising security and risk.