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'Fintech patent’ applications jump sharply - as innovation in financial services continues

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'Fintech patent’ applications jump sharply - as innovation in financial services continues

'Fintech patent’ applications jump sharply - as innovation in financial services continues

  • Number of financial technology patents filed up 49% in five years and 6% in a year

The number of ‘fintech patents’ filed worldwide is continuing to rise sharply, reaching 9,545 in 2016*, up 6% from 9,045 filed the year before in 2015 and up 49% from 6,399 filed five years ago in 2011 says EMW, the commercial law firm.

EMW says that the rise comes as both start-up and traditional financial services companies battle for competitive edge, locked in an ‘arms race’ to ensure that they do not lose out to one another when it comes to the latest disruptive technology.

Specific examples of technology patented including:

  • Artificial intelligence- enabled methods for highlighting risks in real-time, with suspicious or abnormal activities picked up using predictive models;
  • New tools for providing crypto or other digital currency (e.g. bitcoin) related services, including bitcoin trading platforms and bitcoin storage services;
  • New methods for managing e-money and digital wallets

Felix Dodd, Solicitor at EMW, comments “Technology is revolutionising the services that financial services businesses provide to consumers, as well as serving a vital cost-cutting function.”

“The surge in patents reflects both the proliferation of start-ups bringing new technology and products to market over the last few years, as well as investment by more traditional financial services firms in an effort to remain relevant and retain market share.”

“We are seeing a change in the way consumers access services across the board- including banking, investment management, insurance and financial advice.”

“Online-only and app-based banking is growing in popularity, with more and more banks cutting down on or foregoing physical branches entirely- such as Atom, Fidor and Monzo.”

“Offering services digitally allows banks to cut costs, but also to tailor services more easily to individual customer needs. More and more consumers are becoming comfortable with this kind of banking and bespoke products are a powerful customer attraction.”

“Robo-advice meanwhile is continuing to revolutionise the investment management industry. Systems are increasingly sophisticated, employing complex algorithms to monitor stocks and match investments with customers’ individual preferences and attitude to risk.”

“Nutmeg, Scalable Capital and Wealthify are some of the more well-known, with new entrants to the market all the time.”

“Even insurers, which have typically been slower to innovate, are also now taking steps to develop and integrate new systems and technology into the risk assessment underwriting processes.”

“A number of major insurers have been investing in insurtech. App-based insurance cover, Back-me-up, was recently launched by Ageas, for instance.”

“The regulatory backdrop is now more conducive to change. Governments and regulators are also making more effort to support innovation in financial services. Here in the UK the FCA’s Regulatory sandbox and Project Innovate has been helping new fintech businesses to prepare for and secure initial authorisation.”

“We expect the number of patents to continue to rise, with levels of innovation showing no signs of slowing.”

*Patents relating to banking, exchanges, investment, insurance, payment architecture and calculation of taxation, filed with the World Intellectual Property Organisation