Pressure on financial innovation shown by drop in patent applications
Innovation in financial services is currently at a seven-year low, reflecting a period of cost-cutting and scaling back in the face of new financial regulation – but technologies such as mobile may stimulate new growth, according to UK law firm RPC.
The RPC figures analysis is based on the numbers of applications for patents related to the financial services industry: worldwide there were 3,576 applications for financial services patents in 2012, representing a 20% decline from the peak of 4,482 reached in 2009. The numbers show a 4% decline from 2011.
“Innovation in financial services seems to have been a victim of the cost-cutting that financial services firms have been forced to undergo in recent years,” said David Cran, partner at RPC. “The growing importance of new financial services technologies such as mobile banking and E-money could be vital in driving a resurgence of innovation in the sector.”
The most active financial institutions over the last five years in terms of number of patents were South Korea’s Shinhan Bank, Bank of America, JP Morgan Chase and insurance specialist The Hartford Group. In 2012, large numbers of applications were submitted by Industrial Bank of Korea and American Express.
“A notable development in recent times has been the growth in financial services patent applications from Silicon Valley and other technology companies, rather than just financial services institutions,” said Cran. “Technology and financial services are becoming ever more closely integrated, and this is reflected in the changing landscape of financial services patent applications.”