The aim of this work is to give an overview of the recent changes involving IP strategies related to banks and Fintech companies and to suggest some possible future scenarios.

Traditionally banks, i.e. financial institutions whose main function is to offer loans, deposits and payment services, have been characterized by a static business model (based mainly on trade- secrets and first-mover advantages). A radical change, however, has characterized the recent years as financial institutions started breaking from traditional patterns in order to seek patent protection. This change can be related to two main reasons. First of all, a change in the case law (i.e. State Street Bank case) represents a pivotal point in the US.  This decision held that anything that provide a “…useful, concrete and tangible result can be patented”. Therefore, businesses processes can be considered patentable, under particular conditions. Another important reason related to this new strategy is the increase in the use of technology by financial institutions. The patent portfolio was mainly created as a defensive measure, in particular in order to protect themselves from infringement suits.  Currently, patents tend to be used not only to protect valuable innovations, but also to capture the value of their investments. The rise of the fintech movement can be considered as one of the reasons for this new approach to IP strategy.

As aforementioned, nowadays Fintech movement plays a crucial part in the financial arena. In particular, it can be considered peculiar as it not only has characteristics that can be found in other movements of disruptive innovation, but also has features that are specific to the financial industry. The main characteristics, however, can be related to the focus on the customer, to the ability to forecast the evolution of the industry and the coexistence with the existing regulations. Blockchain technology, in particular, represents an important part in the Fintech scenario. The most relevant investment in this technology are located in the Asia-Pacific and Americas regions. In terms of functionality, moreover, digital payments represent the largest market for Fintech, accounting for more than 80% of the global tech income.

A recent survey, in particular, analysed the strategies related to the blockchain technology. This strategies are the blocking strategy, the defensive strategy and the leveraging strategy. The study reveals, first of all, that companies tend to use all the above mentioned strategies. Moreover, the precise choice of the strategy is related to the size of the company. For instance, large financial institutions tend to use all three types of strategy but defensive and leveraging strategies play a crucial part. On the other hand, small companies are mainly using the blocking and the leveraging strategy.

The main difficulty of the following years will be related to the coexistence of banks and Fintech companies. Within a decade, probably, non-bank channels will dominate revenue and the importance of the so called “Super Apps” will increase.

This research project was conducted by MIPLM graduate Elisa Buoso and supervised by Prof. Dr. Alexander Wurzer and Dr. Thibaud Lelong both CEIPI.

Elisa is a lawyer with a strong background in the IP field. Her first experience in the IP has been at the Court of Milan as a trainee. After that she attended a postgraduate course (LL.M.). She currently assists clients from all over Europe as she is fluent in English, German and Spanish.

Here is a presentation of the research project: