Banks Outpace Technology Companies with FinTech Patents

Bloomberg reported last week that there has been increasing overlap in patented technologies between the banking industry and traditional technology companies in recent years. Even with the recent uncertainty regarding business methods patents in the wake of the Supreme Court’s Alice Corp. decision, and with the increasing vulnerability of software and methods patents before the PTAB, companies are still filing for – and receiving – patents covering various financial transaction methods.

Envision IP compared the US patent filing and issuance trends of major financial services companies (Bank of America, JPMorgan Chase, Goldman Sachs, Citigroup, Morgan Stanley, and Wells Fargo) and credit card companies (Visa, American Express, and Mastercard) with traditional technology companies (Apple, Sony, IBM, Microsoft, Google, and Facebook).

As a whole, the banks we reviewed collectively own 2,485 US patents. In addition, Visa, Amex, and Mastercard own 1,839 US patents.

Regarding the technology companies we reviewed, IBM is by far the largest holder of finance/payment related US patents with 839. Second is Microsoft with 296, followed by Sony (234) and Google (157). Apple is a relatively small holder of such patents, with 70, and Facebook owns 16 patents in the finance/payment space.

Looking at general trends, the banks we reviewed increased patent grants on a yearly basis from 1995 to 2013, peaking at 470 in 2013. There has been a downtrend since then, with 303 patents granted in 2015. To date in 2016 there have been 6 patents granted to these companies.

Banking Patent Trends Envision IP

There is not a general upward trend among technology companies with respect to financial/payment related patents. From 1996 to 2009, technology companies actually outpaced these banks in yearly patent grants. However, since 2010, that trend reversed with banks outpacing technology companies in patent grants.

The technology companies we reviewed received only 125 patents in this area in 2015.

The decline for both banks and technology companies in receiving finance-related patents may be a result of the Supreme Court’s Alice Corp. v. CLS Bank decision in mid-2014, which held that a business method for a particular financial processing patent was not eligible for patent protection.

With respect to patent application filings over the last decade for these types of patents, there has been a steep increase by banks, with filings peaking at 958 in 2013. Similar filings for technology companies has remained relatively flat, surprisingly, with 129 filings in 2006, and 154 in 2014.


Bank of America is the largest patent holder with 1,133 among that banks we reviewed, followed by American Express with 832 patent. Looking at application filing trends, Bank of America filed over 2,000 patent applications since 2006. Similarly, Amex filed close to 1,000 applications during the same period.

Interestingly, while Mastercard owns only 325 US patents, it has filed 766 patent applications in the last decade, almost double that of Visa, which owns close to 700 patents. The patent data suggests Mastercard may be placing a higher emphasis on innovation and patent protection, and may be trying to increase its patent portfolio.

Similarly, while Facebook owns only a handful of finance-related patents, it has filed 38 patent applications in this space over the last decade.

In addition to the above companies, Amazon, Ebay, Paypal, Alibaba, and Square, technology companies which have pioneered technologies for online and mobile commerce for the masses, also have a large number of patents in this space. Amazon owns 791 US patents, and Ebay owns 573 US patents, directly related to online payments and transaction processing. PayPal, which spun off as a separate company from Ebay in 2015, owns almost 700 US patents. Interestingly, 143 of these patents were acquired from IBM.

Alibaba owns only 39 US patents related to online payments and commerce, however, the company has much larger patent portfolios overseas in Asia with patents related to electronic payment proceesing. The company has also been growing its patent portfolio via acquisitions since its IPO. Square owns over 100 US patents related to mobile payment processing.

The majority of the patents/applications owned by the technology companies in this space relate to mobile (near-field and wireless payments) and electronic payments (online payment processing, e-commerce and shopping technologies), consumer-facing financial data processing (budgeting, tracking, data analytics apps, etc.), and enterprise-level data analytics related to finance.

The bank patents/applications cover similar areas, but also include security/encryption technologies, transaction network hardware and processing software, user interfaces for both front and back office banking operations (i.e., analytics, loan processing, retail banking, etc.).

In summary, the patent data suggests that banks are dominating the patent landscape with regards to financial technologies. Traditional technology companies are innovating in the space, but certainly not at the same rate as banks. I would not be surprised if we see increasing tie-ups/joint-ventures and/or licensing deals between technology companies who want to commercialize finance-related products, and banks who seem to own the bulk of the patents in this space.