Financial Technology is an emerging industry that utilizes technology for improving activities in finance. In recent years, Fintech innovation has done major growth due to addressing the needs of financial institutions that modernize payment services and improving the experience of the customer in the digital age. The Fintech landscape is emerging with new services, business models, and providers, but when the industry matures then the providers require dealing with attention from the regulators, a wave of mergers and consolidations, and a slow-down or dropping in valuation.
Global research based on blockchain and FinTech has resulted in a sudden increase in the number of patents filed in this space. FinTech Patent Attorneys thoroughly draft patent applications claiming software innovations and mobile applications after reviewing patent eligibility based on recent case laws.
FinTech patents claim innovative technologies utilizing digital platforms for delivering financial products and services that are executed through efficient business models. FinTech patents are filed in business sectors including payments, banking, wealth management, insurance, capital markets, and lending. FinTech patents used to generate revenue by selling the patent technology to interested companies. In recent years, there are increasing numbers of fintech patents that have been filed by financial institutions to protect things such as software, hardware, and branding. These providers focused and adopted varied strategies.
When we talk about fintech patent race, Bank of America is the winner in terms of the number of patents. Over a decade the bank has been building its portfolio. According to Keith Agisim, chief counsel for Bank of America,” Bank have partnered with technology companies for a long time.” There are some technology companies, which are better equipped and they have a better ability to innovate and that are the type of partner Keith company’ wants.
In the year 2016, Jack Ma founded Alibaba and he coined the phrase TechFin. Ma Yun told South China Conference in Hong Kong that FinTech takes the original financial system and improves its technology. The other way to think about is that where financial institutions and FinTech startups seek to improve or upend the existing financial system in FinTech, technical companies approach this issue from a different and more consumer and technology-centric perspective in TechFin.
It is instructive to compare the rise of American tech giants to those from China, to better understand their difference in origins and approaches. China’s tech giants are commonly known as the BATs: Baidu, Alibaba, and Tencent. In the United States, a commonly known acronym is GAFAs: Google, Apple, Facebook, and Amazon.
During the dotcom boom and web 2.0, today’s Silicon Valley tech giants grew mainly using advertising or “eyeball” models that relied on generating more viewers. Example of these includes search engines like Google and social media portals like Facebook. Apple was then primarily a hardware manufacturer, and e-commerce pioneers like marketplace platform eBay, which acquired PayPal in 2002 to power its transactions. Online bookseller Amazon does the majority of its transactions through credit cards.
In contrast, in China, where credit card penetration remained low, the tech giants incorporated transactions into their platforms from the very beginning, Hangzhou based Alibaba started as a business-to-business or B2B platform, with the introduction of online retailer Taobao, it extended its sister company’s payment system, now known as Alipay, to consumer transactions. Instead of Amazon’s money-back guarantee, Alibaba provides comfort convenience to its retail consumers by keeping their payments of goods in a deposit account released until receipt and goods approved by the customer. Yu’eBao or “leftover treasure” was born when Alibaba started offering interest to customers who kept their funds in this account at rates higher than bank deposits.
The Wall Street Journal reported that in just four years, Yu’eBao had accrued 370 million account holders and 211 billion dollars in US assets to be twice the size of the next largest money market fund JP Morgan Asset Management. Shenzhen-based online gaming Tencent is built-in micropayments early because its freemium business model based on gamers making in-game payments for its free-to-play games, to buy say, awesome virtual swords.
When the company transitioned into mobile and introduced instant messaging through QQ for youth and then WeChat, they captured an amazing user base of nearly one billion active users who learned to transact online inventions like hongbao where users can give and receive traditional red packets for mere cents. WeChat now also allows users to use and transact via third party mini-apps, including financial ones, without even exiting the instant messaging ecosystem to open new apps.
Tencent had launchedChina’s first online bankWeBank, using sophisticated credit analysis based on WeChat social media usage and online purchase patterns that are also offered to service traditional lenders. QR codes have been changing China into a cashless society. It built into WeChat and many other apps. China’s smartphone users can use scannable codes for facilitating offline-to-online. It connects with others to replace the business card as well to make payments.
