Nottingham Business School Creates Fintech Patent Index; as it reveals America’s leading fintech innovation
A new Nottingham Business School (NBS) study reveals that the US is a leader in fintech innovation when it comes to the quality and quantity of patent applications. The news comes alongside the creation of a new index to help companies measure the quality of fintech patents – to make decisions about investments involving intellectual property (IP).
Research led by the new Center for Finance, Technology and Society on Nottingham Trent University‘s Nottingham Business School (NBS), used key indicators to assess more than 16,000 patents in the fintech field registered over 20 years.
The study mapped three focus areas for patterns of registration and protection of intellectual property rights:
- Distribution of fintech patent quality based on different jurisdictions
- Distribution of patent quality in relation to specific technical fields (IPC)
- Whether there is a relationship between the average fintech patent quality of firms and their earnings
The US leads the way
The NBS findings highlight that the USA is the leading jurisdiction for both the number of registered patents and patent quality. The country accounted for 39.5 percent of the sample, followed by China (15.5 percent), Korea (12.2 percent), Japan (7.8 percent) and Europe (7.1 percent).
The study also found a significant increase in the frequency and quality of patents registered in the US between 2016 and 2020. It also saw a significant increase in the number of claims in the likes of South Korea, showing the growth of the region’s fintech sector.
The NBS research assessed several key categories:
- e-commerce or e-commerce
- Verify the identity or authority of a user of the system
- Identification of payer or payee
- Payment protocols
- Electronic wallets
While the US had the most patents in the categories, Europe and Japan had the least number. The US led in all categories – except electronic wallets. In this category, there was no noticeable difference between jurisdictions.
A new fintech patent index
NBS has created a new one Fintech Patent Quality Index (FPQI) to support the development and deployment of new financial technologies.
Furthermore, FPQI can also potentially be used to guide assessments of the quality and value of an organization’s IP assets and potential in a merger or acquisition situation. The index can also be used to identify high-quality patents that may be targeted for alliances, acquisitions or investments.
The creation of the FPQI will also enable policy makers and regulators to better understand their jurisdiction’s status in fintech patenting.
Dr. Milad Dehghaniprincipal researcher and senior researcher at Center for Finance, Technology and Society at NBS, commented on the creation of the FPQI. Dr Dehghani said: “Patents in the fintech sector are being granted at an accelerating pace; however, due to the early stage of technology advancement in some fintech fields, patents may be linked to frivolous claims and capital raising rather than legitimate technical or business purposes.
“So, as the fintech sector develops, the valuation of organizations with fintech activities and IP strategies is likely to become more critical. Organizations and investors will demand practical approaches to valuing IP and commercial portfolios.
“Having up-to-date insights on high-quality patents, as enabled by FPQI, therefore represents a significant informational and strategic resource for organizations and managers. It gives them insight into potential organizations to approach, either in a partnership or user capacity.”
