Banking on Innovation: Three ways the financial services industry’s investment in IP is fueling growth
While financial institutions have always been early adopters of technology, innovation plays a more critical role than ever in the evolution of financial services. For companies like BMO, which have prioritized technology innovation, we see intellectual property (IP) as essential to success.
Here are three ways IP can make a direct contribution across the financial enterprise:
1. Enhancing the client experience
Clients expect their live interactions with banks to mirror their online ones, where product recommendations and advice are customized. Legacy banking systems posed a challenge to delivering this experience, even for customers who have been doing business with BMO for decades.
A fundamental limitation of these systems was their inability to match customer identity across different lines of business or through life events.For example, the teenager that opened a savings account may have gotten married and changed her name when she took out her first mortgage. Additionally, parts of the bank’s business were historically kept separate by financial regulations – but can now be integrated.
BMO applied a probabilistic algorithm-based system that gives client-facing teams real-time, intelligent views of the client’s business across retail, investing, business banking and capital markets. This IP has also provided a platform for BMO to build new applications and services based on this integrated, real-time data view, which enables employees to provide customized advice and help.
2. Securing a competitive advantage
Traditionally, banks relied on trade secret rights or first-mover advantage methods to protect their innovations. Today, BMO is seeing competition from fintechs that have leveraged technologies like machine learning and big data analytics to create new business models and platforms in record time.
Technology innovation is a competitive advantage, and patents can protect that advantage. BMO works closely with IP lawyers to safeguard our IT and research teams’ good work — now and in the future.
BMO has filed more than 70 patent applications since 2018, resulting in 22 patents, including two for our flagship Digital Core technology platform, an intelligent, interconnected network that enables BMO’s IT infrastructure, including security, data mining and analytics and digital banking capabilities.
3. Creating new business opportunities
Artificial intelligence, machine learning and blockchain are increasingly vital technologies fueling the next wave of innovation in finance. The banking industry, for instance, dominates the list of top blockchain patent holders. One could say that patents are innovation’s Key Performance Indicator (KPI).
These business opportunities also help BMO attract and retain top tech talent. Patents help us foster employee engagement and empower and recognize our internal inventors. It’s a draw for the innovative minds BMO needs to continue growing.
The connection between IP investment and growth in financial services is clear. If there’s one thing the banks know, it’s currency – and IP and patents are emerging as the currency of innovation.