Understand the IP Gap
With a new competitive landscape driving a continuous flow of investments in IT hardware and software solutions, financial institutions have embraced a technological revolution which has increased their exposure to patents not only from competitors and new entrants, but primarily from other industries with a long tradition of utilizing patents as strategic assets.
In this new innovation driven environment, the business, activities, and services offered by financial institutions are exposed to patents owned by third parties, creating an IP gap which needs to be bridged to mitigate risks and secure freedom to operate in an increasingly technology convergent market.
It’s All About Technology
Financial institutions have morphed into technology companies and continuously invest unprecedented amounts in IT hardware and software to digitalize and differentiate their financial services and compete with new technology-based market entrants bringing new perspectives to traditional financial products and services.
Patents Matter
Technology companies have long used IP to define and control strategically important markets. Data indicates that most financial institutions have neglected to build sufficient patent portfolios, leaving them at a competitive disadvantage to peers with strategic IP portfolios, and to traditional technology companies that own a strong patent position in digital technologies relating to financial services.
Indemnification is Not Enough
Financial institutions that still rely on IP indemnification from IT and software providers are ill prepared to navigate the complexities of the IP landscape. Indemnities often do not cover combination patent claims (covering services or products deployed in combination with other components or as part of a system) and may fail to cover the large potential liability from an infringement claim covering millions of transactions.
The Time to Act is Now
IP litigation data indicates that financial institutions must act now and put meaningful protective measures in place to mitigate IP compliance and competitive risk before it is too late and IP risk management issues become crisis management issues at board level.
