It has been found that Shinhan Bank, BC Card, Samsung Securities and Samsung Fire & Marine Insurance have the highest financial patent competitiveness in Korea.
This is a result of a survey on patent application status in each financial category over the last 21 years conducted for the first time in Korea by Electronic Times and a patent information search and analysis specialist WIPS.
The financial patent competitiveness survey targeted patents applied for between January 1, 1994 and December 31, 2014 and it was conducted according to Financial Supervisory Service’s financial statistical information system classification. In Korea, surveys on patent competitiveness of manufacturing and IT industries have been conducted in the past. However, this is the first survey on financial patents. It is evaluated as a yardstick with which to predict the current status and future competitive power of each financial company in terms of their patent application performance.
As a result of the survey, Shinhan Bank was found to have the highest patent competitiveness in the bank category and also in the overall financial sector with 1,144 patents (including overseas patents). In addition, BC Card, Samsung Securities and Samsung Fire & Marine Insurance took the first place in credit card, securities and insurance categories with 182, 113 and 26 patents respectively.
On the other hand, the lowest ranking companies were found to be Kwangju Bank and Jeju Bank (1 patent each), Lotte Card (1), NH Investment & Securities, KB Investment & Securities and IBK Investment & Securities (1 each) and Kyobo Life Insurance, The-K Non-life Insurance and Mirae Asset Life Insurance (1 each) in bank, credit card, securities and insurance categories respectively.
The performance of patent application by industrial category has been forming a downward curve year after year. While dinosaur enterprises abroad are placing a great amount of investment and efforts in securing patents for FinTech business, Korea’s financial companies are found to have been reducing patent application and infrastructure investment on the contrary.
As an example, over the last ten years, the number of patent applications of banks dropped drastically to one tenth that in the past. Although patent competitiveness cannot be judged through quantitative comparison only, banks in Korea have been found not to make any investment or response for patents in the rapidly changing smart financial environment at all. As security regulations are strengthening, banks are concentrating more on risk management than securing patents, according to an analysis. In fact, the number of patents applied for by banks last year was nine, which plummeted by more than 13 times in comparison to the same period of the previous year. The situation is the same for credit card, securities and insurance companies.
Under the circumstances, some forecast that Korea’s traditional financial companies will face the risk of becoming a new prey for patent trolls (non-practicing entities, NPE). The importance of patents amplifies as communications service providers and information technology (IT) companies are entering payment and settlement fields, which are a preserve of financial institutes, and thus pulling down of boundaries began full scale.
Patent experts point out that plans to secure ‘financial patent competitiveness’ must be established urgently through private – government cooperation. “The global smart finance market has already started preparing for patent war in readiness against FinTech business,” said an overseas patent attorney. He warned, “Korea’s financial institutes must also set up safety devices, such as by securing patents, urgently.”