The banking industry continues to be a hotbed of patent innovation. Activity is driven by digitalization, enhanced security, operational efficiency, ever changing consumer expectations, and growing importance of technologies such as artificial intelligence (AI), Internet of Things (IoT), and cyber security. In the last three years alone, there have been over 129,000 patents filed and granted in the banking industry, according to GlobalData’s report on Artificial intelligence in banking: algorithmic trading. Buy the report here.
According to GlobalData’s Technology Foresights, which uses over 165,000 patents to analyze innovation intensity for the banking industry, there are 30+ innovation areas that will shape the future of the industry.
Algorithmic trading is a key innovation area in artificial intelligence
Algorithmic trading refers to the use of computer algorithms to analyze and execute trades in financial markets. These algorithms are designed to make trades based on predefined rules and criteria, allowing for faster and more efficient trading than traditional manual methods.
GlobalData’s analysis also uncovers the companies at the forefront of each innovation area and assesses the potential reach and impact of their patenting activity across different applications and geographies. According to GlobalData, there are 50+ companies, spanning technology vendors, established banking companies, and up-and-coming start-ups engaged in the development and application of algorithmic trading.
Key players in algorithmic trading – a disruptive innovation in the banking industry
‘Application diversity’ measures the number of applications identified for each patent. It broadly splits companies into either ‘niche’ or ‘diversified’ innovators.
‘Geographic reach’ refers to the number of countries each patent is registered in. It reflects the breadth of geographic application intended, ranging from ‘global’ to ‘local’.
Patent volumes related to algorithmic trading
Source: GlobalData Patent Analytics
State Farm Mutual Automobile Insurance is one of the top patent filers in technologies associated with algorithmic trading. One of the patents filed by the company is related to a business impact assessment engine that uses heuristic algorithms to analyze unstructured data sets representing the current business context and predict the future business action based on the patterns and correlations observed in past data transactions. Enlitic, PayPal, Capital One, and Visa are some of the other leading patent filers in this space.
In terms of application diversity, Enlitic held the top position, while LG and LendingPoint stood in second and third positions, respectively. By means of geographic reach, Enlitic leads the pack, followed by State Farm Mutual Automobile Insurance and Alibaba.
To further understand the key themes and technologies disrupting the banking industry, access GlobalData’s latest thematic research report on Artificial Intelligence (AI) in Banking.