To see how America's biggest banks have been thinking about how to invest and innovate through artificial intelligence, take a look at the patents they've filed over the years.
Big banks are accelerating the pace of patent filings related to AI and AI-related innovations, according to new data from consulting firm Evident. According to Evident, there were 854 new patent applications filed in the year ending June 2022, an increase of 21% compared to the same period last year.
Alexandra Mousavizadeh, founder and CEO of Evident, said banks are looking to “ring-fence,” or protect, intellectual property from competitors to ensure technological advancements stay in-house. It is said that patents are often used. Patents are also a money-making opportunity, as banks trade and license the patents to other companies, he said, and can increase the sale price in the event of a merger or acquisition. There are also knock-on effects, such as a strong patent culture helping banks stand out in the war for talent.
“For an AI researcher, it's great to be able to work on something that's really important to banks and get a patent on it, because you get your name on it and you have a reputation for it,” Mousavizadeh told Business. told Insider.
Although these are not the only indicators of research intensity, the increase in AI-related patents in banks indicates strong interest in the technology, before advances in generative AI and the introduction of ChatGPT led to increased attention to the field. I am.
Among the big banks, Capital One and Bank of America lead the way, according to Evident data. This patent data, taken from Google's patent database, records his 12-month period ending in June 2022. According to Evident, this is the most recent data as patent applications are typically published only 18 months after they are first filed.
Capital One (300 applications) and Bank of America (272 applications) accounted for 66% of all patents filed by the 50 banks tracked by Evident in the 12 months ending June 2022. I was there. JPMorgan Chase Leads Evident AI Research The index is followed by 120 AI and AI-related patent applications.
Of course, patents do not fully represent a company's technological goals. Not all banks have patent strategies. According to Mousavizadeh, this is an expensive endeavor due to the associated legal and research costs, and research shows that patents typically take six to eight years to show a return on investment. Masu. Additionally, not all patent applications will be granted.
Trading and user experience lead AI patents
According to the data, when it comes to how these patents are actually being utilized, trading and user experience are the top two areas for banks. In terms of user experience, many of these patents relate to AI chatbots and their capabilities, such as Bank of America's Erica and Capital One's Eno. In trading, AI-related patents are all about gaining an advantage in speed and complexity.
“When you trade, you're trying to pull in a huge amount of information to give yourself an edge in making the right trade based on as much information as possible in a short period of time,” Mousavizadeh said. Stated. These patents aim to “summarize the complexity of making the right decisions regarding transactions,” she added.
Mousavizadeh said another area where there is a lot of IP within banks is compliance, from fraud detection to complying with data regulations. Some banks are using AI to train chatbots on compliance rules to help employees learn more As a check, they are allowing users to ask questions regarding AI regulations.