Bank of America has continued its relentless pursuit of technology patents amid the upheaval caused by the pandemic.
The company got 184 patent applications approved by the U.S. Patent and Trademark Office in the first half of 2020 — a 20% increase over the same period last year — though 85% of its employees have been working from home. It applied for 415 patents during that time, covering money transfer, bill payments, ATM transaction pre-staging, use of augmented reality for check verification, and authentication technology that doesn't require a card or even a device.
All told, Bank of America has applied for or been granted 4,277 patents.
“These numbers demonstrate our unmatched commitment to innovation,” Cathy Bessant, Bank of America’s chief operations and technology officer, said in a press release. “Simply put, it is part of everyone’s job who works here.”
It’s a curious thing to boast about. Patents are as controversial as they are feel-good. Companies get patents to protect their ideas and their intellectual property, but building a stockpile of patents across a spectrum of financial services areas could feel like an effort to block others from innovating, and attempts to enforce those patents can be perceived as patent trolling.
It could be an effort to shield itself from fintech competitors. Owning a portfolio of related patents could guard Bank of America from infringement by fintechs.
John Cotter, a partner at K&L Gates in Boston who was not speaking to Bank of America's patents but has been involved in a lot of patent litigation tied to the financial services industry, said banks have every right to pursue patents but that those patents may be challenged in court.
“The traditional approach is to get patents to give you protection against competitors,” he said. "It may also be that you have a great technology lead and you want to get patent coverage to keep others out of that market. That's totally fair. That's what patenting is about: exclusivity. In a vacuum, that may seem anti-competitive, but it is a constitutional right that has existed for several hundred years to encourage innovation. Getting good patents is a reasonable strategy for most companies in any industry.”
Defending those patents can get tricky.
“Every patent issued is very specific and presumed valid, but there's absolutely no doubt about it that mistakes get made, some patents may get through that may not be found valid in the long run, when they're subjected to litigation either in court or in the patent office’s appeal board,” Cotter said. “It can be an imperfect system, and there's a lot of expense and time spent trying to deal with those imperfections.”
Katherine Dintenfass, senior vice president of digital banking and the second-leading patent holder at Bank of America, said its patent work is customer-driven. “We hear feedback from our customers day in and day out on what could be better,” she said.
One idea came when she was working on estate planning services with customers.
“As you can imagine, it is such an emotional time in their lives, but also can be very financially challenging,” Dintenfass said. “They needed a lot of handholding because of how stressed they were throughout the process.”
Customers said they wanted to make it easier to pass things on to their loved ones. So Dintenfass helped create an augmented-reality-image validation system.
“Then it's not as charged a conversation,” she said. “It's very basic. ‘Hey, I know you love this painting. Let's talk about how I would give that to you later on.’”
The estate planner can show the heir the item in question, and the heir can superimpose it on a wall to see if it’s something he or she has space for or wants.
“That allows us to support the level of conversation that we want to have between our specialists and our clients as if they were in the same physical space, but without the requirement to actually be in the same physical space,” Dintenfass said. “Using augmented reality, we can have a much richer experience, without the logistical challenges associated with being in the same physical location.”
Dintenfass has worked on several patents with Cameron Wadley, chief operating officer for technologies with which consumers, small-business owners and wealth management clients interact. One they obtained this year is called “System for Predictive Usage of Resources.” It’s partially used today as part of the virtual assistant Erica’s “Forecast my Balance” capability. It predicts future balances based on historical spending patterns and makes educated budget recommendations.
Several fintechs already predict future balances based on historical patterns. Simple was one of the first in 2012. What’s different in this patent, according to Bank of America, is that the logic in the patent encompasses confirmed upcoming bill payments, seasonal payments based on transaction history, anticipated discretionary spending based on cash-flow patterns, and savings and investments earmarked for prioritized life events.
“Predictive spending isn’t new, but the level of personalized insights to support overall financial wellness is,” a company spokesman said.
Another invention Dintenfass and Wadley collaborated on and patented is “Person-to-Person Network Architecture for Secure Authorization and Approval.” This allows for resource transfers between two people via authenticated network session.
Many of the patented inventions have been incorporated into Erica, Wadley said.
How do they decide when something is patentable versus something that everyone's trying to do?
Dintenfass said the litmus test is whether it’s something customers want and need.
“Sometimes we do that through just looking at the data: What is their behavior telling us?” she said. “But a lot of times it's dovetailing that with some of the meaningful conversations that we have with them, and by getting into their spaces, their everyday lives, seeing how they use the technology using design-thinking processes.”
Dintenfass and Wadley rely on the company's lawyers to ensure no one else is already doing the same thing.
“They will help us better determine whether there is prior art involved, whether there's risk of infringing on someone else,” Wadley said. “And in those cases, of course, we're going to be responsible and steer clear.”
The two say they have no interest in patent trolling.
“We're not patenting for patents’ sake,” Dintenfass said. “We really are trying to make sure that we're grounded in what the customer needs and wants are, and then trying to find innovative ways to solve those. And when they are innovative, we want to patent it so that we have that protection as we bring some of these capabilities forward. But we are not going to just go ahead and patent something because we want to take a stance of blocking someone else or saying, this is a space that we want to mine for licensing.”
“The reason we would be protective of the patents that we've secured is really to make sure that we don't disrupt the experiences that we've looked to create for our client base,” Wadley said. “But we're not really in it to maximize patents. We really just want to continue to reduce friction, make things easier for our clients and preserve a continuity of experience for them. And that's the reason that patenting our ideas is important and the way that we think about the process.
Dintenfass has always been inquisitive. When she was a child, she tried to take apart the family television because she wanted to see what was in the box.
“That's what I love doing,” she said. “I love understanding what is in people’s mindsets, what drives people’s behavior. How do they articulate those solutions that they may not know that they want today, but will really help them in the future?”
Wadley said an interest in problem solving led him to engineering as an undergraduate discipline, then into information technology and his first full-time job in financial services.
“I stood out as someone who was proficient in solving technology problems, but I could also speak kitchen English,” he said. “So in certain respects I was bilingual, and I could explain complicated concepts to people who didn't have that familiarity.
Wadley and Dintenfass have had to collaborate virtually since the pandemic started.
They say there are no special tools that have helped.
“We are largely using capabilities that a lot of other organizations are using,” Wadley said. “We're jumping on Skype, we're having phone calls, we're sending emails. What's most important is that we are accessible and that we're in a position to be able to compare notes on, Hey, I had this idea, do you think that has merit? Or what if we were to look at it from a different perspective to identify a different use case? Despite the fact that Katherine and I are in different states and both working from our living room, it hasn't changed the thought process or the way that we would reach out to each other to help solve problems.”
Both juggle child care duties with working from home.
Dintenfass and her spouse have a toddler. “I think he may have inherited my inquisitive spirit,” she said. “He tried to take apart one of our old telephones the other day.”
