The banking and payments industry continues to be a hotbed of innovation owing to ever changing consumer expectations. The rapid technological developments in the areas of banking and payments that aim to offer seamless experience to consumers are now becoming even more vital for industry participants as competitors leverage new technologies such as artificial intelligence, Internet of Things, cybersecurity, and embedded finance as they compete to stay relevant and grow in the market. In the last three years alone, there have been over 92,000 patents filed and granted in the banking industry, according to GlobalData’s report on Innovation in Banking: automated clearing houses. 

However, not all innovations are equal and nor do they follow a constant upward trend. Instead, their evolution takes the form of an S-shaped curve that reflects their typical lifecycle from early emergence to accelerating adoption, before finally stabilising and reaching maturity. 

Identifying where a particular innovation is on this journey, especially those that are in the emerging and accelerating stages, is essential for understanding their current level of adoption and the likely future trajectory and impact they will have. 

60+ innovations will shape the banking industry 

According to GlobalData’s Technology Foresights, which plots the S-curve for the banking industry using innovation intensity models built on over 195,000 patents, there are 60+ innovation areas that will shape the future of the industry. 

Within the emerging innovation stage, transaction-enabling smart contracts is a disruptive technology that is in the early stage of application and should be tracked closely. Distributed ledger network, BNPL payment protocols, and virtual banking assistant are some of the accelerating innovation areas, where adoption has been steadily increasing. Among maturing innovation areas are IM trading platforms and in-app payments, which are now well established in the industry. 

Innovation S-curve for the banking industry 

Automated clearing houses is a key innovation area in banking 

The Automated Clearing House (ACH) is an electronic mechanism that allows users to make fund transfers electronically. Using the ACH network, the funds are directly transferred online from one bank account to another. 

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 30+ companies, spanning technology vendors, established banking companies, and up-and-coming start-ups engaged in the development and application of automated clearing houses. 

Key players in automated clearing houses – a disruptive innovation in the banking industry  

 ‘Application diversity’ measures the number of different applications identified for each relevant patent and broadly splits companies into either ‘niche’ or ‘diversified’ innovators. 

‘Geographic reach’ refers to the number of different countries each relevant patent is registered in and reflects the breadth of geographic application intended, ranging from ‘global’ to ‘local’. 

Patent volumes related to automated clearing houses

Company Total patents (2010 - 2021) Premium intelligence on the world's largest companies
Mastercard 149 Unlock company profile
Alibaba Group Holding 75 Unlock company profile
Bank of America 48 Unlock company profile
Visa 38 Unlock company profile
Capital One Financial 25 Unlock company profile
Early Warning Services 23 Unlock company profile
PayPal Holdings 19 Unlock company profile
Royal Bank of Canada 16 Unlock company profile
Block 15 Unlock company profile
Intuit 15 Unlock company profile
Xero 15 Unlock company profile
Citigroup 15 Unlock company profile
Fidelity National Information Services 12 Unlock company profile
Goldman Sachs Group 9 Unlock company profile
Wells Fargo 9 Unlock company profile
JPMorgan Chase 9 Unlock company profile
Ping An Insurance (Group) Company of China 9 Unlock company profile
American Express 9 Unlock company profile
Alphabet 9 Unlock company profile
Fiserv 9 Unlock company profile
CME Group 8 Unlock company profile
TBCASoft 8 Unlock company profile
Pelion 7 Unlock company profile
China UnionPay 7 Unlock company profile
Mshift 7 Unlock company profile
Baton Systems 7 Unlock company profile
Tencent Holdings 6 Unlock company profile
Capital Intellect 6 Unlock company profile
Cfph 6 Unlock company profile
Plaid Enterprises 5 Unlock company profile
Toronto-Dominion Bank 5 Unlock company profile
Clearing House Payments 5 Unlock company profile
U.S. Bancorp 5 Unlock company profile

Source: GlobalData Patent Analytics

Mastercard is one of the leading companies in the area of automated clearing system. ACH transfers are of two types, namely ACH credit and ACH debit, which allow both individuals and businesses to make low-cost fund transfers. Payments for utility bills, subscriptions, loans, and insurance premium are mainly made via ACH transfer. Some other key players in this space include Alibaba Group, Bank of America, Visa, Capital One Financial, and Early Warning Services.  

In terms of application diversity, Cfph leads the pack. The Toronto-Dominion Bank and Tencent Holdings stood in the second and third positions, respectively. By means of geographic reach, Cfph holds the top position, followed by Xero and Alphabet. 

To further understand the key themes and technologies disrupting the banking industry, access GlobalData’s latest thematic research report on Banking

GlobalData, the leading provider of industry intelligence, provided the underlying data, research, and analysis used to produce this article.

GlobalData’s Patent Analytics tracks patent filings and grants from official offices around the world. Textual analysis and official patent classifications are used to group patents into key thematic areas and link them to specific companies across the world’s largest industries.