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 is now becoming even more vital for industry participants as competitors leverage new technologies such as artificial intelligence, Internet of Things, cybersecurity, and embedded finance 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: EMV tokenization.
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
EMV tokenisation is a key innovation area in banking
EMV tokenisation is a security feature that is used to protect sensitive payment card data during digital transactions. It involves the use of a unique identifier or "token" to replace the actual card number, which helps to prevent fraud and unauthorised access to the cardholder's account.
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 EMV tokenisation.
Key players in EMV tokenisation – 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 EMV tokenisation
Source: GlobalData Patent Analytics
Mastercard is a key patent filer in the field of EMV tokenisation. The company has filed several patents related to the tokenisation of personally identifiable information, payment card storing tokenised information, and contactless payment technology with payment card network to open banking network conversion. It has also patented payment-system-based user authentication and information access system and methods, sending and receiving encrypted payment data messages for transfer of funds, security for online contactless transactions, and secure payment transactions. Some other key patent filers in the EMV tokenisation industry are Visa and Capital One Financial.
In terms of application diversity, Huawei Investment & Holding leads the pack. Sony and Microsoft stood in the second and third positions respectively. By means of geographic reach, Licentia Group holds the top position followed by Black Gold Coin and Gelliner.
To further understand the key themes and technologies disrupting the banking industry, access GlobalData’s latest thematic research report on Banking.