Battle for IP ownership challenges fintech collaboration

Battle for IP ownership challenges fintech collaboration

Banks and asset managers are being hampered in their efforts to work with fintech firms by the desire to own intellectual property (IP), according to research from law firm Simmons & Simmons.

Of 200 senior FS firm execs around the world surveyed, 53% say there is an institutional desire to own the IP when working with fintech firms.

Angus McLean, head, fintech, Simmons & Simmons, says: "It is the financial institutions that are pragmatic about IP ownership that will reap rewards.

"Banks and asset managers need to ask themselves: what’s our motivation for partnering? There are different cases for acquiring the IP outright versus taking a licence and there are certainly ways you can maximise the value of that licence."

Meanwhile, 71% of respondents report that cybersecurity is the most significant risk associated with partnering with fintech firms.

And while around a third expect to acquire a fintech firm within the next 18 months, of the remaining two-thirds, 45% cite concerns about regulatory risk as a key deterrent.

More than half of respondents are building in-house capabilities - with disruption at the door, incumbents accept the need to partner and move faster, but say they are poorly equipped to do so.

Says McLean: "Despite the huge focus on innovation in the sector over the last few years, there is no doubt that many financial institutions have struggled to move fast enough. We are now at a critical time for the industry, as we begin to see which strategies are paying off and which are failing."

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