OP Financial Group and its innovation unit OP Lab break down the myth that patenting can’t be used to protect innovative financial services. Results are achieved when innovation and awareness of IPR are embedded in the organisation’s DNA and strategy. OP Lab mobilises new technologies such as artificial intelligence, blockchains and biometrics to serve the financial sector, while patent partner Kolster helps refine inventions into new business opportunities.
OP Financial Group is Finland's leading financial group and the largest employer in the industry – but did you know that OP is also one of the country's largest tech developer firms? OP has become a software house that currently employs a few thousand R&D and technology professionals. OP Lab, the Group’s innovation unit based in Helsinki and Oulu, has been involved in developing services for OP Financial Group’s more than four million customers utilising the latest technologies and by cooperating with universities and startups around the world.
At the core of innovation are new digital services and improved customer experience. Digitalisation is transforming services in areas from banking, asset management, insurance and healthcare to payments, security and overall service solutions. OP Lab develops OP Financial Group’s technological capabilities and future financial services in many areas.
“Every year, we have internally evaluated thousands of new ideas from our employees, and externally from interesting international startup companies and potential partnerships. We have also carried out dozens of special and startup pilot projects and technology trials that clarify the direction of our product development. As a result of these, we have developed numerous new service products every year, including also patent-protected technology innovations,” says Kaj Häggman, Head of IPR and Innovation at OP Financial Group.
“We raise the bar – IPR issues are important in the world of finance”
OP Financial Group has been a pioneer in the financial sector in developing new digital services and digital service design – and intends to continue in the pole position in the future as well. In Finland, OP has been listed among the five largest technology investors for several years.
“We were the first European bank to develop an online bank in 1996 and have also pioneered mobile banking services. One of the services we take pride is the Pivo mobile wallet app, which in 2014 became one of the world’s first banking products to win the Red Dot Design Award. In 2019, OP Lab was the first in Europe to launch a payment service based on facial recognition, Face Payment by Pivo”, Häggman says, listing important successes.
Over the past few years, OP Lab has focused on exploring what artificial intelligence will mean for the future of the financial sector.
“We are working towards ensuring that OP Financial Group has a good grasp of the possibilities presented by new technologies and tools that allow us to make the right decisions. We are looking for the next big thing set to have an impact on the financial sector.”
In line with its strategy, OP Financial Group wants to make its development work productive. In this goal, intellectual property rights are one of the key tools. In the financial sector, the brand, trademarks and domain names have traditionally been the primary form of IP protection for services. Now, OP wants to also use patents to their full potential.
“We have identified patents as an area in which we want to put more emphasis. At the very least, we want to explore all its possibilities, including from the point of view of technology licencing and the sale of IP rights.”
In recent years, OP Financial Group has made significant investments in its innovation and IPR processes and practices and on the creation of an IPR strategy to make innovations productive.
“We have set out to systematically raise our level of expertise and awareness of intellectual property rights throughout OP Financial Group. All our IPR processes and are now in order, and we have trained employees in identifying inventions that benefit from protection,” says Häggman.
“Collaboration and sparring that refine inventions”
Employee inventions are much more frequent now that IP rights and innovation have been planted into the company’s DNA and mindset thanks to clear practices. To accelerate internal innovation, an internal innovation competition and innovation platform Hoksaamo has been created, where each employee can present their own ideas related to any business or service.
"If you think about the financial sector, OP Financial Group's both internal and external innovation activities are at the top level in Europe in many respects."
When inventions are created, their protection possibilities are assessed together with patent partner Kolster. Kolster's European Patent Attorney has become OP Lab’s go-to expert on fintech and software industry patents. The collaboration began in 2012 with the patenting of the mobile payment application Pivo and has evolved over the years into a partnership that refines inventions.
“Instead of individual assignments, the partnership involves a deeper cooperation and sparring in which Kolster refines inventions into patents that help serve our business,” says Häggman.
“At its best, successful cooperation means that the patent attorney can identify new innovations based on what you’re saying.”
“Patent attorney knows what questions to ask”
The patenting potential of new inventions is typically assessed in “discussion sessions” involving inventors, Head of IPR and Innovation Kaj Häggman and Kolster’s patent attorney.
“By asking the right questions, the patent attorney is able to explore an invention from new perspectives and refine it into a format that produces a patent with the widest possible scope of protection,” says Häggman.
OP Financial Group’s home markets are in Finland and the Baltic countries. However, patent protection is often considered from the point of view of the main global markets for the ICT and financial sector, in other words the United States.
“Whenever we develop great new ideas or technologies that can be thought of as global, we expand the protection to also cover the US. OP may not always be the best operator to be introducing a new technology on the market or running a business related to this technology innovation, but protection allows the innovation to be licenced or sold. Good opportunities should not be missed.”
In the financial sector, innovations are often related to software or business methods and therefore challenging in terms of patent protection: does the invention solve a technical problem? An additional challenge is the different patentability criteria in Europe and the United States.
“It is significant that the patent attorney has broad experience on what kinds of innovations are patentable in Europe or the US in the first place.”
“Agile methods as in startups”
Many of OP Financial Group’s patent-protected innovations relate to the use of AI, blockchains and biometrics to produce a better customer experience. In addition to protection, an important aspect is IP risk management and own freedom to operate. This requires good knowledge of the industry’s patent landscape and monitoring of the competition.
“We want to ensure that we do not infringe the IP rights of others in the markets in which we operate. At the same time, we try to predict the direction of technological development. Patents are an important source of information that help us understand the future,” Häggman says.
According to Häggman, there is still much to innovate in the financial sector in the utilisation of platform economies, data and cloud services, for example. OP Lab closely follows international startup firms working on the latest technological trends and is constantly on the lookout for the best startups to invest in or invite as technology and pilot partners from Finland, the Silicon Valley and worldwide. Innovation is global, and exciting new partners are also found in Asia, where payment trends are ahead of Europe and the US.
“When a new technology is introduced anywhere in the world, we look at how it could be applied in the financial sector. Cooperation with startups has been an important part of OP Lab’s innovation work, technological trials and pilot projects.”
OP Lab has sought out partners especially from established startups that have the most suitable solutions to the challenges that have already been identified within OP Financial Group. This way, the technologies developed by startups can be used as a platform for building the Group’s own services.
“Ideally, cooperating with startups speeds up value creation, saves both parties’ time and resources and, through pilot projects, leads to a commercialised solution.”
“Inspiration from bold innovation and the platform economy”
OP Lab has also realised that not everything needs to be done yourself, and the same model is also applied more widely in OP Financial Group. The platform economy is changing business models and ways of thinking, and new services can be operated from outside the Group or the financial sector as customers can be served smoothly through partners. Combining the capabilities of several organisations also speeds up development.
“For example, the OP Light Entrepreneurship service for freelancers was originally developed by a third party. What started out as a small experimental service has quickly grown to become a successful product under the OP brand.”
OP Lab also wants to speak out for bold innovation. In addition to the platform economy, product developers are inspired by the encouraging idea of “take every risk you can recover from”.
“If you always colour inside the lines, you won’t innovate anything new. A pioneer in the field must go over the lines to an area where there are also risks. The ability to recover from risks means that you retain the means to get back to where you started without losing reputation or customers,” Häggman explains.
Through agile and bold innovation, OP Lab is spurring the financial sector on towards an increasingly digital future. Häggman says that through long-term and systematic efforts, OP Financial Group has reached a good level of maturity and expertise in its IP activities, with several new patent applications pending. The expertise of the patent partner plays an important role in ensuring that future inventions can reach their full potential.
“We have received plenty of new ideas what more could be built around our innovations.”