Patent trolls - Barclays acts

Barclays has become the first major European bank to join the LOT Network and Open Invention Network Community to oppose the abuse of intellectual property rights by patent trolls.

Patent trolls are organizations that derive revenue primarily by threatening to sue unless companies pay to license their patents. The are also known as Patent Assertion Entities.

More often than not the most flimsy claims are usually settled because of the excess time, resources and expenses that are required for a successful litigation.

By joining the non-profit LOT Network and open-source-based OIN Community, Barclays is adding its portfolio of patents to the millions of patents that are already hosted.

LOT Network financial members from outside of the EU include JPMorgan Chase, Alibaba, Citi, Vanguard, Visa, American Express, Wells Fargo, Union Pay, and Fidelity

In a statement Barclays, said: “Spurious claims from Patent Assertion Entities divert resources and investment away from true innovation and collaboration. We also recognize that a modern approach to technology development and innovation requires a level playing field around use of open source software. With membership of LOT and OIN, we are pleased to contribute to and extend the growing global community working together to reduce the PAE threat and lower barriers to use of open source technologies.”

 

Citi loses legal battle to recover mistaken payments

The recipients of about $500m that US banking giant Citigroup wired erroneously will get to keep the money. So ruled US judge Jesse Furman.

Judge Jesse Furman said that Citi was not entitled to recover its funds, even though they were "indisputably transferred by mistake".

The bank was supposed to have sent interest payments on behalf of its client, Revlon, but instead fully repaid the cosmetic company's loans. 

Citi has said that it would appeal the decision. "We believe we are entitled to the funds and will continue to pursue a complete recovery of them," a spokeswoman for the bank said.

Citi, which was acting as an administrator for Revlon's 2016 loans, was supposed to send $7.8m in interest payments on behalf of the firm. Last August however, it wired nearly $900m to the firm's lenders - paying off its debts.

Citi recognized its the mistake, and managed to recover some of the money. However 10 firms, including Brigade Capital Management and Allstate Investment, refused to return the funds, prompting Citi to sue.

Judge Furman said he was bound by New York law, which has previously found that funds received to repay a debt do not need to be returned, if "they discharge a valid debt, the recipient made no misrepresentations to induce the payment, and the recipient did not have notice of the mistake".

"The non-returning lenders believed, and were justified in believing, that the payments were intentional," Judge Furman wrote.

"To believe otherwise - to believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1bn - would have been borderline irrational."

How Will Payments Acceleration Affect The Payments Industry

A recorded Webinar from the Payments Journal; "How digital acceleration will affect the payments industry?" The Webinar includes guest speakers from Mercator, Capgemini and HPS

“Must Reads” for 17 February

Today’s “Must reads” in banking, fintech, payments, cybersecurity, AI, IoT and risk management include:

• Biden administration brings expertise, new attitude to cybersecurity
• 6 AI Myths Debunked
• AI and IoT – 5 use cases where it's gathering pace - TechHQ
• Digitalisation, COVID-19 and the future of banking
• What is Fintech? Guide to Financial Technology
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• Apps new ‘battleground’ for banks

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• Filling the AI skills gap - ‘If we sit back and do nothing, we will fail’
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It's not the technology - Why banking is broken -Ewan Silver - 11:FS

When people discuss 'banking being broken', they often refer to the technology itself. As Ewan Silver says - that isn't necessarily the case. 

The fundamental flaw within banking at the moment is the way that banking products are treated within the organization. A customer can get a retail bank account, a credit card, and a mortgage from one bank. 

They would expect this to be a seamless process, as it looks like one entity - but from the bank's perspective, these are three different businesses entirely. 

The banks have no single-view of a customer. This was OK for a while. All banks worked in this way, so there wasn't exactly a high bar set for them, 

But now, with challenger banks offering realtime payments and notifications, and GDPR regulations enforcing banks to enforce KYC across entire organisations, the banks NEED a single customer view. 

And they can't seem to get there easily. So what are the potential solutions? Ewan explains it all.

“Must Reads” for 15 February

Today’s “Must reads” in banking, fintech, payments, cybersecurity, AI, IoT and risk management include:

• Mobile banking: a catalyst for economic transformation
• The Unbanked in Africa Could Be One of the Biggest Opportunities in Fintech History
• Here’s where AI will advance in 2021
• AIoT: When Artificial Intelligence Meets the Internet of Things
• Why Branch Banking is Dying in America
• Fintech's Market Favorability Likely To Continue Throughout 2021
• How IoT and smart city technology works: Devices, applications and examples
• Data Drought Slows Advance of AI in Cybersecurity