Major Banks Innovating to Increase Consumer Security

By Steve Brachmann
March 9, 2014

In recent years, the American banking system has gone through major upheaval, as have financial industries across the globe, in response to the 2008 global economic crisis. According to digital news outlet Quartz, the fallout to this crisis currently has resulted in more profits that are being enjoyed by fewer, larger banks. In fact, Quartz reports that American bank profits in 2013 neared $160 billion and beat the industry’s pre-crisis peak revenue of $145 billion.

However, a new paradigm in financial systems is shaping up across the globe thanks to the one technology that’s been changing our world in incredible ways for at least the past two decades: the Internet. Globally, banks are racing to develop Internet-based banking systems, turning the idea of online banking from a checking or credit account service into a completely digital system of payment processing.

We’re seeing a lot of interesting financial innovations, and today we want to feature some unique and groundbreaking inventions developed by a trio of major players in the American banking industry. Today, we’ve profiled an assortment of patent applications and issued patents coming out of the U.S. Patent and Trademark Office that are assigned to Citigroup Technology of New York, NY; The Bank of America Corporation of Charlotte, NC; and JPMorgan Chase Bank, also of New York, NY.

We’ve checked out a few inventions that show the desire of banking corporations to stem the recent tide of major identity theft scandals. Our featured application today takes a look at a new design for a magnetic stripe card reader that would have impeded the progress of criminals who recently stole personal financial information from millions of Target customers. Other patent applications we noticed include a system for identifying phishing websites that steal customer information across the World Wide Web, as well as a personal budgeting manager for financial accounts.

These three banking companies have also been receiving patents from the USPTO at a fair clip in recent days, although Bank of America and JPMorgan Chase are paced well ahead of Citigroup in this regard. We discuss a couple of new banking inventions that aim to take advantage of mobile networks and devices, including one patent protecting a system of providing offers to individuals from nearby businesses. Other patents include a system of collecting unused coinage for redistribution among banks and systems for funding an account collectively among many contributors.

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Card Reader Anti-Skimming Assembly and Method
U.S. Patent Application No. 20140048602

Magnetic stripe technology, first developed by IBM beginning in the 1960s, is used in conjunction with plastic cards and magnetic stripe readers for various security applications. Information relating to the cardholder is recorded directly on the magnetic stripe of a plastic card that is swiped through a magnetic stripe card reader. This information may relate to financial account information or security access, such as is the case of many hotels and other lodging establishments.

In recent months, major inadequacies regarding the security of these systems have been exploited by criminals in a very public way. Target and Neiman-Marcus are just two corporations who have had to notify millions of customers that card skimming technologies and undetected malware in the company’s computer system had stolen their information. One way that criminals can gather information is by placing a skimming read head overlay on a card reader. When a customer swipes a card through the reader, the skimming head reads the bank information and either stores it or sends it across a network.

This patent application, filed by Citigroup Technology of New York, NY, describes a new assembly for a card reader that would prevent skimming read heads from being able to record customer information. This design includes a displacement bar placed near the card read entry on a reader. One leg of the U-shaped displacement bar is directly adjacent to the path of the magnetic stripe entry within the card reader.

This displacement bar leg makes it impossible for criminals to mount a traditional skimming device onto a card reader. This bar ensures that the area around the card entry opening will remain free of any unauthorized devices that could gather information from customer bank cards. The alignment of the displacement bar’s leg ensures that the stripe aligns perfectly with the magnetic stripe reader. A version of this technology had already been patented by Citigroup Technology in January of this year, U.S. Patent No. 8622297, which has the same title as this patent application; both describe displacement bars connected to alarm circuits to protect against skimming.

Claim 22 (Claims 1 through 21) of this Citigroup patent application would protect:

“An anti-skimming assembly for a card reader device, comprising: a displacement bar mountable on a front plate of a card reader device proximate a card entry opening formed in the front plate, said displacement bar having at least one leg; at least one non-conductive frangible fastener connectible to the at least one leg of the displacement bar through a fastener opening formed in the front plate; first and second electrically conductive terminal connectors carried by said non-conductive frangible fastener electrically connectible to one another via an electrically conductive compression spring also carried by said non-conductive frangible fastener and coupleable to said alarm circuit.”

 

Other Patent Applications

We’ve noticed that a number of America’s largest banks are involved in developing new technologies to aid both individuals and organizations that do business within their financial systems. We were very intrigued by another innovation that promises to help consumers protect their personal financial data. U.S. Patent Application No. 20140041024, entitled Method and Apparatus for Baiting Phishing Websites, was filed by Bank of America to protect a method of finding criminals who operate websites for phishing, or stealing personal financial information, by entering fake customer information into data portals on these websites. The IP addresses of unauthorized logins can be tracked to determine a criminal’s location.

Banks have also been trying to address the problems that some customers have in meeting their bills or handling personal debt. For example, U.S. Patent Application No. 20140046816, titled Method and Systems for Managing Cardholder Spending, enables customers to set their own monthly budgeting parameters for groceries, utilities and other expenditures on financial accounts. This Citigroup Credit Services invention is designed to provide an individual in financial straits with the budgeting services of a financial manager without having to pay for a professional service.

U.S. Patent Application No. 20140012683, filed under the title Personalized Interactive Network for Debt Management, describes a novel system from JPMorgan Chase Bank that can better suggest high value services to bank customers while interacting with automated teller machines (ATM) and other digital financial services. Interestingly, the claims published in this application are all either drawn to “a computer-implemented method for personalizing interaction between a user and a provider,” or drawn to “a computer-based system for personalizing interaction between users and a provider in a multi-channel access provider system for accessing information of a plurality of products or services.” Indeed, these claims are structured in the same familiar way as the claims were in the Alice patents, which means depending upon the outcome of the Supreme Court review in Alice v. CLS Bank, none of these claims could wind up patentable. For more on this topic please articles tagged CLS Bank.

Internet-based methods for financial transactions, such as PayPal and Bitcoin, have become exceedingly popular for their ability to handle global transactions. JPMorgan Chase Bank has been working very diligently to break into this field with the filing of U.S. Patent Application No. 20130317984, which is titled Method and System for Processing Internet Payments Using the Electronic Funds Transfer Network. This patent application would protect a system of paying for transactions digitally across the Electronic Funds Transfer (EFT) network without requiring a customer to give financial identification information to a payee through a credit card or other means. Although CNN Money erroneously reported this system as patented in December 2013, a review of Public PAIR records shows that most recent action on this patent application was a final rejection issued on February 28, 2014.

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Issued Patents of Note

From U.S. Patent No. 8,622,296, which is titled “Magnetic Stripe Card Reader Assembly and Method.”

The financial world has shown us a tremendous degree of innovation whenever we’ve covered their inventions here at IPWatchdog. Various computer-implemented systems and software programs are typically featured in these issued patents coming out of the USPTO. These systems reflect the desire of banks to improve their ability to reach customers and enable financial services on-the-go.

Banks have been frantically trying to create new systems of preventing identity theft, as our featured patent application showed us earlier. U.S. Patent No. 8622296, which is titled Magnetic Stripe Card Reader Assembly and Method, is another Citigroup Technology patent aimed at constructing magnetic stripe card readers with more anti-skimming protections. The system protected by this patent is designed to prevent skimming devices from being installed on automated teller machines (ATMs).

Various patents issued by the USPTO to financial institutions protect new systems for providing services on mobile networks. The Bank of America Corporation has gained the right to protect a system of suggesting financial services to mobile device users with U.S. Patent No. 8660951, which is titled Presenting Offers on a Mobile Communication Device. This system can determine products that are located nearby an electronic device user by analyzing camera images taken by that device. U.S. Patent No. 8645222, titled System and Methods for Mobile Ordering and Payment, protects a JPMorgan Chase Bank system that can track consumer mobile transaction histories to enable quicker repeat transactions at a later date.

Some of these issued patents also protect interesting new financial products that are offered on digital financial networks, enabling more global economic connectivity. JPMorgan Chase was recently issued U.S. Patent No. 8620808, entitled System and Method for Funding a Collective Account. This patent protects methods that make it easier for multiple individuals and organizations to contribute funding to a single charitable or civic organization accounts. Finally, we were intrigued by the basic idea of U.S. Patent No. 8645231, entitled Private Sector Coin Consortium. The Bank of America earned the right to protect this system of recapturing unused coinage from commercial institutions and redistributing that coinage, which will help banks reduce the amount of coinage they must have on-hand at any time.

From U.S. Patent No. 8,645,231, entitled “Private Sector Coin Consortium.”

The Author

Steve Brachmann

Steve Brachmann is a freelance journalist located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He writes about technology and innovation. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients and is available for research projects and freelance work.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

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