Banks rush to protect op risk process

NEW YORK – Financial services firms are rushing to patent a wide range of business processes surrounding op risk, thanks both to the growth in the discipline and recent changes in US patent law. The controversial 'business process patents' often encompass not only technology and software, but also the implementation framework and methodology around it. Technology vendors, including individuals associated with Algorithmics, have also filed such applications.

The practice has met with a mixed reception. Some op risk managers note that if firms patent many of the implementation features surrounding Basel II – such as self-assessment or key risk indicator frameworks – financial institutions could wind up paying vast sums in licence fees to other banks or technology firms for basic 'best practice' techniques they require to run their business and be compliant with banking regulations.

One of the most aggressive firms is Citigroup, which holds more than