Financial Industry Business Ontology

The Financial Industry Business Ontology (FIBO) is an open-source, business conceptual model of how financial INSTRUMENTS, business entities and processes work across the global financial industry. It was developed as a collaborative initiative by the members of the Enterprise Data Management Council to standardize the terms, conditions and characteristics of reference data stored in the master files of financial institutions, vendors, regulators and others involved in the financial information chain of supply. FIBO is expressed in the Web Ontology Language (OWL) standard for machine readable inference processing as well as in glossaries, UML diagrams and spreadsheets for evaluation by financial professionals.

By taking advantage of the RDF/OWL Web standard, FIBO uses machine intelligence and network graph capabilities to express, classify and link data. In the financial industry, precision of meaning matters. There are hundreds of unique data attributes delivered by scores of internal and external sources and stored in thousands of unconnected databases. Because of this, the financial industry is forced to grapple with the problem of common terms that have different meaning, common meaning that use different terms and vague definitions that don’t capture critical nuances. This results in a continual process of mapping and confusion over meaning. Inconsistent nomenclature makes it difficult to compare data and even harder to unravel complex financial processes.

Language of contracts

FIBO is a formal model of the legal structures, rights and obligations contained in the contracts and agreements that form the foundation of the financial industry. Business experts have been working collaboratively to unravel issuance documents, standardize the legal language of business relationships, express the time dimensions of market data and capture the legal obligations of corporate actions. This contractual certainty at the heart of FIBO is used to promote trust and minimize the need for costly reconciliation of data. Think of FIBO as a “Rosetta stone” to help financial professionals, regulators and market authorities create and explore connections and relationships between instruments, business entities and counterparties to determine expected cash flow, unravel risk and identify transitive relationships. Precise meaning translates into a common language between systems and sources, reduces the cost of doing business and promotes confidence in data among business users.

FIBO applications

The financial system is a massive global network of interdependent entities, instruments, transactions and processes. Individual firms manage risk and support operations in this environment by pulling data from vertically aligned systems that are linked to consuming applications and from independently managed data repositories that are compounded by inconsistent data meaning. FIBO standardizes data to its precise legal meaning for:

• Data Harmonization: The contractual certainty of FIBO replaces the ad hoc, spreadsheet-driven reconciliation processes that exist within many organizations and promotes confidence in data among business users.

• Standardize Data Integration: The alignment of content to its explicit meaning makes it easier to automatically process and integrate data from federated sources. FIBO reduces errors of interpretation, fosters reusability and facilitates response to changing conditions at lower cost.

• Flexible Analysis: FIBO supports the identification of complex relationships for assessing counterparty risk, classifying financial instrument types, flagging structural errors and calculating expected cash flow.

• Blockchain: FIBO creates a digital signature to ensure structural integrity of the data flowing across networks and allows users to take advantage of smart contract capabilities.

• Machine Learning: FIBO ontologies are used as inputs into machine learning models and can be coupled with algorithms to enhance learning and for data discovery across federated data repositories.

FIBO and web standards

FIBO is expressed in the triplestore language of the World Wide Web for machine readable inference processing. A triplestore is a method of organizing data into groups of three that contain subjects and objects linked together by predicates. Triplestore processing was developed by the US Department of Defense to allow the military to share data across federated systems and respond quickly to [...] events. It is very expressive and linguistically aligned with how people think and speak - but expressed in a way that machines can process based on mathematical formulas and description logic.

See also

• Enterprise Modeling
• Knowledge representation and reasoning
• Ontology (information science)
• Resource Description Framework
• Schema.org
• Semantic Reasoner
• Semantic Web
• Web Ontology Language

External links

• Financial Industry Business Ontology; access to the FIBO standard and its management
• Enterprise Data Management Council; originator and steward of the FIBO specifications
• Object Management Group; technical standards governance body
• Schema.org/FIBO; markup for banks and financial institutions