Financial Industry Business Ontology (FIBO)

Financial institutions around the world struggle to establish a common vocabulary that describes the structure and contractual obligations for financial instruments, legal entities and financial processes. The EDM council has developed the Financial Industry Business Ontology (FIBO); a framework that provides a consistent vocabulary, which organizations use to harmonize their data across repositories to support risk analysis and business process automation.

The FIBO vocabulary has been validated by financial industry subject matter experts. It provides the financial services industry with a shared meaning about financial instruments and processes for the alignment of internal repositories and to support both regulatory and business reporting.

The need for a common vocabulary

Data precision and harmonization have been identified as imperatives for financial industry regulators and market advisors where legislation requires data from diverse sources to be aggregated and links and relationships created in order to understand and map relationships, effectively manage process flows and perform scenario-driven risk analysis.

To comply with these regulations and solve information problems, financial organizations must have the tools and technology that allow them to:

• Identify data columns with the same meaning and link them together for reporting and analysis.
• Identify data with different meaning and map it accordingly.
• Easily describe and organize data so that users can find what they need when they need it.
• Consistently and reliably extract entities, facts and relationships from their unstructured information and use it for information discovery.

Semaphore, Smartlogic’s semantic platform, lets financial organizations precisely and consistently identify and tag all of their information assets so they can effectively manage information, comply with governmental regulation and implement information governance best practices that provide consistency and transparency for their data.

Why traditional methods fail

In a world where organizations have more information than they can easily manage, the ability to keep up and comply with an ever-changing regulatory landscape is difficult. The inability to identify, categorize and manage unstructured information within the enterprise is more than an influx of data, organizations also suffer from:

• Unstructured information is opaque – without a common vocabulary, financial organizations cannot determine the context and meaning within a document and information cannot be shared with governmental agencies and partners.
• Business intelligence efforts are hindered – consistent meaning allows disparate sources to be brought together to form a 360 view of customers, investments, processes and instruments.
• Information discovery is slow and painful – the ability to examine all information and look for patterns and trends cannot occur without precise and consistent metadata.

Many organizations are attempting to solve these problems with traditional ETL and data warehouse solutions unfortunately these solutions lack the flexibility to manage, tag and unify unstructured information in a way that supports current compliance mandates:

• Traditional extract, transform and load (ETL) processes are brittle and time consuming to implement. When changes are made in upstream systems without consideration or planning, results are incomplete, inaccurate and generally break downstream applications. Not to mention the fact that these type of systems are not set up to address unstructured information.
• Data warehouses & data marts, like traditional systems are designed for known problems and not well suited for information discovery. They are expensive to build and maintain and the semantics are predefined and rigid.

Semaphore and the FIBO vocabulary – the premier solution

Semaphore, Smartlogic’s semantic platform, helps organizations take the FIBO vocabulary and put it work within the enterprise.

With Semaphore:

• The FIBO vocabulary can be used in Semaphore Ontology Editor as a starting point and built out to incorporate the unique aspects of each organization. Our easy to use, web-based user interface lets subject matter experts and information scientists quickly and collaboratively build a taxonomy/ontology that best reflects your organization.
• The FIBO vocabulary can be exposed to applications across the enterprise and used to improve the quality of data and metadata across work groups, departments and sections in a consistent manner:
• Data lakes become useful - endow data lakes with consistent vocabulary, combined information, extracted facts and well described data.
• Reference data systems, banking systems and enterprise applications can be integrated to adopt the FIBO vocabulary.
• Data and metadata are harmonized into hubs; virtual data warehouses are more efficient than ETL processes.
• Unstructured documents and contracts can be mined to extract facts and data.
• Workflows and business processes can be automated.
• The cost of regulatory reporting is reduced and compliance ensured.

Whether you are interested in regulatory compliance (BCBS239, Prudential Standards, KYC/ FACTA), improving workflow processing, mining information assets or harmonizing your data to manage risk, gain market insight or a 360 view of your customer, Smartlogic can help.