A “Rosetta Stone for Data”

Jul 23, 2015

an16456b_lThe Rosetta Stone was discovered by soldiers in Napoleon’s army at the end of the 18th Century. It memorializes a decree by King Ptolemy, from 4th Century upper Egypt, in Greek, demotic and hieroglyphic — enabling latter day archaeologists and linguists to decode the latter two languages by virtue of the knowledge of the former.

Here in the 21st Century, an analogous situation exists, particularly in the financial services sector.  Modern day information storage and transmission, though no longer embodied in stone, continues to suffer from bespoke vocabularies and linguistic balkanization.  One bank might use the word “security” in a way that works for its processes, but which does not translate when it comes time to communicate with partner banks or regulators.  Whatever label we might use for a thing, what is essential to being about to talk about it is agreement on what we say about that thing in relation to other things — if it ‘looks like a duck and quacks like a duck’ …

For this agreement on meaning to work, a common ontology is necessary, enabling banks (in this case) to describe their concept in a way that will allow counter-parties and government officials to query vast databases and derived a common understanding of the meaning of that data (and, on that basis, to make inferences about the ‘thing’ that is the object of concern).

In a recent article,* the FTF news calls the Financial Industry Business Ontology (“FIBO”) a “Rosetta Stone for for Data”.  If the metaphor holds, it allows us to deduce one set of assertions with another to find the common thing to which we both refer, in a rigorously consistent way.  I have to admit, the use of the Rosetta Stone metaphor is by now pretty trite and meaningless (particularly since most folks don’t know that contained Ptolemy’s decrees — I didn’t).

The FIBO standard is being developed by the Electronic Data Management Council and standardized by the Object Management Group over time.  Today, only Foundations (which according to the EDMC, describes “the business terms and relationships associated with financial instruments, pricing concepts and financial processes”), Business Entities and Indices and Indicators (describing what their titles suggest) exist.

However, FIBO will rapidly expand to include Financial Business and Commerce (FBC) standards, which, as Thematix’s Elisa Kendall (a member of OMG’s architecture board and FIBO ontologist) explains, “are definitions for very high-level financial instruments, which we can then extend into securities, loans, derivatives and other areas. So, it provides us with a high-level scaffolding to help glue those things together.”

Thematix is already hard at work helping deploy FIBO into some “SIFIs” in the US and abroad.  They are finding it a powerful way of providing clear and semantically unambiguous business requirements for data.  They are deep in the thicket of BCBS 239 and are finding a way to at least have a chance of addressing its requirements in as timely a way as possible.  We of course are interested if we can help you in similar ways.

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