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About FIBO
About FIBO

about fibo

the Open Semantic Standard
for the Financial Industry

What is the Financial Industry Business Ontology (FIBOTM)?

The Financial Industry Business Ontology (FIBO) is a business conceptual model developed by our members of how all financial instruments, business entities and processes work in the financial industry.

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 is the standard for harmonization of data across repositories. It is a mechanism for validating data quality. It is the building block for business process automation and the pathway for flexible risk analysis.

Why is FIBO Important?

In our 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 address the problem of common terms that have different meaning and vague definitions that don’t capture critical nuances.

why is FIBO important

This results in a continual process of mapping and confusion over meaning. Inconsistent nomenclature makes it difficult to compare data and even harder to understand complex financial processes. The lack of precision inhibits our ability to automate business processes and makes it difficult to verify business requirements. The lack of a standard for financial meaning is the biggest reason why we lack confidence in data quality and a leading contributor to the high-cost of doing business. This is out of place for an industry that operates in real time, on a global basis, with complex legal interconnections and high transaction volumes.

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 expert members of the EDM Council 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 to promote trust and minimize the need for costly reconciliation of data. Think of FIBO as a “Rosetta stone” to help users to create and explore connections and relationships between instruments, business entities and counterparties to determine expected cash flow, unravel risk and identify transitive relationships that were not previously possible.

FIBO USE CASES

How is FIBO
Used in the
Financial Industry?

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. From this unified view of data meaning, firms are using FIBO for:

how is FIBO used
  • Data Harmonization: FIBO harmonizes data across heterogeneous data sources and systems.  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 inference based analytics and the identification of complex relationships for assessing counterparty risk, classifying financial instrument types, flagging structural errors and calculating expected cash flow. FIBO delivers the BCBS 239 requirement for scenario-based reporting.
  • 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 Uses
Web Standards

FIBO is technically expressed in the RDF/OWL - 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 terrorist 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. By taking advantage of the RDF/OWL Web standard, FIBO uses machine intelligence and network graph capabilities to express, classify and link data in ways that were not previously possible.