Driving data standards to enable innovation
Why Data Standards Matter...
The lack of high-quality, consistent, and accessible data was a key source of risk in the financial crisis. Risk systems designed to assess counterparty risk, interconnections, and short term funding were strained because, in part, the data they required and even the reports they generated lacked standards for basic data identifiers, elements, and terms…[this] lack of consistent and high-quality data not only exacerbated the buildup of risks, it also limited the ability to act decisively in the crisis.
This led to the following conclusion, that...
Stronger and more consistent financial data standards will enhance financial stability by addressing a major deficiency that impairs decision-making. Data standards, when implemented appropriately, will promote data transparency, comparability, and quality, enabling aggregation of risks, financial stability monitoring, and better firm risk management.
Importance of data standards
Today, more than ever, all industries recognize the importance of data standards as foundational to enabling their businesses. Manufacturing, pharmaceuticals, health care, insurance, medical – even agriculture, depend upon consistent and accurate data to enable better understanding of their clients, customers, and the markets they operate in. Data standards are needed for analysis. Data standards are needed for accurate comparability. Data standards turn data into information and information into insight. As industries continue to advance their capabilities in Big Data, Artificial Intelligence, Machine Learning and Deep Learning, standardized data becomes the accelerator to new and greater innovation.
EDM Council’s Role in Advancing the Adoption of Data Standards
The EDM Council has always been a strong advocate for the advancement and adoption of international data standards. OFR staff, along with many of its members, participate in a number of standards bodies, collaborating with industry to drive information standards across the industry. The EDM Council has supported standards such as ISO-20022, LEI (Legal Entity Identifier), along with other transmission standards such as SWIFT, FpML, FIX, and MISMO.
FIBO and the Web Ontology Language
The Web Ontology Language (OWL) is an emerging standard for representing knowledge. Known as RDF/OWL (Resource Description Framework/Web Ontology Language), it was first introduced by DARPA, an agency of the US Department of Defense, in the early 2000's. RDF/OWL represents data semantically, enabling greater insights into data's meaning, dependencies and relationships. RDF/OWL is being used across all industries, from the IoT to manufacturing, marketing and now, emerging in finance.
FIBO, the Financial Industry Business Ontology, was developed by the EDM Council utilizing the innovative standards of RDF/OWL. As the adoption of FIBO grows, firms are recognizing the benefits that FIBO is enabling in areas of risk, compliance and regulatory reporting. For more information about FIBO, click FIBO.
If you would like to discuss any aspects of the EDM Council's Standards and FIBO Agenda, contact the Council here.