Basic Understanding on FIBO

Financial Industry Business Ontology (FIBO)

FIBO (Financial Industry Business Ontology) is joint effort by OMG (Object Management Group) and Enterprise Data Management (EDM) Council, FIBO is an industry initiative to define financial industry terms, definitions and synonyms using semantic web principles such as RDF/OWL and widely adopted OMG modeling standards such as UML.

Like the usual story all the different dynamics in financial industry are birth of financial crisis, similar is the story with FIBO. The crisis was the resultant of the fact that financial industry must handle the data differently; FIBO is another extension of that which needs to apply specific standards to data, for better understanding where data resides, finding value in data assets and using data to meet regulatory needs.

FIBO is an effort among financial institutions and vendors to precisely define the terms and characteristics of financial instruments, business entities, pricing and financial process to contribute in transparency towards global financial system. The FIBO ontology unambiguously describes, in business terms, contractual concepts for business entities, securities, derivatives, loans, market data, corporate actions and transactions.

FIBO is expressed in triple store language of the Web (RDF/OWL) for machine readable inference processing and UML for people readable analysis. Web Ontology Language is based on Subject-Verb-Object “Triples” for eg. Bank of America is domiciled in US, here Bank of America is a subject, US is the object and is domiciled is the verb. In this pattern all the financial terms having standardized definitions are given by OMG and EDM council. These triples are represented graphically on UML guidelines.

FIBO which is a data standardization initiative is based on Semantics & Ontologies. Semantics is the same concept used in the creation of the worldwide web and hyperlinks. Semantic technology is used to implement a data standard by mapping or attaching precise meaning and is built on dictionaries and taxonomies, so FIBO has vocabulary defining all financial process and terms.

  • State Street was one of the first companies curious about FIBO and was interested in running a proof of concept. It conducted its FIBO proof of concept on interest-rate swaps to see if the ontology could handle live data generated by the bank. Firstly State Street loaded the FIBO model into the Anzo tool—the application that stores the FIBO model and matches it to State Street’s data—to see if the semantic data could be read. Then they took the extracted data and mapped it against FIBO. Next, they generated the graphical representation of transactions. Finally, they created analytics based on that data.