Technology Standards to Improve Financial Transactions
Our world is driven by legal contracts about complex financial instruments and multi-faceted entity relationships - yet we have common business terms that have different meanings, common meanings that use different terms and vague definitions that don't capture critical nuances. This is out of place for an industry that operates in real time, on a global basis, performs intricate analysis across many functions, is required to report to regulators with precision and needs improved efficiency by automating business processes. Financial services organizations have a language problem.
Financial instruments and their transactions processing is highly complex and nuanced process. Many estimations put say that 92% of financial business cost is data. The daily cost of Trade Settlement Fails in the US is $200 billion. The lack of accurate traceability of trade Information as it moves from front and middle office to back office and analyzed for reporting is an acute problem across all sectors of the financial industry. Regulators are increasingly asking for near-real time trade transaction data to conduct systemic risk analysis.
OMG has been developing standards for nearly 30 years and has an international suite of standards to manage and share data in the finance industry. These standards, which are developed by companies in the finance industry and vendors around the world, reduce the risk of new technology, preserve the value of legacy systems, and reduce time to market and integration costs.
Finance Domain Task Force (FDTF)
The OMG Finance Domain Task Force (Finance DTF) was established to help the market understand that data is a business asset. It promotes the notion that data and its semantics (business meaning, context and rules) is the DNA of financial services. It is not just the money but the information about money that is equally critical to manage. The Finance DFT develops innovative strategies, best practices and standards that help transform financial data into smart data of higher business value.
Financial Industry Business Ontology® (FIBO®)
A joint effort by OMG 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®. FIBO will contribute to transparency in the global financial system, aid industry firms in providing a cost-effective means for integrating disparate technical systems and message formats, and aid in regulatory reporting by providing clear and unambiguous meaning of data from authoritative sources.
Financial Instrument Global Identifier® (FIGI®)
Many of the systems in use today across securities industry have been built around proprietary, closed methodologies for identifying financial securities. Hundreds of symbologies are in use, with companies often using various classification methods to name and manage financial securities and map contextual information about these securities during the trade negotiation, execution, settlement, and clearing process. Supporting multiple identifiers methodologies can make data management and integration more costly and redundant. FIGI removes this obstacle by specifying the structure and semantics of Global Identifiers, how they are constructed and validated, and their relationship with other financial information.
OMG cybersecurity standards help protect software assets from unauthorized access and penetrations, outages, data corruption, and other operational problems. OMG modeling language standards also ensure that security is designed upfront as part of a principled design process. Cyber threats facing a nation's critical infrastructure, mission-critical systems, or any Internet of Things (IoT) system, demand a cyber infrastructure that matches their combined enormity and complexity.
Business Process Modeling Notation™ (BPMN™)
The Business Process Modeling Notation™ (BPMN™) standard is a precise, complete and graphical notation for documenting well-defined business processes. BPMN resolves many ambiguities found in textual process specifications by assigning activities to specific actors. Analyzing resulting models can be used to drive process improvement initiatives, regardless of whether processes are automated or manual. Because the graphical model is readily understandable by non-technical people, it serves as a bridge that allows collaboration between business stakeholders and IT personnel. OMG BPMN 2.0.1 specification has been published as International Standard ISO/IEC 19510:2013, through the ISO Fast Track process.
Data residency is the set of issues and practices related to the location of data and metadata, the movement of (meta)data across geographies and jurisdictions, and the protection of that (meta)data against unintended access and other location-related risks. Both data protection laws and data residency regulations make it increasingly important and urgent to understand the impact of the placement of data centers on the cost of doing business.
*FIBO and Financial Industry Business Ontology are registered trademarks of the EDM-C, used with permission