Semantics in Finance: Addressing Looming Train Wreck in Risk Management, Regulatory Compliance and Reporting
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  Elisa Kendall   Elisa Kendall
Thematix Partners LLC
  Wesley Moore   Wesley Moore
Managing Director, Compliance
Wells Fargo Securities
  Grit Denker   Grit Denker
Senior Computer Scientist
SRI International
  Elie Abi-Lahoud   Elie Abi-Lahoud
Research Fellow
GRC Technology Centre, University College Cork
  Richard Beatch   Richard Beatch
Semantic & Metadata Architect
Bloomberg LP
  Susanne Riehemann   Susanne Riehemann
Senior Software Development Engineer
SRI International
  Reginald Ford   Reginald Ford
Principal Senior Engineer
SRI International


Thursday, August 21, 2014
12:00 PM - 12:45 PM

Level:  All - General Audience

Virtually every bank in the US is scrambling to address compliance issues that Dodd Frank has already raised, and to be poised to deal with those that are coming. According to Sen. Elizabeth Warren, in a speech given on September 12, 2013 on the fifth anniversary of the financial crisis, Congress has a responsibility to eliminate the ability for institutions to become “too big to fail”, and to address those that already are. She stated then that despite the volume of regulations that have already been published, “the agencies have missed more than 60 percent of Dodd-Frank’s rulemaking deadlines.” Spurred on by heavy lobbying from the industry, legislators have been scrambling to take the teeth out of Dodd Frank and to minimize funding for the regulators. On the other hand, there has been bipartisan movement in the Senate to go after issues around risk mitigation, including introduction of a bill last July to revive the Glass-Steagall Act.

Regardless of the legislative jockeying and tactical to-and-fro, most of the largest banks understand that they not only have inadequate automation in place to address the regulations that have already been imposed, but that even more regulation is inevitable. In a press release the same week in September, JP Morgan Chase announced that they are spending $4B to “boost staff and fix compliance and risk-control problems.” But throwing money and people at the problem alone will not begin to get to the root cause, which requires deep understanding of the business requirements, capabilities, and automation needed to address current, evolving, and exponentially growing compliance data and automation challenges.

Ontologies for

  • Legal entities (LEI) and financial contracts (FIBO, from the EDM Council, standardized at the Object Management Group (OMG))
  • Financial instrument global identifiers (FIGI, sponsored by Bloomberg, and also standardized at the OMG),
  • Financial regulations (FIRO, from the University of Cork)
and for aspects of XBRL are all active efforts to apply semantics to this highly complex and problematic domain. Since FIBO and FIGI specifications were published last year and early this year, a number of large banks and financial services companies have initiated proof of concepts and prototype activities to learn how to leverage the standards. These efforts highlight the power of the technology as well as some of the holes in current methods required to provide much needed solutions. In this talk:
  • Ms. Kendall will briefly describe the current state of semantics/standards for finance and provide some insights into the development roadmap at OMG over the coming months;
  • Dr. Beatch will give an overview of the FIGI standard, and how Bloomberg is integrating the ontology with FIBO and their own extensions to provide powerful services to their clients;
  • Mr. Moore will provide an overview of the compliance use cases that the demonstration will highlight.
  • Dr. Ford and Dr. Riehmann will demonstrate how combining FIBO, FIGI, and market data in a semantically enabled rule-based system can provide some of the critical capabilities needed to support risk management in a scalable and sustainable way.

Ms. Kendall has over 30 years professional experience in the design, development and deployment of enterprise-scale information management systems, emphasizing information architecture, ontology, and knowledge-based systems design. Her focus includes business and information architecture, knowledge representation strategies, and ontology development for clients in financial services, government, manufacturing, media, and travel domains. She has developed a number of best practices for marrying business architecture, conceptual modeling, and traditional software engineering with semantics to address complex information management issues. Elisa represents ontology and information architecture concerns on the Object Management Group (OMG)'s Architecture Board, is co-editor of the Ontology Definition Metamodel (ODM), and a contributor to a number of other OMG standards, including the Financial Industry Business Ontology (FIBO) effort.

Wesley Moore is Managing Director of Compliance Controls and Infrastructure at Wells Fargo Securities. Over his career in financial markets development and regulation, Wes has played lead roles on projects to merge and integrate broker-dealers, create swap dealer and futures commission merchant compliance programs, and numerous initiatives spanning anti-corruption, sales and trading practices, books and records, electronic communications, and clearing services. As Managing Director for Wells Fargo Securities, Wes manages teams delivering policies, procedures, training, technology, controls, and compliance certifications for registered legal entities within the capital markets domain. Wes is a FINRA registered Compliance Official and General Securities Principal. Earlier in his career, Wes held senior roles on mass privatization, capital markets institutions and systems development, and merchant banking teams in Eastern Europe and Central Asia.

Dr. Grit Denker is a senior computer scientist in the Computer Science Laboratory at SRI International. With a proven record of successfully executing numerous projects, Dr. Denker is an expert in novel human-machine technology; semantic technologies; modeling and verification of communication, security, and network policies; cognitive and policy-based systems (both wireless and wired devices); and modeling and reasoning about distributed systems. Dr. Denker has a Ph.D. in computer science and Dipl-Math in mathematics from the Technical University of Braunschweig, Germany. Dr. Denker is co-leading the development of semantic modeling and reasoning technologies that have been successfully applied to analyzing system interoperability and automating financial compliance and regulation. Dr. Denker is also the co-lead of SRI’s bRIGHT human-machine interaction program. bRIGHT will increase efficiency and effectiveness for users that are cognitively loaded and heavily tasked.

Elie Abi-Lahoud, PhD, has been working on innovative technologies for enterprise solutions for the past 12 years. Since 2012, he is leading a multinational - multidisciplinary research team that is engaged in applying semantic technologies to Governance Risk and Compliance in financial services at the Irish GRC Technology Centre hosted by University College Cork, Ireland. Elie works closely with the Object Management Group (OMG), the Enterprise Data Management Council (EDMC) and thought leaders in the financial industry on a common vocabulary capturing shared domain-understanding, on a deeper understanding of regulations, and on improving regulation-aware decision-making. He advocates for business-centric software solutions.

Richard Beatch, Ph.D. is currently the semantic and metadata architect for Bloomberg LP based out of Princeton NJ. He holds a Ph.D. in ontology and has worked extensively in the field with roles ranging from Knowledge Architect through various senior management roles at a range of companies. Much of his work has focused on the intersection of well managed data and findability across a range of domains. For much of the past decade his work has focused on financial data and the development of semantics models aimed at optimizing the efficacy of that data.

Susanne Riehemann works at SRI International in Menlo Park, CA. She is currently involved with projects applying ontologies, rule systems, and reasoning to a variety of applications in the military domain, space engineering, and finance. Previously she developed high fidelity virtual terrains and an ontology and a rule system that automatically calculates the combined errors from the whole terrain data processing history. Before that she was involved with speech-to-speech machine translation projects. She has a PhD in Linguistics from Stanford University.

Dr Reginald Ford is a Senior Principal engineer in the Center for Software Engineering at SRI International. He is PI and leader of several US government-sponsored and commercial projects that are developing ontologies and reasoning tools using OWL, SWRL, and Flora-2. He co-leads development of the Sunflower environment for authoring and validating rules and ontologies. Sunflower applications include helping financial institutions comply with regulations, and semi-automated planning that matches capabilities needed to perform a suite of tasks with capabilities of candidate resources. Dr. Ford has a B.A. from Yale University and a Ph.D. from University of California, Berkeley.

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