Bob Iati, Senior Director of Capital Markets at Dun & Bradstreet, writes a clear and compelling blog post on why data standards are the answer to the regulatory burden in capital markets. It's a real “seeing the wood for the trees” piece.
In a nutshell, the financial industry spends so much money on meeting regulatory requirements that it can't pursue innovation. If they use relevant industry data standards such as the Financial Industry Business Ontology (FIBO) they can save time and money, and up their game.
That's the business case. But accepting the case, and putting it into action, demands a shift in perspective. Participants in the industry have to recognize their business is contracts; that contracts are made up of standard features; and these features can be codified. It's about getting people to see the difference between the values inserted in a contract, which are unique to the occasion, and the slots the values occupy, which are eternal.
It sounds crazy, but it might have been easier for the financial industry to transition to a more data-centric environment if it had experienced a more forms-intensive evolutionary stage. The insurance industry has been adept at formalizing – and designing forms for – recurring types of contract. In other industries, and in the more esoteric insurance deals, whenever someone reuses a piece of boilerplate text to construct a contract, they're doing the same kind of thing as filling in a form – in logical terms. But it's a practice that looks very different to form filling, and less amenable to automation. You've got to know what to cut and paste.
Standards take repeated expressions of expertise and bake them into business processes. This speeds up the business, reduces the scope for error, and frees experts to work on more novel and creative tasks. Data Management Review