The House of Finance has 15 fundamental Business Concepts

Abstract

This article identifies and describes the fifteen most essential entities in the Financial Industry Business Data Model and their core relationships with each other. We propose to represent the business of Banking and Investment via these fundamental concepts, their specializations and relationship hierarchies.

For Data Architects the fundamental Business Concepts are the navigation into the data model and the means to convey the design to team-members and non-technical users.

For Ontologists new to the Financial Industry Business Ontology (FIBO) , the article provides top-down structural and business content view of the design.

The business concepts with their icons and the overview diagram are the central theme of FIB-DM training and education PowerPoints, Videos, and onsite classes. With Reference at the top the conceptual diagram looks like a house. This article discusses the considerations for declaring fundamental concepts and relationships.

FIB-DM / FIBO on one page

A diagram of the Financial Industry Business Data Model 15 fundamental concepts
The House of Finance with its 15 fundamental Business Concepts

For Data Architects (and Ontologists), this is a one-page diagram to introduce Business people to the ontology and its derived data model. The picture shows the most significant supertype entities, by the number of entity subtypes (rdfs:subClassOf), participation in associations and associative entities (rdfs:subPropertyOf), and subjective business significance.

I believe icons, rather than boxes help non-technical users to memorize, recognize, and internalize the concepts. The symbols in the diagram are the ultimate supertypes of the data model. In other words, entities that do not subtype to any other entity. In the FIBO these are classes that are a direct subclass of owl:Thing.

Definition of the fifteen concepts

The fifteen fundamental concepts are the Thing in Role (TIR), Reference (REF), Arrangement (ARR), Autonomous Agent (AA), Agreement (AGR), Commitment (COM), Document (DOC), Legal Construct (LC), Contractual Element (CE), Occurrence (OCC), Location (LOC), Service (SVC), Time (TI), Product (PRD), and Account (AC).

# Mnemonic Topic Description
1   The icon for the Thing in Role (TIR). FIBO Definition A thing-in-role is a relative concept that ties some Thing to a role it plays in a given situational context.
  TIR Business Content The Thing in Roles (TIR) takes the center spot in the house of finance.
In retail banking and investment services, a person – one record in Autonomous Agent – can be a client of the Financial Institution (FI), and obligor, creditor, guarantor, beneficiary, investor party to agreements. Furthermore, a person as an employee of the FI can fulfill responsibilities like a relationship manager, corporate officer, or internal auditor. The person may be an employee or agent for a relevant external entity regulating the FI or providing services. For Organizations and Legal Entities, the associations between Autonomous Agent and Thing in role becomes many-to-many. To prove financial services and to act as an agent, the FI creates many Legal Entities. Likewise, the legal entity may support several functional roles. The Thing in Role is not limited to Legal Persons and Organizations. A financial instrument, for example, can be Underlier for a derivative or constituent in a basket or index. The diagram shows the Reference referring to the Ting in Role, for example, with a customer or client ID. As a Regulatory Agency, the TIR governs a jurisdiction, subtype of Location. The Thing in Role has the identity of an Autonomous Agent; it issues documents. The Financial Institution provides Products and services and is a party to Agreements.
  Thing in Role FIB-DM Hierarchy With more than 270 subtypes entities, the thing in Role forms the most extensive hierarchy in the Financial Industry Business Data Model.
•Agent in Role is Client, Contract/Controlling/Reporting Party, Obligor, and Manager.
•Assets are things of values, in the context of Financial Asset or Collateral.
•Functional Entity has rich taxonomies for Government and (Financial) Service Providers.
•Pool and Basket Constituents model indices and pooled investments.
•Facilities and Venues cover financial market places.
  fibo-fnd-pty-rl:ThingInRole FIB-DM Associations •As a Services Provider and Functional entity, the TIR provides Products and Services.
•It is a Party in Role or Contract Party in Agreements.
•The TIR issues Documents and as a Registry or Agency issues Identifiers.
•The Identifiers, in turn, identify other Functional Entities or Service Providers.
2   FIBO Definition A concept that refers to (or stands in for) another concept.
  REF Business Content Amounts, IDs, and Codes are References. Another function is to provide context, such as a type to an association.
  Reference FIB-DM Hierarchy •Identifiers are the most critical subtype of REF. We find Currency codes, and various system-generated IDs for accounts, trades, and everything else.
•Registry Entries perform a similar function, but a Registrar issues the IDs. Securities ID Numbers, Bank Identifiers, and the LEI and FDIC from the Call Report example.
•Codes and Classifiers, categorize things. Note that some codes like currency are also a subtype of Identifier. REF subtypes also support Expressions, Formulas, Variables, and Measures (amounts are measures!).  
  fibo-fnd-rel-rel:Reference FIB-DM Associations •The Reference identifies instances of other concepts: Autonomous Agents, Things in Role (i.e., a Broker ID), Locations, Agreements, and Occurrences (i.e., Transactions).
•Various concepts have Monetary Amounts, a Reference.
•Arrangements may define References, typically in a classification.
Things in Role, such as Registrars issue Reference IDs.
3   FIBO Definition An organizing structure for something
  ARR Business Content The Arrangement provides structure to codes and identifiers.  
  Arrangement FIB-DM Structure •Indexing, Identification, and Classification Schemes can arrange things multi-level.
•Collections are groupings for Baskets, Pools, Portfolios, Registries, etc.
•Trade and Product Lifecycle are specializations of Lifecycle.
•Well known examples of Code Sets are Industry codes, like NAIC and SIC.  
  fibo-fnd-arr-arr:Arrangement FIB-DM Associations •Arrangements define References. Some References, like Indexes, can also be arguments for a Reference.
•An Arrangement may apply to a contract, AGR.
•A Basket has Constituents, TIR. The role is Basket Constituent, played by a Financial Instrument an Agreement.
Schedules comprise of Occurrence Kinds.  
4   FIBO Definition An agent is an autonomous individual that can adapt to and interact with its environment.
  AA Business Content Foremost the Autonomous Agent is the identity of a Thing in Role.  
  Autonomous Agent FIB-DM Structure •The Person is an intuitive subtype of an autonomous Agent. There can only be one record of You in an Autonomous Agent table.
•Likewise, there must be only one record of Legal Person with its subtype Legal Entity, Organization and Automated System.  
  fibo-fnd-aap-agt:AutonomousAgent FIB-DM Associations •Foremost, the Autonomous Agent is the identity for Things in Role. Your roles as an investor, borrower, guarantor, all converge to one person.
•IDs identify the AA.
•Various Arrangements classify the AA.
•Government Entities govern Locations, such as a country or municipality.
•In turn, Agreements govern certain Legal Entities and Organizations.
5   FIBO Definition A negotiated and usually legally enforceable understanding between two or more legally competent parties.
  AGR Business Content The Contract is the most important type of agreement.  
  Agreement FIB-DM Structure •Agreements break down into three subtypes, Mutual, Contracts, and Securities Offerings.
•Mutual Agreements are not transferable without the other party’s consent.
•Credit Agreements are all forms of loans and lending.
•The Written Contract is supertype Service Agreements, Organization Covering Agreements, and Financial Instruments, among others.  
  fibo-fnd-agr-agr:Agreement FIB-DM Associations •Agreements have TIR, Contract Parties or Parties in Role.
•Various Dates set terms for the Agreement.
•Agreements confer Commitments and Legal Elements.
•Accounts realize the Agreement, and in turn, Agreements realize Products and Services.
•Financial Instruments are Agreements and Transactions are Occurrence Kind. Hence, a REF, Security ID identifies the Security and Transactions apply to the Instrument.  
6   FIBO Definition A legal construct which represents the undertaking on the part of some party to act or refrain from acting in some manner.
  COM Business Content For FIB-DM the Commitment is the binding promise pay or exchange assets in the future.  
  Commitment FIB-DM Structure •The financial subtypes of Commitment, Payment Obligation, Debt, and Guaranty are self-explaining.
•The Contract Terms Set should be used for other commitments specified in a contract.  
  fibo-fnd-agr-agr:Commitment FIB-DM Associations •Contracts confer Commitments.
•A debtor, TIR owes or is owed Debt.
•Commitments have various dates and often References, such as Amount, Rate, and Interest.
•Commitments specify Occurrence Kinds, such as payments, interest calculations in loans and swaps.
•A Commitment can be broken down into sub commitments
7   FIBO Definition Something tangible that records something, such as a recording or a photograph, or writing that can be used to furnish evidence or information.
  DOC Business Content The data model structures for documents and records.  
  Document FIB-DM Structure •Important subtypes of DOC are (Regulatory) Reports and Legal Documents, like Contract, Identity Documents, and Transaction Confirmations.
•Published Financial Information has subtypes for Market Rates and Quotes.   
  fibo-fnd-arr-doc:Document FIB-DM Associations •Documents apply to Agreements. They are the written contract.
•Identity Documents and Business Licenses identify Legal Persons.
•Documents have various Dates and Time Intervals.
•Things in Role, publish or issue Documents.
•Rate Authorities (AA Central Banks) set Market Rates.  
8   FIBO Definition Something which is conferred by way of law or contract, such as a right.
  LC Business Content All laws and regulations are modeled with Legal Constructs and related entities.  
  Legal Construct FIB-DM Structure •Legal Constructs break down into Duty to pay or fulfill a contractual obligation, Regulations, Claims, Securities Restrictions and Legal Capacity.
•The Signatory Capacity defines, who can sign on behalf of a Legal Person. Borrowing Capacity is the amount you can borrow under a credit facility.  
  fibo-fnd-law-lcap:LegalConstruct FIB-DM Associations •Things in Role, for example, Regulatory Authorities issue Regulations, Legal Constructs.
•Agreements may confer Legal Constructs.
•Services and Products may have Restrictions
•A Legal Construct may imply, mandate, or apply to other Legal Constructs.
•The LC governs Documents and may have effective Dates.  
9   FIBO Definition General and special arrangements, provisions, requirements, rules, specifications, and standards that form an integral part of an agreement or contract.
  CE Business Content A building block for an agreement. The individual clauses and paragraphs of a written contract.  
  Contractual Element FIB-DM Structure •Contractual Elements can be Priority, as in Loans, Conditions, Terms and the Definition of the Contract.
•We mainly use the Contractual Commitment in Financial Markets for Debt Terms, Settlement, and Derivatives.  
  fibo-fnd-agr-ctr:ContractualElement FIB-DM Associations Note that the Contractual Commitment is also a subtype of the Mutual Commitment, a COM, which handles most relationships.
•Agreements, Contracts have Contractual Elements.
•The CE can have Parts that are (sub) Contractual Elements.
•Commitments can have Priority Level. For example, Debt priority in case of bankruptcy.   
10   FIBO Definition Instances of OccurrenceKind are types of events, each having a description. An Occurrence is a happening of an OccurrenceKind. Each Occurrence has a DateTimeStamp, which identifies when the Occurrence happened, and a Location (possibly virtual), that identifies where the Occurrence happened.
  OCC Business Content Other financial data models refer to Occurrence as Events. The Occurrence Kind is more robust than Event types in other models. 
  Occurrence FIB-DM Structure •Transaction Events are the most important Occurrence Kinds.
•We find Trade, Payment, Swap and Accounting Transactions.
•Lifecycle Events occur during the stages of a Lifecycle.
•The Occurrence, the actual instance of an event follows the Occurrence Kind Structure. For example, Payment is an instance of the Payment Event.  
  fibo-fnd-dt-oc:OccurrenceKind fibo-fnd-dt-oc:Occurrence FIB-DM Associations •Commitments and Agreements may specify for certain Occurrence Kinds to happen.
•The arrangement can comprise of Occurrence Kinds.
•A Reference identifies the Occurrence, for example, a transaction or trade ID.
•The Occurrence exemplifies the Occurrence Kind.
•Accounts have transactions
•Things in Role may facilitate Occurrences.  
11   FIBO Definition Anything that can be defined as the answer to a question of the form, Where is…?
  LOC Business Content Physical and virtual places.  
  Location FIB-DM Structure •Geopolitical Entities are physical Locations with a political identity, such as Country, Subdivision, Municipality, or Tribal Area.
•Physical Locations are Housing Units, Post Code and Statistical Areas, or any other Populated Places.
•Notional Places are abstract locations. Notional Financial Marketplaces are an important subtype.
•Virtual Locations are on the net. E.g. URLs and E-Mail addresses.  
  fibo-fnd-plc-loc:Location FIB-DM Associations •A Reference identifies a Location. (e.g. ISO Country Codes)
•A Government Thing in Role governs the Location.
•Locations can comprise other Locations. This hierarchy may be formally supported by an Arrangement classifying the Locations. For example, Country, State, County.  
12   FIBO Definition A type of economic activity that is intangible is not stored and does not result in ownership; a service is consumed at the point of sale.
  SVC Business Content Cash dispense is a service. The Free Checking Account with ATM card is the Product.
  Service FIB-DM Structure •Subtypes of Services are Regulatory, Registration, and Financial Service.
•The major financial services are Banking, Investment, Insurance and Capital Market related.  
  fibo-fnd-pas-pas:Service FIB-DM Associations •Things in Role, provide services.
•The Account realizes the service.
•An agreement may specify services, for example, a Listing Service may list Securities, Agreements.
•A Payment Service involves the Payment Obligation, a Commitment.
Some Legal Constructs apply to Services.  
13   FIBO Definition Time Instant is a temporal entity that is a member of a time scale, with no extent or duration. Time Interval is a segment of the time axis, a location in time, with an extent or duration
  TI  Business Content The data model has two ultimate supertypes under the Time concept: Instant and Interval.  
  Time FIB-DM Structure •Time Instant subtypes reflect precision, Date, DateTime, and timestamp.
•The Time Interval can be a Duration (e.g., 10-year) or the period between two dates.  
  fibo-fnd-dt-fd:TimeInstant fibo-fnd-dt-fd:TimeInterval FIB-DM Associations •Every concept has time Instants or Intervals.
•A Person, AA has a date of birth.
•Documents have issuance dates.
•Commitment has settlement dates.
•Arrangements may specify recurrence and other intervals.
•Time Intervals have Start and End Dates.  
14   FIBO Definition A commercially distributed good that is (1) tangible property, (2) the output or result of a fabrication, manufacturing, or production process, or (3) something that passes through a distribution channel before being consumed or used.
  PRD Business Content The product is the standardized offering of agreements, accounts, and services.  
  Product FIB-DM Structure •The most significant subtypes are Contractual and Financial Products.
•The Time Deposit is an example of an Account Product
•There are many Financial Products for Banking and Over The Counter.
•Packaged Products are both Financial and Contractual Products.  
  fibo-fnd-pas-pas:Product FIB-DM Associations •Service Providers, Things in Role, provide Products.
•Agreements realize the Product. The Contract is to buy the Product and may specify details and conditions.
•Documents characterize or specify the Product.
•A Packaged Product comprises of other Products.
•The Account also realized or implements the Product.  
15   FIBO Definition A container for records associated with a business arrangement for regular dealings or services (such as personal or professional services, banking)  
  AC Business Content The common retail examples are General Ledger, savings and investment accounts.  
  ACCOUNT FIB-DM Structure •Accounts currently have Financial Service and Bank Accounts as subtypes.
•Financial Services Accounts are Investment, Deposits, Loans, Credits, and other services.
Expect General Ledger Accounts in the future.  
  fibo-fbc-pas-caa:Account FIB-DM Associations •Things in Role, Financial Service Providers, Things in Role provide accounts to their customers.
•The Account realizes Financial Services Agreements, and in turn, the underlying Product or Service.
•The Account number to identify an Account is a Reference.  

FIB-DM entities and number of subtypes

The table is a list of FIB-DM entities sorted by the number of their subtypes. You can re-create a list-report of PowerDesigner inheritances, ERWin subtypes, or the equivalent in your data modeling tool. Two notes:

First, Occurrence and Time are cover two ultimate subtypes. There is no and there shouldn’t be a common supertype for the entities.

Second, I omit Language and Convention from the Fundamental Business Concepts in favor of Account. This is a subjective assessment of the business significance.

#ConceptEntityNumber of Subtypes
1TIRfibo-fnd-pty-rl:ThingInRole278
2REFfibo-fnd-rel-rel:Reference235
3ARRfibo-fnd-arr-arr:Arrangement85
4AAfibo-fnd-aap-agt:AutonomousAgent81
5AGRfibo-fnd-agr-agr:Agreement79
6COMfibo-fnd-agr-agr:Commitment58
7DOCfibo-fnd-arr-doc:Document53
8LCfibo-fnd-law-lcap:LegalConstruct49
9CEfibo-fnd-agr-ctr:ContractualElement42
10OCCfibo-fnd-dt-oc:OccurrenceKind26
11LOClcc-cr:Location24
12SVCfibo-fnd-pas-pas:Service18
13TIfibo-fnd-dt-fd:TimeInterval17
13TIfibo-fnd-dt-fd:TimeInstant17
14PRDfibo-fnd-pas-pas:Product15
lcc-lr:Language14
fibo-fnd-dt-bd:Convention14
15ACfibo-fbc-pas-caa:Account13
lcc-lr:CodeElement13
fibo-fnd-oac-ctl:ControllingCapacity11
10OCCfibo-fnd-dt-oc:Occurrence11

Association Matrix

The table shows the fifteen concepts and their associative entities. The values are a rollup of ultimate parents and ultimate associative entities. For example, the cell TIR (Thing in Role) and fibo-fnd-rel-rel:provides with a value of 49 is the total of all relationships of TIR subtype entities with provides subtypes. I used this matrixand business considerations to choose significant relations for the concept doagram.

For ontologists, the Configurable Ontology to Data-model Transformation (CODT ) derives associative entities from the domain, range, and class restrictions. I think it is hard if not impossible, to formulate a SPARQL query showing object properties with all their class relations. Please comment with a query (and don’t forget, owl:inverseOf, owl:hasValue, and OR etc.)

Count of RelationshipsBusiness Concept              
Association Ultimate SupertypeAAACAGRARRCECOMDOCLCLOCOCCPRDREFSVCTITIRGrand Total
fibo-fnd-rel-rel:has4753537145279116 109 65123520
fibo-fnd-rel-rel:refersTo731473 67551531131330285
fibo-fnd-rel-rel:comprises  1635 214 212255  14161
fibo-fnd-rel-rel:provides 51   131  2413 4988
fibo-fnd-rel-rel:hasPart9  7 4   12 15  350
fibo-fnd-rel-rel:governs7 9  21452 2  1143
fibo-fnd-rel-rel:confers2 12  7118       40
fibo-fnd-rel-rel:holds1 11  1       2125
fibo-fnd-rel-rel:involves  1  118 3 11 117
fibo-fbc-fct-ra:isRegisteredBy  1        8  514
fibo-fbc-pas-fpas:relatesTo         8 2   10
Grand Total73139015318655452358730915682571253