Automating Financial Regulatory Compliance Using Ontology+Rules and Sunflower

Abstract

Compliance departments in the international finance industry are struggling to use traditional methods to keep up with the demands of new and more stringent regulatory and policy requirements. One initiative supported by many institutions is definition of a common Financial Industry Business Ontology (FIBO). We regard a common ontology as an important step, but in order to support real-world uses cases, the ontology needs to be augmented, and further supplemented by rules that encode the meaning of regulations and policies. We use Sunflower, which is built on top of the Flora-2 knowledge representation languages and reasoner, to add automation to the compliance lifecycle. Sunflower is domain-agnostic, and financial regulatory compliance is one of its many application areas.