Enterprise-wide view of data

The fundamental purpose of the FSDM is to enable the business concepts, to be clearly understood and communicated. It provides an enterprise-wide view of data common to all financial services organizations. The FSDM is structured in a hierarchical, ‘top to bottom’ structure, or conceptual to physical design, with multiple layers of business content models containing industry standard business definitions of data. Each layer of the structure contains a content model which provides more detailed data based on the previous layer.

The FSDM is a generic model, defining data that is widely applicable to any financial services organization. The information reflected in the data model is independent of organizational structure and has been validated by multiple sources within the industry.

The model provides a framework for the development of consistent cross-enterprise data structures which promote information sharing across business applications. Since it provides a top-down view from an enterprise perspective, the FSDM provides a blueprint for database development as well as a tool for understanding and communicating the enterprise information resources of the major business activities of a generic financial services organization.

The Nine Data Concepts

Each of the data items in the FSDM is categorized as belonging to one of the nine data concepts. The core idea is that every business process in financial organizations could be described by using the one or more of these data concepts and their mutual relationships.

Arrangement (AR)

Arrangement data concept represents a potential or actual agreement between two or more individuals, organizations or organization units, which provides and affirms the rules and obligations associated with the sale, exchange or provision of goods, services or resources.

Examples of Arrangement:

• A corporate checking account arrangement
• A financial product licensing arrangement
• An installment loan arrangement
• A promissory note arrangement
• A credit card arrangement
• A negotiated corporate line of credit, where rates and terms have been quoted to the prospective borrower
• A living trust arrangement
• A tax-deferred brokerage arrangement
• A purchase Arrangement between the Financial Institution and an equipment vendor for the purchase of Automated Teller Machines
• An employment arrangement

Business Direction Item (BD)

Business Direction Item data concept records an expression of an Involved Party’s intent with regard to the manner and environments in which it wishes to carry out it business.

Examples of Business Direction Item:

• The Financial Institution's mission statement reflecting its intention to provide excellent service to its customers, to operate so as to be highly profitable, and to be a good corporate citizen
• A market concentration strategy that generally targets corporate business prospects with annual sales in excess of USA $15 million
• A competitor's objective and plan to open seven full service offices in the Financial Institution's service area
• Each of the specific investment and income objectives of a personal trust
• A company Policy that requires employees to take two consecutive weeks of vacation each year
• Automated Teller Machine settlement procedure #01789
• A short term economic forecast which states the real Gross National Product will grow at an annualized rate of two percent in the third quarter
• The formal mission statement of an organization unit

Condition (CD)

Condition data concept describes the specific requirements that relate to how the business of a financial services organization is conducted and includes information such as prerequisite or qualification criteria and restrictions or limits associated with these requirements. Conditions can apply to various aspects of a financial services organization’s operations, such as the:

• Sale and servicing of products
• Determination of eligibility to purchase a product
• Authority to perform business transactions
• Assignment of specific general ledger accounts appropriate for different business transactions
• Required file retention periods for various types of information
• Selection criteria for a market segment.

Examples of Condition:

• A 'late fee' of five dollars will be charged if the current payment due is not received within ten days after the payment due date
• A full time employee is entitled to three weeks of vacation annually after seven years of service
• The loan origination fee for an unsecured personal loan is fifty dollars or two percent of the unpaid balance
• The negotiated rate of interest charged a specific corporate customer for a line of credit, based on the New York Prime Rate plus one percent, will vary with New York Prime over the term of the loan, but will not exceed fourteen percent per annum
• The Financial Institution's employee #54321, John Smith, is assigned authority limit six, which empowers him to approve unsecured loans of up to twenty five thousand dollars without prior internal review
• Personal checking accounts with a month-to-date average collected balance of less than one thousand dollars will be charged a monthly fee of six dollars, plus ten cents a check for each checks written in excess of ten checks
• Organization position #56789 carries an authority limit ten, which empowers its incumbent to hire employees

Classification (CL)

Classification data concept organizes and manages business information by defining structures that provide classification categories that apply to one or more Data Concepts and groups of business concepts that apply to multiple Data Concepts.

Examples of Classification:

• XYZ Bank's corporate-wide general ledger structure (Accounting Structure)
• Advertising expenses (Accounting Unit Category)
• Workstation depreciation (Accounting Unit Category)
• Product line composed of multi-family mortgage products (Segment)
• Individual (Involved Party Classification Type)
• German (Language)
• Foot (Unit Of Measure)

Event (EV)

Event data concept describes a happening about which the financial services organization wishes to keep information as a part of carrying out its mission and conducting its business.

Examples of Event:

• A cost reduction project meeting conclusion on April 15
• The property settlement associated with the purchase of a building by the Financial Institution
• An account origination task performed by a branch employee on Monday at 11:15 a.m.
• Operation execution which deletes an account record
• A funds transfer transaction
• The declaration of a stock split for stock XYZ
• The kickoff of the campaign to market multi-family residences to young adults

Involved Party (IP)

Involved party data concept Represents all participants that may have contact with the financial services organization or that are of interest to the financial services organization and about which the financial services organization wishes to maintain information. This includes information about the financial services organization itself.

Examples of Involved Party:

Mary L. Doe John Q. Public ABC Corporation XYZ Company Corporate Loan Department Senior Teller #326

Location (LO)

Location data concept describes a place where something can be found, a destination of information or a bounded area, such as a country or state, about which the financial services organization wishes to keep information.

Examples of Location:

• 123 East Main Street
• Lot 5432, Section 6, Tract 78
• Section 6
• Tract 78
• Telephone number 01 301 987 6543
• Rack 25, bin 003 in Storeroom 4
• Australia
• Staffordshire County
• Greater New York City Metropolitan Area
• Postcode area 22193
• C:\BOBS\WORK.RPT

Product (PD)

Product data concept describes goods and services that can be offered, sold or purchased by the financial services organization, its competitors and other Involved Parties during the normal course of business. The Data Concept also includes non-financial goods and services that are of interest to the financial services organization.

Examples of Product:

• Private Banking Residential Mortgage Loan (a competitor's Product)
• Preferred Client Personal Trust Service (offered by the trust department)
• Corporate Lines of Credit
• Personal Checking Account
• Foreign Exchange
• Securities Trading Service
• Financial Planning Service
• Remittance Processing Service
• Income Generating Investment Service
• Capital Appreciation Investment Service
• Personal Trust Service
• Corporate Trust Service
• Common Mutual Fund A
• XYZ Common Stock
• Diesel Powered, Four Door, Sedan

Resource Item (RI)

Resource Item Data Concept Includes and describes and value item, either tangible or intangible, that is owned, managed, used by or of specific interest to the financial services organization in pursuit and accomplishment of its business.

Examples of Resource Items:

• A red truck, Vehicle Identification Number 9876543, included in the Financial Institution's courier transportation fleet
• The bank's Automated Teller Machine which is installed at 123 Main Street
• A corporate headquarters building which houses a branch office, executive offices, and leasable tenant space
• A vehicle title, held in the Financial Institution's files, as evidence of collateral pledged to secure a loan
• A collection of rare and valuable coins, held in the Financial Institution's vault for a customer
• A specific and uniquely identifiable certificate documenting a quantity of shares of common equity stock, which the Financial Institution, as custodian, holds for a customer over time
• The text portion of data and information such as documents and electronic messages
• A Data Model, recently developed by the Financial Institution.
• The name of the Financial Institution which is a Trademark.

The FSDM Model organizes the data items supported by each business definition. It identifies potential subtypes of the Data Concepts, some fundamental property types, and relationships. The fundamental information requirements are structured into Data Concepts Hierarchies, using principles of classification theory. Each data concept has schemes and values. The schemes correspond to the criteria or questions that you can apply to instances of the data concept, while the values are the answers to the questions.

How you can leverage on these concepts to clarify a business issue?

Let’s take a personal issue: taking a mortgage with 20 years maturity, changeable interest rate 8.25%.

• AR: mortgage arrangement, security arrangement
• BD: the bank mortgage policy
• IP: borrower, bank, guarantor, real estate owner
• CL: Involved Party Type, Arrangement Type, Product Type, etc
• CD: Interest rate, repayment period, deposit...
• EV: mortgage payment, payment to real estate owner, installment payments
• LO: address of borrower, address of guarantor, phone numbers
• PD:  long term mortgage for retails
• RI: real estate which is subject of contract, mortgage house

The benefits of implementing the FSDM

The FSDM has been developed with the assistance of banking professionals. The structure has been designed to facilitate the understanding and navigation of the model by those who may have had minimal exposure to data modeling. At the same time, the structure and rigor of the FSDM satisfies the needs of the analyst. Consequently, the FSDM provides a communication bridge between the banking and Information Systems professionals within the organization.

Reference:

This article is derived from IBM Banking Data Warehouse General Information Manual