Lecture II November 2008 OntologySemanticWebFinance · PDF file10 Financial Informatics: ... their axioms, principles, or methodological rules.” ... What is ontology of finance?

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Financial Informatics –II:Ontology and Semantic Web and Finance

Khurshid Ahmad, Professor of Computer Science,Department of Computer Science

Trinity College,Dublin-2, IRELAND

March 2014.https://www.cs.tcd.ie/Khurshid.Ahmad/Teaching.html

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Financial Informatics: Semantic Web and Ontology

SOURCE: Firat, Aykut; Madnick, Stuart; and Grosof, Benjamin, "Knowledge Integration to Overcome

Ontological Heterogeneity: Challenges from Financial Information Systems" (2002). ICIS 2002

Proceedings. Paper 17. http://aisel.aisnet.org/icis2002/17

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‘Constructing correct

definitions of pizzas

from a menu and for a

“vegetarian pizza” so

that the correct pizzas

are classified as

“vegetarian” turns out to

be a surprisingly

challenging exercise’ for

creating an ontology

(Rector et al 2004).

Rector, Alan .,Nick Drummond, Matthew Horridge, Jeremy Rogers, Holger Knublauch, Robert Stevens, Hai Wang,

Chris Wroe. (2004) OWL Pizzas: Practical Experience of Teaching OWL-DL: Common Errors & Common

Patterns (http://www.co-ode.org/resources/papers/ekaw2004.pdf)

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definitions of pizzas from

a menu and for a

“vegetarian pizza” so that

the correct pizzas are

classified as “vegetarian”

turns out to be a

surprisingly challenging

exercise’ for creating an

ontology (Rector et al

2004).

Rector, Alan .,Nick Drummond, Matthew Horridge, Jeremy Rogers, Holger Knublauch, Robert Stevens, Hai Wang,



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A tangled

pizza

toppings

hierarchy.

Rector, Alan ., Nick Drummond, Matthew Horridge, Jeremy Rogers, Holger Knublauch, Robert Stevens, Hai

Wang, Chris Wroe. (2004) OWL Pizzas: Practical Experience of Teaching OWL-DL: Common Errors & Common


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A tangled

pizza

toppings

hierarchy.

Rector, Alan,. Nick Drummond, Matthew Horridge, Jeremy Rogers, Holger Knublauch, Robert Stevens, Hai Wang,



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An initial

hierarchy.

Rector, Alan et al (2004) OWL Pizzas: Practical Experience of Teaching OWL-DL: Common Errors & Common


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A correctly

classified

hierarchy.



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a menu and for a




turns out to be a




2004).




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a menu and for a




turns out to be a




2004).




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What counts as a Pizza.

‘Do all pizzas have to

have a base? toppings? Is

a pizza base without a

topping a Pizza? Is

anything with a

Pizza_Base and

Pizza_Toppings a Pizza?

Can we completely define

a Pizza?’ (Rector 2004,

section 5.5)




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What counts as a Pizza.

‘Do all pizzas have to

have a base? toppings? Is

a pizza base without a

topping a Pizza? Is

anything with a

Pizza_Base and

Pizza_Toppings a Pizza?

Can we completely define

a Pizza?’ (Rector 2004,

section 5.5)



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http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/index_en.htm

We need to exchange information. So we mark

up the key elements of texts:

A markup language is an artificial language using a set of annotations to text that

give instructions regarding the structure of text or how it is to be displayed. Markup

languages have been in use for centuries, and in recent years have also been used in

computer typesetting and word-processing systems.

A well-known example of a markup language in use today in computing is

HyperText Markup Language (HTML), one of the most used in the World Wide

Web. HTML follows some of the markup conventions used in the publishing

industry in the communication of printed work among authors, editors, and printers.

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http://en.wikipedia.org/wiki/XML

We need to exchange information. So we

mark up the key elements of texts:

Ontology exchange is envisaged through

mark languages like XML:

The Extensible Markup Language (XML) is a general-purpose

specification for creating custom markup languages. It is

classified as an extensible language, because it allows the user

to define the mark-up elements. XML's purpose is aiding

information systems share structured data, especially via the

Internet, to encode documents, and to serialize data

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http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/index_en.htm

So we know how our world works. How do we tell others in the

agencement what we know? Take the case of value-added tax:

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http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:347:0001:0118:en:PDF

So w

e know

how

our

worl

d w

ork

s. H

ow

do w

e

tell o

ther

s in

the agencement w

hat w

e know

?

Take

the

case

of value-added tax: It

takes

a 1

81

page

docu

men

t to

just

outlin

e th

e ta

x.

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http://www.starlab.vub.ac.be/research/projects/poirot/contents/vatontology.htm

Colleagues in the Netherlands have developed an ontology

of European VAT laws. They have used this ontology to

build an information extraction [system]

(i) to assist both tax authorities as well as traders in

extracting specific knowledge about companies.

(ii) […][to] retrieve relevant legislative texts or even

particular sections in VAT law based on specific

concept-queries.

The colleagues claim that the ontology can be used to

support a so-called reader’s assistant in providing extra

VAT-related information about concepts appearing in e.g.

company websites. And to deal with VAT Fraud

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http://www.starlab.vub.ac.be/research/projects/poirot/contents/vatontology.htm

So we know how our world works. How do we tell others in the

agencement what we know? Take the case of value-added tax:

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Financial Informatics: What is ontology?

Literature on intelligent systems invariably Literature on intelligent systems invariably refers to a thesaurus of domain objects in the refers to a thesaurus of domain objects in the construction of knowledge bases. construction of knowledge bases.

A ‘thesaurus’ suggests the existence of a range of A ‘thesaurus’ suggests the existence of a range of words and phrases associated with a concept. words and phrases associated with a concept. The names of the objects form the terminology The names of the objects form the terminology of the domain. of the domain.

The organisation of terminology is discussed The organisation of terminology is discussed under the rubric of ontology. under the rubric of ontology.

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Quine, Willard, van Omran. (1981). Theories and Things. Cambrdige (Mass) & London: TheBelknap Press of Harvard University Press.

Financial Informatics:What is ontology?

Ontology is a branch of philosophy, and some philosophers believe that to understand what is in every area of reality one should look into the theories of sciences (Quine 1981).

Quine coined the term ontological commitment: ‘scientists and philosophers to seek a comprehensive system of the world, and one that is oriented to reference even more squarely and utterly than ordinary language’.

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Michael Ashburner et al (2000). "Gene Ontology: tool for the unification of biology". Nature Genetics Vol 25, pp 25 - 29

“The goal of the Gene Ontology Consortium is to produce a dynamic, controlled vocabulary that can be applied to all eukaryotes even as knowledge of gene and protein roles in cells is accumulating and changing. To this end, three independent ontologies accessible on the World-Wide Web (http://www.geneontology.org) are being constructed:

•biological process, •molecular function and •cellular component. ”


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Boettke, Peter J., Christopher J. Coyne, John Davis, Francesco Guala, Alain Marciano,

Jochen Runde and Margaret Schabas. Where Economics and Philosophy Meet: Review of the Elghar

Companion to Economics and Philosophy with responses from the Authors. The Economic Journal, Vol 116

(June), pp F306–F325

Ontology is a branch of philosophy, and some philosophers believe that to understand what is in every area of

reality one should look into the theories of sciences (Quine 1981).

But some folk are rather sceptical of this approach: “Scientific theories

and scientific methods are usually ontologically opaque. Their ontological

commitments, in other words, can rarely be read off unequivocally from

their axioms, principles, or methodological rules.” (Boettke et al 2005:pp

F319).

‘[…] methods and models used by economists are ontologically opaque,

that is, that economists ontological commitments cannot be read directly

off the tools they use.’ (Boettke et al 2005:pp F322).


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Boettke, Peter J., Christopher J. Coyne, John Davis, Francesco Guala, Alain Marciano,

Jochen Runde and Margaret Schabas. Where Economics and Philosophy Meet: Review of the Elghar

Companion to Economics and Philosophy with responses from the Authors. The Economic Journal, Vol 116

(June), pp F306–F325

Ontology is a branch of philosophy, and some philosophers believe that to understand what is in every area of

reality one should look into the theories of sciences (Quine 1981).

But some folk are rather sceptical of this approach: “Scientific theories

and scientific methods are usually ontologically opaque. Their ontological

commitments, in other words, can rarely be read off unequivocally from

their axioms, principles, or methodological rules.” (Boettke et al 2005:pp

F319).

‘[…] methods and models used by economists are ontologically opaque,

that is, that economists ontological commitments cannot be read directly

off the tools they use.’ (Boettke et al 2005:pp F322).

Financial Informatics:What is ontology of finance?

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http://www.soberit.hut.fi/T-86/T-86.5161/2007/FinancialOntology_final.pdf

How does one define aspects of

ontology of finance/economics?

How does Reuters News Agency

assign categories to their

reports?

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Indexing news wires � Reuters News services use a Coding

Scheme that is updated annually. Three major categories are

being used: Industry, Topic and Region codes are used

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Two major applications:

Indexing news wires � Reuters News Feed; Variable news feed: In a sample over half the news items had less than or equal to 5 codes; 10% had more than 7 codes and some news items had as many as 20 codes

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

1 3 5 7 9 11 13 15 17 19 21 23 25 27

Number of Codes per Document

Num

ber o

f Doc

umen

t

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Consider financial business process integration standards: Unified

Business Language (UBL), ISO 20022 (UNIFI), and Interactive

Financial eXchange (IFX), and how a bill is being described in

the three:

Tuomo Mäkelä, Kaisa Rommel, Jukka Uskonen, Tao Wanhttp Towards a Financial Ontology – A Comparison of e-

Business Process Standards. http:////www.soberit.hut.fi/T-86/T-86.5161/2007/FinancialOntology_final.pdf

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Image from: http://www.ibm.com/developerworks/ibm/library/i-cross/

In order to systematically

and profitably conduct

business within and across

organisations, it is important

that agents (people,

machines, algorithms) are

able to exchange data and

that the data has meaning

for all the agents involved in

the exchange. exchange

data and keep it meaningful

to everyone involved.

There are sophisticated

technological solutions for

such a meaningful exchange IBM Crossworlds ‘hub and spoke’ B2B systems

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Universal Business Language (UBL) is an

ambitious effort to unify the chaotic world of

XML formats for business: The language

(and the standard) comprises business forms

for placing an order; responding to simple

and complex orders; cancelling an order;

dispatch advice or shipping notice; reciept

advice; and, invoices.

http://www.ibm.com/developerworks/xml/library/x-think16.html

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http://www.ibm.com/developerworks/xml/library/x-think16.html

Universal Business

Language (UBL) is an

ambitious effort to unify

the chaotic world of XML

formats for business: The

language (and the

standard) comprises

business forms for placing

an order; responding to

simple and complex

orders; cancelling an

order; dispatch advice or

shipping notice; reciept

advice; and, invoices.

An ‘order’ form in eXtensible Markup language (XML)

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The Interactive Financial eXchange (IFX) specification

is a […] XML-based, financial messaging protocol,

built by financial industry and technology leaders [..].

IFX can be used for

Electronic Bill Presentment and Payment

Business to Business Payments

Business to Business Banking (such as balance and transaction

reporting, remittance information)

Automated Teller Machine communications

Consumer to Business Payments

Consumer to Business Banking

http://www.ifxforum.org/standards/

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UNIFI is the nickname of ‘ISO 20022 - UNIversal Financial

Industry message scheme’, the platform proposed by ISO to

develop all financial messages.

Objective: To enable communication interoperability between

financial institutions, their market infrastructures and their end-

user communities

http://www.iso20022.org//

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All institutions

have their own

sets of data

objectsISO standardises common

data objects�

�and groups them into ‘syntax-

neutral’ message models,

which...

XML ISO 15022

� can be ‘transformed’

in message formats in

the desired syntax

FIX

EDIFACT

SOURCE:http://www.iso20022.org/documents/general/Scripted_UNIFI_(ISO_20022)_presentation_v37.ppt

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Ordering Party Executing

Party

Trade Counterpart

y

Ordering Party

Trade Counterpart

y

Execution (FIX)

Order (FIX)

Execution (FIX)

Order (ISO

15022)

Execution (ISO

15022)

Order (FIX)

Order (ISO

15022)

Execution (ISO

15022)

Financial Informatics: What is ontology of finance?

SOURCE:http://www.iso20022.org/documents/general/Scripted_UNIFI_(ISO_20022)_presentation_v37.ppt

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There are a number of systems that can help with

the integration of business processes, and some are

appearing in the financial industry. However, the

standards are designed for different purposes and

support different processes.

Generation of a high-level ontology would provide

means to enhance the interoperability between

standards and support streamlined processes within

the financial domain.

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There are a number of systems that can help with

the integration of business processes, and some are

appearing in the financial industry. However, the

standards are designed for different purposes and

support different processes.

Generation of a high-level ontology would provide

means to enhance the interoperability between

standards and support streamlined processes within

the financial domain.

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Mäkelä, Tuomo., Kaisa Rommel, Jukka Uskonen, Tao Wanhttp Towards a Financial Ontology – A Comparison of e-

Business Process Standards (available at http://www.soberit.hut.fi/T-86/T-86.5161/2007/FinancialOntology_final.pdf

Mäkelä, Rommel, Uskonen and Wan (2007),

based in Helsinki, have asked three research

questions:

1. How do different standards cover the field of

financial information exchange?

2. How are the existing standards constructed and

related to each other?

3. What are the basic requirements for ontology to

support financial B2B integration?

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Mäkelä, Rommel, Uskonen and

Wan (2007), have used the so-

called Upper Level Ontology to

integrate the various process

languages to produce an ontology

of finance.

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Mäkelä, Rommel, Uskonen and Wan (2007), have used the so-called Upper

Level Ontology to integrate the various process languages to produce an

ontology of finance.

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Mäkelä, Rommel, Uskonen and Wan (2007), have used the so-called Upper

Level Ontology to integrate the various process languages to produce an

ontology of finance.

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Mäkelä,

Rommel,

Uskonen

and Wan

(2007),

have used

the so-

called

Upper

Level

Ontology to

integrate

the various

process

languages

to produce

an ontology

of finance.

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Financial Informatics:What is ontology of financial transactions?



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Financial Informatics:What is ontology of tangled financial transactions?



Child of

multiple

parents

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Financial Informatics:What is ontology of financial account?



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Financial Informatics:What is ontology of financial account that have siblings?



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Financial Informatics:What is ontology of financial account that have tangles?



Multiple parents!

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Central semantic authority

www.w3.org/2001/sw/hcls/f2f-2006/presentations/Federation.3.ppt

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Hierachical semantics

Very specific but

poorly sharablewww.w3.org/2001/sw/hcls/f2f-2006/presentations/Federation.3.ppt

Devoid of specifics

but very sharable

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Federated semantics

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Ontology is a branch of philosophy, and some philosophers believe that to understand what is in

every area of reality one should look into the theories of sciences (Quine 1981).

Ontology, if understood in its religious sense as ‘what there is’ (a deity

usually), then ontology or rather the ontological commitment as to what

there is fixed for all times – otherwise we will not have a diety!!

So do ontological commitments change

over time within a community and across

communities at fixed point in time

But just before I go on with rest of my talkBut just before I go on with rest of my talkBut just before I go on with rest of my talkBut just before I go on with rest of my talk --Theories and Things

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Financial Informatics:Special languages and linguistic writing

The growth in the size and complexity of the

vocabulary of a specialist language, and

the concomitant use of limited

grammatical structure, usually

accompanies a growing body of

knowledge (see, for example, Gerr 1943

and Halliday and Martin 1995).

Sentences in specialist writing are usually of

declarative and imperative type.

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Level of

‘knowledge’

Elaboration

INVENTORY/

GLOSSARY

A collection of glosses; a list with explanations of

abstruse, antiquated, dialectal, or technical terms; a

partial dictionary.

TERMINOLOGY Etymologically, The doctrine or scientific study of terms;

in use almost always, The system of terms belonging to

any science or subject; technical terms collectively;

nomenclature.

TAXONOMY Classification, esp. in relation to its general laws or

principles; that department of science, or of a particular

science or subject, which consists in or relates to

classification; esp. the systematic classification of living

organisms.

ONTOLOGY The science or study of being; that branch of metaphysics

concerned with the nature or essence of being or

existence.

Documents

Lecture II November 2008 OntologySemanticWebFinance · PDF file10 Financial Informatics: ... their axioms, principles, or methodological rules.” ... What is ontology of finance?