THESAURUS - FINANCIAL SERVICE INDUSTRY NEED

Thesaurus - lexicon

Symptoms

Dysfunctions in the own work environment

Symptom 1: Same language, other and incomplete meaning of terms within the same country borders.

An example is the term proxy holder, mandate or power of attorney.

When the term is commonly used in correspondence, dialogues and analysis one could assume we all mean the same.

When we speak about a mandate on an account, no one puts the questions:

What type of mandate do we speak about? A reciprocal one (withdrawing one of the mandates automatically withdraws the other one) ? A professional mandate (e.g. a notary on the accounts of his study) ? A general personal mandate (on all assets of a particular person) ?
What are the rights linked to the mandate ? Right to administer the assets or the right to dispose of the assets ?
Via which channels can the rights be executed ? All channels ? Only via the branches ? What with electronic banking ?
What is the scope of the power of attorney ? Is the one signature of the proxy holder sufficient ? More simultaneous signatures needed ? If yes, how many, which ones ? Are there limitations for the different combinations ?
Who can be proxy holder ? Can a legal representative be proxy holder on the accounts of a minor ? What criteria are used concerning the legal capacity of a proxy holder/ proxy offerer ?
What legal dispositions are specific to each country ?
Are there practical limitations in implementing an IT-solution ?

o Juridical differences following the domains and countries. Ex. the age of majority differs following the nationality

of a person. Even if different nationalities reside in the same country this makes different applications.

o How can the differences and applications be explained to the stake holders (customers, employees, marketing persons,…) so that each aspect remains manageable ?

o What is technically realized from IT point of view ?

o Are the procedures in place to cope with the cases not supported from IT-functionality ?

o What is the scope that compliance and marketing departments want to be covered ?

Summarizing, does everyone communicate on the same items ?

Symptom 2:same language, different and incomplete meaning of the term outside the country’s boundaries

The word fund means in the Dutch-speaking part of Belgium: a security representing a part of an investment fund, the same word means “any possible security” in the Netherlands.

Symptom 3: a term changes of meaning over time.

The notions of a posting in balance, carbon copy posting and double posting system, disappear, are replaced or get a modified meaning.

A posting in balance meant that the sum of the amounts on the debit side were equal to the sum of the amounts on the credit side. This meaning is nowadays often used in the sense of double posting system (one has a debit side and a credit side and that forms a double isn’t it !?!).

Carbon copy posting referred to the way of posting by which a line was filled on the customer’s or supplier’s filing card By means of a carbon, the line was copied into the journal. Periodically the totals of the journals were carried over to the general ledger accounts. E.g. the totals of the sales journal were carried over as receivables from the customers, turn-over, VAT to be paid, etc… in the general ledger accounts.

A grouping of general ledger accounts made up a balance sheet- or a profit- and loss item.

The term “carbon copy posting” disappeared nowadays due to the carbon missing.

The term double posting refers to the fact we register the transactions into journals and accounts. The totals are carried forward from the journals to the general ledger accounts. Today the double posting system gets a different meaning: often I hear you post on the debit and on the credit, so that’s a double isn’t it ? Luca Pacioli referred in his 1494's "Summa de arithmetica, geometria, proportioni et proportionalita" to the journal and accounts as double entry, the left and right side of his booklet were meant as control tools on the correctness of his postings.

Symptom 4: a term gets a different meaning depending on the background of the listeners

In IT terminology you’ll hear at many occasions (good and bad ones) the term STP (Straight Through Processing).

When a listener from the business side interpretes the term he shall think concerning a stock purchase: the purchase is billed straight on the cash account.

An IT person shall interpret the order is passed through and the details of the order are in each case stored in a database.

The expectations pattern difference between both lies in the fact the IT-person is not aware of the fact the order has to be confirmed to the customer, the order has to be passed through to the market side, the confirmation of the executions has to be catched, the taxes and commissions have to be accounted for, a statement has to be drawn of all this to the customer, the custodian of the securities has to be warned of the new acquisition and the amounts and accounts has to be passed through and that the deal has to be paid by the customer.

Such differences in expectations often have frustrations in the communication as results with all negative side effects for future cooperation.

In above example the different meaning has as basis confusion in “online” execution of a part of the process, against the sequential execution of all processes which are constituting a transaction.

Dysfunctions towards the outside world

Product descriptions are incomplete, incorrect or create unfulfillable expectations
Terminology covers different, unexplained contents: we do not know precisely what we purchase from our suppliers and our customers do not know what they exactly purchase from us
Comparisons of products between suppliers are impossible, the same goes with our customers: did you try to compare 2 energy suppliers or 2 car insurances ?
There where a control by the authorities, auditors and other mandated authorities is necessary the exact content requirement of reports is unknown
To create a catalogue “ad hoc” of complex products shall be impossible due to updated specifications and price information.
A structured transmission of product data between computer systems is not or only partly possible
Maintenance- and spare part management of material products is only fragmentarily possible. Also offices though need maintenance.
Version control of the agreement concluded with a certain customer is not automated. The content of the agreement is only manually accessible.
Processes which constitute the product are unknown
Procedures, which support the processes, are not centrally available.

An illustration of the lack of product knowledge is the following.

In a bank the securities account is a basic product.

An insurance can be linked to the securities account.

In the databases over the securities accounts we find in an entity "general data" an attribute “Insurance” with Boolean values (Yes/No)

This is an illustration of a data model giving no product information, nor process information nor procedures.

Amongst the missing product information we note:

Nature of the insurance: life or decease ? Combination life/decease ? Accident insurance ? Hospitalization insurance ? Guaranteed income ?
How high are the premium and the periodicity of payment ?
Who are the insurance company, the underwriter, the insured persons, and the beneficiaries ?
What are the insured amounts ?

As missing process information we note:

When and how can the insurance be opened/closed ?
How can the stipulations of the contract be modified (beneficiaries,…) ?
Via which channels can the above be offered ?
When and how is the insured paid out ?
When and how do the statements and payments of premiums and insured capitals occur ?

In general an answer on the question when shall be a process.

The answer on the question how will be a procedure.

Reasons

English will mostly be used in international environments.

It seems evident that a wordlist with their explanations is shared amongst the users.

Again however, this is merely missing in practice. The excuses are many, predictable (no time, money, resources) but always unjustified.

Another example of short term gains that forms a burden during the whole time span of the project.

Even when the native language is common in an organization, the explanation of professional terms is necessary.

Solution

A readable explanatory wordlist as well as a definition of terms in the databases, which enables an exchange of information between different computer systems.

What does it hold ?

In fact, a written and electronic version of a thesaurus (1)

This does not only mean a complete wordlist (of professional terms) with their meaning (lexicon (1)) and product composition but also the processes used in producing those items.

The thesaurus should contain the taxonomy of the used “things”.

Taxonomy (1) originates from the biologic science where life forms are divided according to the species.

The structure of the species, applied to products, on basis of their compositions, production methods and production factors is called taxonomy of things by subdivision in classes with a structure of sub- and super-classes.

On the highest level we will find the philosophical notion “thing”.

Examples of possible subdivisions are material and immaterial things on basis of the submission to the laws of physics. The material things can be divided into living and non-living creatures, the non-living creatures could be distinguished into individualisable items and not- individualisable. The individualisable can be distinguished into commodities, energy, transport means or other production factors…

The ontology in the thesaurus shall enumerate the properties of the species taxonomically defined and ordered. Examples are the form of a screw, the aspect of a car, the speed of a band, the color of paint, the emitter of an effect.

The exact value of the properties is not meant here. Only the property itself.

(1) The definitions used for the terms are taken from the “Van Dale” dictionary:

Thesaurus: big philological collection, a complete dictionary.

In the information application this is a broader approach than pure object oriented, business rules will be integrated

Taxonomy: collective name for categories as variety, nature, gender, family,… science of the biological systematics

In the field of information a hierarchy of objects will be created according the detail of the properties. When organizing the things one shall consider the heritance of properties of superclasses by subclasses.

Ontology: science of the common properties of things.

In the field of information management extended to the properties of objects and concepts as well as methods (verbs) that can be applied to objects, the relations between object and the limitations of the properties (data type, referential integrity,…)

Lexicon: wordlist and meaning of those words.

This is formed by the pure object structure in information management;

Concerning the method of written communication we can fall back on utilities à la Wikipedia whereby a community can contribute to the realization of a thesaurus.

More information can be found on http://en.wikipedia.org/wiki/MediaWiki.

ISO standards 10303 and 15926 cope with these possibilities on IT side with too much specification to treat here. For the moment the standards are very much focussed on the industry. Personally I try to make them extended and applied in the sector of services.