• Skip to primary navigation
  • Skip to main content
  • Skip to footer
The Evolution of ESG RegulationThe Evolution of ESG RegulationThe Evolution of ESG Regulation

CUBE global

  • Products
        • RegPlatform product overviewOur enterprise product, providing regulatory intelligence for large, global financial institutions looking to tackle complex compliance.
        • RegAssure product overviewOur highly intuitive, seamless compliance product, that grows with your small or medium sized business.
        • CUBE's technology
  • Solutions
        • PrivacyGlobal governance for data privacy regulations, the world over
        • RecordsHolistic oversight of ever-growing regulations for records
        • CybersecurityAutomated workflows for up to date, relevant data on cyber
        • Technology riskEffective policies and controls to mitigate technology risk
        • Financial crime and AMLWatertight audit trails to show risk-based rationale
        • View all solutions
  • Resources
        • Resource hubLifting the lid on financial services, compliance, and regulation
        • Read

        • Case Studies
        • Blog posts
        • Reports
        • RegNews
        • Brochures
        • Find

        • Compliance Corner
        • Compliance confessions
        • ESG Conference
        • CUBE’s regulation game
        • Listen

        • Videos
        • Webinars
        • Podcasts
  • Partners
        • Advisory and consulting partnersEnhance your regulatory compliance offering with the entire suite of CUBE regulatory data.
        • Integration partnersCompliance is complex enough without over-complicated integration procedures.
        • Technology partnersAdd value to existing customer applications with a unified window into regulatory intelligence.
        • Partners overview
  • About us
        • About usThe story of who we are, how we got here and why we’re exceptionally proud of what we do
        • TeamThe visionaries and leaders powering CUBE’s success
        • NewsThe latest news from CUBE
        • CareersOur movement to transform regulatory data into regulatory intelligence
        • ContactWant to know more? Get in touch
  • Request a demo
Customer login
Home » Resources » Ontology: how does it work for regulatory compliance?

Estimated reading time: 2 minutes

What is an ontology, and how does it work for regulatory compliance?

With the rapid evolution of technology, historical concepts like ‘taxonomy’ and ‘ontology’ have taken on new meanings and hold almost infinite potential for artificial intelligence and machine learning.


Taxonomy and ontology are essentially members of the same family – they have similarities and differences but are ultimately intrinsically linked.

What is a taxonomy?

A taxonomy is a way to classify hierarchical relationships between things in the same class. It is a hierarchical structure of parents, children, grandchildren etc. It delineates a hierarchical relationship going down a tree or up a tree of concepts within a group. Taxonomy is used, particularly within financial services regulatory change management, to represent lists of things that have a hierarchical relationship. It is relatively rigid in structure and typically only allows for an up-down movement.

What is an ontology?

An ontology, on the other hand, enables you to generate and maintain relationships of many types and between different objects. It is more flexible and allows for more complex, deeper, and sideways relationships between different projects and different classes.

Where a taxonomy is used primarily to represent hierarchical relationships and only hierarchical relationships between entities, an ontology allows for you to generate many more different types of relationships, where you can define and manage within the W3C semantic framework and Web Ontology Language (OWL) or its variants.

How does ontology benefit regulatory compliance?

Historically, banks have chiefly used taxonomy in their regulatory change management processes. Typically, financial institutions generate, build, and maintain a number of taxonomies that represent how their business operates. These are then held in a master-spreadsheet or databases.

This system becomes labor-intensive without the use of ontology. When a new regulation, rule or guidance is published there will typically be an impact assessment. It goes through a process where humans are tagging or analyzing or assessing that piece of regulation and mapping it against any number of existing taxonomic elements. This is traditionally quite a manual process, done by experts in the field of compliance, and is often a very repetitive, time consuming and costly exercise.

Much of this time-consuming, labor intensive work can be streamlined with the introduction of ontology mapped over existing taxonomies.

The introduction of ontology ‘levels-up’ regulatory change management processes. With an ontological framework, a financial institution can integrate multiple taxonomies, maintaining and defining additional relational information.

The addition of ontological elements means that when a regulatory change occurs, it only needs to be mapped to one element – for instance – one policy or one control. And then the ontology will do the rest of the inference work for you.

The result? Reduced time spent on impact assessment, reduced potential for human error and increased efficiency.

Find out more about CUBE’s Ontology here.

Related resources
View all articles
A man in a suit leaning on a large percentage sign.
Compliance Corner

What is STIFC?

Lightbulbs
Compliance Corner

Fintech vs Regtech: what is the difference?

Image shows a hand at a cash machine, typing in their pin.
Compliance Corner

What is the Bank Secrecy Act?

All about the California Consumer Privacy Act
Compliance Corner

California Consumer Privacy Act 2023 Update


Want CUBE updates and latest industry news sent straight to your inbox?

Footer

Add CUBE logo here

  • Products
    • Partners
    • Solutions
  • Resource hub
    • Blogs
    • Reports
    • Brochures
    • Compliance Corner
    • Webinars
    • Podcasts
    • Videos
  • Behind CUBE
    • About us
    • Meet the team
    • Careers
    • News US
    • Contact us
  • The legal bits
    • Privacy policy
    • Cookie policy
    • Terms of use
    • Accessibility
Follow us:
  • LinkedIn
  • Twitter
  • YouTube

© 2023 CUBE Content Governance Global Limited

  • English
  • US