Designing Financial Data Architectures

Chapter 3. Foundations of Financial Data Modeling

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In the previous chapter, we clarified the essence of a financial data architecture: a blueprint designed to impose structure on the inherent complexities of financial data management. But how do you begin to bring that blueprint to life? The first step, the foundation of it all, is financial data modeling. It is both an art and a practice that every financial data architect and engineer must be familiar with.

In this chapter, you will build a solid and comprehensive understanding of the foundations of financial data modeling. We will cover what financial data modeling is, the diagramming tools needed to visually represent a financial model, the lifecycle of financial data modeling, and a brief overview of financial data lifecycles. The concepts you learn here will provide the foundation for the more advanced techniques explored in Chapter 5. Let’s get started!

What Is Financial Data Modeling?

Before we define financial data modeling, let’s briefly clarify what traditional data modeling is. To this end, ...