Formal Modeling for Financial Trading System Verification
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Solution Overview
Problem
Financial computing systems (FCSs) face challenges due to imprecise documentation in English prose, leading to ambiguity and difficulties in automatically analyzing algorithm behavior for compliance with regulatory directives, which obstructs thorough testing and connectivity verification, resulting in costly and tedious processes.
Innovation Solution
The implementation of a computer-based system using Type-system Based Modeling Language (TBML) like Imandra Modeling Language (IML) for modeling and verifying FCSs, allowing users to specify and analyze models to assess compliance with user-defined properties, perform co-simulation, and provide a graphical user interface for interaction and reporting.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If English prose is used to document FCS algorithms, then the documentation is accessible and easy to write, but the precision and ability to automatically analyze algorithm behavior deteriorates
Solution Approach 1:
The patent introduces a formal specification language as an intermediary between natural language documentation and the actual trading system implementation. This formal language serves as a precise mediator that can be automatically analyzed while still being accessible to human developers, resolving the contradiction between ease of documentation and precision of algorithm description.
Solution Approach 2:
The patent creates formal copies of the algorithm specifications in a precise mathematical language. These formal copies parallel the natural language documentation but provide the precision needed for automatic analysis, allowing both accessibility and rigor to coexist through multiple representations of the same system behavior.
2Reliability
If formal verification methods are applied to FCS algorithms, then the precision and reliability of compliance analysis is improved, but the complexity and time required for verification increases
Solution Approach 1:
The patent applies formal verification methods during the development and testing phases, before the system is deployed to production. By performing verification preliminarily, the system ensures reliability is established early, preventing costly retroactive fixes while managing time investment through phased verification rather than post-deployment validation.
3Difficulty of detecting and measuring
If comprehensive testing of FCS systems is performed, then the detection of bugs and compliance issues is improved, but the cost and tedium of the testing process increases
Solution Approach 1:
The patent replaces manual, mechanical testing processes with automated formal verification methods. Instead of manually reviewing documentation and conducting tedious test cases, the system uses automated theorem provers and model checkers to systematically verify compliance and detect issues, reducing both the complexity of the testing process and the time required while maintaining high detection capability.
Data Source
AI summary
A computer-implemented method assesses operation of a financial computing system (FCS). An assessment computer system generates code for a model of the FCS that comprises a model specification for the FCS and a model environment for the FCS. The code for the model uses a type-system based logical programming language that supports typed recursive functions. The assessment computer system generates mathematical axioms that describe the operation of the FCS by compiling the code for the model and assesses the operation of the financial computer system by analyzing the mathematical axioms.