Using formal verification to develop higher assurance, more maintainable financial software

Manfred Kerber, Colin Rowat and Neels Vosloo
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Manfred Kerber: CTO and Co-founder, fovefi, UK
Colin Rowat: CEO and co-founder, fovefi, UK
Neels Vosloo: Head of EMEA Regulatory Risk, Bank of America, UK

Journal of Risk Management in Financial Institutions, 2019, vol. 13, issue 1, 35-46

Abstract: Formal verification — a sibling of artificial intelligence — uses computers to prove that a design — whether hardware, software or a mathematical proof — is correct. As such, it offers higher assurances than testing, which cannot provide guarantees beyond the test data. As formal’s cost comes down, it is spreading beyond its roots in computer hardware and aerospace software into consumer technology and finance. This paper surveys successful use cases outside finance, as well as more recent applications to finance, including by industry leaders such as Bridgewater and Goldman Sachs.

Keywords: financial software; SR 11-7; formal verification; provable security; model risk; functional programming (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2019
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