The report by Fenergo, titled ‘The Road To FATCA’, is based on a survey that was conducted with financial institutions running the full spectrum of financial services, including investment, corporate, retail and private banks.
The report has revealed that the biggest impact of FATCA will be felt in the area of customer due diligence or know your customer processes, since 79% of institutions were found to be expecting FATCA to have either a high or medium impact on CDD / KYC processes.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Speaking about the findings, the author, Fiona Cummins, Fenergo’s FATCA Subject Matter Expert said: "Our survey points to some good news and some bad news. It’s heartening to note that some financial institutions are making real progress in certain areas like client identification and classification, with up to two-thirds of responding institutions claiming to have already commenced these processes."
"However, some institutions have already identified serious gaps in their data that will have a knock-on effect on compliance with new FATCA regulations. Client information lying in various repositories right across the institution makes the process of identifying, classifying, evidencing and reporting on US persons/entities with account balances that exceed the FATCA thresholds exceedingly difficult," he added.
According to the survey, 30% of FFIs expect between 5% to 49% of their client base to have to complete self-certification, 17% expect over 50% of their client base to complete it, 53% anticipate less than 4% of their client base having to self-certify that they are or are not US persons/entities, while up to 42% of institutions are either using or plan on using an online portal to collect W-8 and W-9 forms.
Meawhile, they have recommended a four-point plan for financial institutions beginning their FATCA journey that includes: using FATCA as a stepping stone to other classification-based regulations, trying to create links between client data and documentation already lying in various repositories, using the data to pre-classify clients to reduce the number of clients that will have to be contacted for self-certification and automating as much of the process as possible, using this opportunity to collect additional data pertaining to other regulatory obligations.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
