Fenergo: Financial Institutions Lagging Behind on Fatca

The report, The Road to Fatca, suggests that 65 percent of firms are hampered by gapped, siloed, semi-structured or unstructured client data.

Fatca, which came into effect at the beginning of this year, has been created to tackle tax evasion by US citizens with offshore accounts by tightening reporting requirements.

Fiona Cummins, Fenergo's Fatca expert and author of the report, says that firms who have already started preparing for the regulation are in the best position going forward.

"Some institutions have already identified serious gaps in their data that will have a knock-on effect on compliance with new Fatca regulations," she says. "Client information lying in various repositories right across the institution makes the process of identifying, classifying, evidencing and reporting on US persons or entities with account balances that exceed the Fatca thresholds exceedingly difficult."

Cummins urges those who have not yet begun to respond to the regulation to do so swiftly.

"Our advice to financial institutions is to start your Fatca journey as soon as possible," she says. "Fatca is very much an exercise steeped in data quality which can impact the ability of the institution to identify, classify and evidence clients displaying US indicia over the monetary thresholds dictated by Fatca. The sooner this is done, the better prepared the institution will be for Fatca, giving them sufficient time to gain compliance with other classification-based regulations using the same technologies".

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.