Fenergo FATCA Auto-Classification accelerates FATCA compliance and reduces unnecessary client data collection
Fenergo, a leading provider of client onboarding lifecycle management and compliance solutions for global financial institutions, has today launched an enhanced version of its FATCA Compliance solution to perform auto-classification of clients identified with US indicia.
The FATCA regulations stipulate that every foreign financial institution (FFI) must undertake a search of their client base to identify clients containing US indicia (e.g. address, residency, nationality, phone number etc.) and classify each of these clients appropriately.
Built on the Fenergo Classification Framework, Fenergo’s FATCA Auto-Classification feature uses a unique combination of analytics, workflow and a classification-specific rules engine to sift through client data and documentation already held by the FFI. This information is used to pre-populate classification fields, finding the best fit for the classification in context. This, in turn, reduces the amount of information that needs to be collected from clients in the form of W-8 and W-9 forms, ensuring minimum inconvenience for clients as FFIs seek to gain full compliance with FATCA. The solution provides an audit history of manual classifications conducted previously and records the reason behind a particular auto-classification. It also schedules regular and ad-hoc reviews of clients, automatically triggering a re-classification in the event of change of circumstances data, ensuring continued compliance with FATCA regulations.
According to Fiona Cummins, Fenergo’s FATCA Subject Matter Expert, FFIs should be looking to automate as much of the FATCA compliance process as possible to reduce the cost and impact on front and back office operations. “We recently completed research which showed that 40% of financial institutions claimed that unnecessary and repeated client information requests were one of the biggest pain points in the client onboarding and ongoing client relationship processes. Fenergo’s FATCA Compliance solution reduces and even eliminates the need to collect additional data from clients by re-using existing client data and documentation already stored by the FFIs. By pre-populating classification fields with this data, it is easier to identify outstanding information required from clients.”
Cummins also claims that FATCA compliance solutions should be capable of extending to solve other classification-based regulations. “Over the next six months, we’re going to see a lot more regulatory activity taking place, which will have a considerable impact on compliance and onboarding practices. With this in mind, we developed Fenergo FATCA Compliance to be flexible enough to be extended easily to solve other classification-based regulations such as Dodd-Frank, Basel III, LEI, MiFID, FSCS, TDSI and Solvency II. These new and enhanced regulations will require identification and classification of some sort. The configurability of Fenergo FATCA Compliance will enable financial institutions to extend the rules to cover the nuances of each of these regulations,” she concludes.
Last month, Fenergo launched its FATCA Self-Certification portal, designed to streamline the collection of W-8 and W-9 forms through an online submission, reducing the time and cost to comply with FATCA rules sets.