The Challenge of CRS and FATCA Compliance
For banks in Latin America, staying compliant with the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) is no small task. These regulations require financial institutions to report account details of certain clients to tax authorities, adding layers of complexity to their operations.
A major Panamanian bank saw this challenge firsthand. Initially, FATCA reporting was manageable since it only applied to US clients. However, when CRS was introduced, the bank had to expand its reporting significantly, covering a much more significant portion of its customer base. This shift made their existing compliance process slow, resource-heavy, and prone to errors.
Beyond meeting regulatory requirements, the bank also recognized the importance of maintaining transparency and trust with its clients. Finding a better way to manage CRS and FATCA reporting became a top priority.
The Cost of a Manual Compliance Process
Before automating, the bank relied on a fully manual reporting process. A team of ten people from different departments worked together to collect and verify client data—a process that took months.
Most of these employees weren’t compliance specialists, so they had to undergo extensive training. Even then, mistakes were common, and fixing them required painstaking client-by-client reviews. This approach wasn’t just inefficient; it put the bank at risk of missing deadlines or submitting inaccurate reports.
It quickly became clear that this way of handling compliance wasn’t sustainable. The bank needed a solution that would reduce manual work, minimize errors, and improve efficiency.
Automating Compliance with Trans World Compliance
To streamline its reporting, the bank implemented Trans World Compliance’s CRS/FATCA One—a tool designed to automate compliance and eliminate manual bottlenecks.
One of the most immediate benefits was automated error detection and correction. Instead of spending weeks reviewing reports manually, the system flagged issues instantly, cutting down the time needed for verification.
Additionally, the software provided a centralized data management platform, ensuring all information was up-to-date and accessible. This simplified the reporting process while improving accuracy.
By adopting automation, the bank didn’t just comply with CRS and FATCA—it transformed the way it managed regulatory reporting.
Cutting Reporting Time from Months to Days
The results were significant. What previously required ten people working for three months could now be handled by one person in just five days for FATCA reporting.
While CRS reporting improvements weren’t specifically measured, the bank saw similar efficiencies. With fewer people tied up in compliance tasks, resources could be redirected to other critical areas, improving overall operations.
Beyond saving time, automation also reduced costs. The bank cut labor expenses and minimized the need for error corrections. Instead of struggling with compliance, it could focus on strategic goals.
Improving Data Quality for Long-Term Compliance
Even with automation, the bank knew that data quality was key to compliance. During the transition, they identified missing information—such as addresses and cities—that needed to be updated to ensure complete and accurate CRS reports.
Rather than waiting for audits or penalties, the bank took a proactive approach. They launched an initiative to collect and verify missing data, reinforcing their commitment to accuracy and regulatory compliance.
By addressing data gaps early, the bank strengthened its compliance framework, reducing risks and ensuring smooth future reporting.
A Roadmap for Other Latin American Banks
This bank’s experience highlights an important lesson: compliance doesn’t have to be an operational burden. Financial institutions can simplify reporting, reduce risks, and save resources with the right technology.
As regulations continue to evolve, more banks in Latin America will face similar challenges. Investing in automation isn’t just about avoiding penalties—it’s about improving efficiency, reducing costs, and ensuring long-term compliance.
By embracing innovation and focusing on data accuracy, banks can turn regulatory challenges into opportunities for growth. The future of compliance is about more than just meeting requirements—it’s about making smarter, more strategic decisions.
If your financial institution struggles with CRS and FATCA compliance, it’s time to move beyond manual processes. Trans World Compliance’s CRS/FATCA One can help you reduce reporting time, minimize errors, and streamline compliance—just like it did for this Panamanian bank. Don’t let compliance be a burden. Contact our team today to see how automation can simplify your reporting and keep your institution ahead of regulatory changes.
