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Fiserv Fatca Solution Augments Existing Financial Crime Risk Management Platform

Fiserv has added a compliance solution for the Foreign Account Tax Compliance Act (Fatca) to its Financial Crime Risk Management platform and named one of its development partners, Manulife Insurance, a global provider of life insurance and wealth management, as its first user.

Called Fatca Manager, the Fiserv solution leans on the detection, workflow and reporting capabilities of the anti-money laundering (AML) application already on the platform to deliver monitoring, control and reporting in line with Fatca requirements. Essentially, Fatca requires foreign financial institutions (FFIs) to identify accounts held by US taxpayers and report on their tax liabilities to the Internal Revenue Service (IRS).

Jeroen Dekker, senior product manager in the risk and compliance competency at Fiserv, explains: “Many financial institutions prefer decentralised client on boarding, which means first decisions on whether a client is in the scope of Fatca are made in different locations. Fatca Manager acts as a second line of compliance behind the primary on boarding process and helps a back-office Fatca team monitor, control and report required Fatca data. The solution ingests on boarding data, checks US indicia and entity classifications, identifies any gaps in the data, provides workflow and case management for remediation, and provides a final picture across the institution to facilitate IRS reporting. It also meets the Fatca requirement to search pre-existing accounts and systems to identify customers with US indicia and remediates those accounts.”

With an AML solution already in place, Fiserv had most of the US indicia data it needed for Fatca on the Financial Crime Risk Management platform, requiring it only to round out that data and ingest the outcome of the front-line on boarding process.

The company’s first user, Manulife Insurance, is an existing user of the platform, which it uses for applications including AML, sanctions, fraud and market conduct. The addition of Fatca Manager adds value to the platform and readies the firm to register with the IRS as an FFI and prepare to meet the first operational deadline for Fatca, which was recently pushed back by six months to July 2014.

On this, Dekker comments: “Now the key implementation deadlines have been pushed back, financial institutions should move quickly to take advantage of the extra time and fully define their technology roadmaps for ongoing compliance programmes.”

Fiserv has about 1,000 users of its Financial Crime Risk Management platform and expects the 100 that are not US-based, as well as new prospects, to be interested in implementing Fatca Manager. He notes, for example, a bank in South America that has implemented the platform for AML and will add Fatca Manager in a second phase.

Fatca Manager will be an additional cost for Fiserv’s existing platform users, but Dekker says: “Financial institutions often underestimate the internal cost of deploying a system, integrating it, providing training and so on. The cost of Fatca Manager is limited compared to that, making it an attractive business proposition.” With a flexible platform, Dekker also suggests the Fiserv Fatca solution could be adapted to other Fatca-style schemes that are expected to be set up by countries outside the US to emulate its tax collection effort.

In terms of competition in the Fatca space, he names financial crime platform providers such as Nice Actimize and Detica, and comments on the frenzy of activity around Fatca in the technology and consulting markets, concluding: “It is good and important that we have our first real customers on board.”

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