Bancolombia Extends AxiomSL Solution to Fatca Reporting

Bancolombia has extended its engagement with risk and regulatory reporting solutions provider AxiomSL for reporting under the US Foreign Account Tax Compliance Act (Fatca).

Colombia's largest bank by assets and equity partnered with AxiomSL in spring 2014, and has since deployed its regulatory reporting application. The bank will roll out the Fatca solution on the same infrastructure, says Jaime Alberto Villegas Gutierrez, vice president for service delivery and customer experience at Bancolombia.

This will cover initially Colombia and offshore units in Panama, Puerto Rico and Cayman Islands.

Fatca requires financial institutions to report the details of their US clients, to prevent US citizens from hiding taxable revenue in offshore havens.

For Bancolombia, which has grown over the years partly from acquisitions, the regulation represents a particular challenge.

"We have multiple product applications from which we need to extract data for Fatca reporting," says Gutierrez.

"The AxiomSL solution gives us a platform that connects easily with our product applications, and given that it has embedded the due diligence and reporting templates, all we need to do is focus on the integration of our platforms with AxiomSL."

He adds that having a single platform allows Bancolombia to set up the same business processes across the bank's multiple locations.

AxiomSL CEO Alex Tsigutkin explains: "Our Fatca platform provides flexible implementation architecture that allows us to host multiple countries in one system. We also have the capability to install the solution separately, in different countries, if required."

The solution's workflow automation allows for data preparation across multiple countries and consolidates CRM and other systems, as well as the ability to perform complicated indicia searches, including an owner calculation, "which is crucial for Fatca reporting standards", adds Tsigutkin.

Fatca and analogous initiatives in other jurisdictions require firms to streamline CRM systems and processes, redesign client onboarding procedures and rethink how investor information should be collected and processed, says Tsigutkin.

"Another challenge is the 'centralization versus localization' of the data, because many countries do not allow client data to cross international borders. Even if we host different countries' data on the same system, it might require different data processing and filing procedures.

"Considering the added complexity of the common reporting standard, financial institutions should not try to quickly integrate and centralize the data or systems. The data models should be flexible so they can address change in one country's regulation without impacting the processes of other countries."