Over the past decade, banks have significantly transformed their client onboarding and reporting processes.

Much of that transformation was driven by regulations such as the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS).

For many institutions, these frameworks introduced a completely new operational reality: identifying tax residency, classifying entities, collecting documentation, and reporting financial information to tax authorities around the world.

But recently, another regulatory dynamic has started to attract increasing attention: initiatives coming from the Financial Crimes Enforcement Network (FinCEN).

And although these initiatives originate in the United States, their implications are increasingly relevant for international banks.

 

From tax transparency to financial transparency

While FATCA and CRS focus primarily on tax transparency, FinCEN’s mandate relates to financial crime prevention.

Acting under the authority of the U.S. Bank Secrecy Act, FinCEN plays a central role in the U.S. anti-money laundering framework. Its mission is to combat financial crime by strengthening AML controls and improving visibility over financial transactions and ownership structures.

Recent developments illustrate this approach. In particular, the implementation of beneficial ownership reporting requirements under the U.S. Corporate Transparency Act now requires certain legal entities to disclose information about their beneficial owners to U.S. authorities. The aim is to increase transparency around legal entities and make it easier to identify the individuals who ultimately own or control financial assets and corporate structures.

Although these initiatives originate in the United States, their implications extend beyond U.S. borders. European banks remain closely connected to the U.S. financial system through dollar-denominated transactions, correspondent banking relationships and clients holding investments or assets linked to U.S. markets.

As a result, transparency expectations related to ownership structures and financial flows increasingly extend international financial institutions.

 

Client data as the common denominator

Although FATCA, CRS and FinCEN serve different regulatory purposes, they rely on the same foundation: client data.

Banks need to be able to consistently identify:

  • tax residency
  • entity classifications
  • beneficial owners
  • ownership and control structures.

In practice, this increasingly requires coordination between teams across tax reporting, KYC, AML and financial crime compliance.

What used to be distinct regulatory exercises is gradually becoming a broader challenge around client data governance.

 

A compliance topic… but also a data architecture challenge

For many financial institutions, the complexity today is not necessarily the regulation itself.

It is the ability to build systems and processes capable of supporting several transparency regimes simultaneously.

This includes improving:

  • client data models
  • beneficial ownership identification
  • consistency between KYC, AML and tax reporting frameworks
  • governance of client information.

In that sense, regulatory transparency is increasingly becoming a data architecture challenge.

 

Looking ahead

Regulatory transparency is unlikely to slow down in the coming years.

If anything, authorities are seeking greater visibility over global financial activity.

In other words, the real challenge for banks is no longer FATCA, CRS or FinCEN individually.

It is building a client data architecture capable of supporting all of them simultaneously.

And for many institutions, that may well become the next major regulatory transformation.