For financial institutions, failing to comply with FATCA and CRS is not an option, but the way most KYC teams handle it is no longer sustainable.

Traditional KYC Processes Are No Longer Enough

The KYC (Know Your Customer) function remains one of the most critical and complex pillars of regulatory compliance within financial institutions. Regulations such as the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) require institutions to collect, validate, and report tax-related client data with a level of precision that is increasingly difficult to meet using traditional methods.

Despite efforts to digitize KYC workflows, many banks still rely on manual processes to handle FATCA and CRS requirements. Analysts spend hours processing PDFs, handwritten document forms, chasing missing signatures, and checking inconsistencies across client profiles. These inefficiencies don’t just affect internal operations, they also delay onboarding, increase the risk of non-compliance, and impact the client experience.

Intelligent Automation: A Game Changer for Compliance

That’s where Intelligent Automation enters the equation. Recent advancements in Artificial Intelligence (AI), Optical Character Recognition (OCR), and Robotic Process Automation (RPA) offer a breakthrough in handling regulatory workflows with speed, accuracy, and scalability. When applied thoughtfully, these technologies can transform the entire FATCA/CRS lifecycle, from data collection to regulatory submission.

OCR plays a core function by converting unstructured documents, such as scans, PDFs, or handwritten forms, into structured and machine-readable data. This allows key fields such as tax identification numbers (TINs), country of tax residence, citizenship, and dates of birth to be captured and validated automatically. OCR solutions can also accommodate multilingual input (e.g., English, Dutch, French), which is especially useful in jurisdictions like Belgium or Luxembourg. As a result, institutions enhancing KYC processes with OCR and intelligent automation have achieved cost reductions of up to 70 % in customer onboarding. By eliminating data-entry errors, reducing error correction, lowering non-compliance fines, and accelerating the process, financial institutions can significantly optimize onboarding costs.

The integration of RPA brings another layer of value by automating repetitive, rules-based tasks across the FATCA/CRS process. Bots can retrieve forms from secure email

inboxes or digital portals, extract and validate key data, cross-check client records across internal systems, and trigger alerts for missing or inconsistent fields. For instance, a bot can flag when a TIN is missing or when an address does not match the declared tax residency, tasks that previously required hours of manual review.

Once data is validated, RPA can aggregate and transform it into the XML format required by tax authorities, applying the correct schema for either FATCA or CRS. These reports can then be submitted through secure government portals, with bots automatically logging submission receipts and timestamps for full audit traceability. If issues are flagged during submission, such as invalid formatting or missing fields, exceptions can be routed to analysts with clear remediation instructions. Internal dashboards can be fed in real-time to ensure full oversight and control over the reporting process.

Even better, the combination of OCR and RPA with AI capabilities enables intelligent decision-making throughout the workflow. AI can classify entities, detect anomalies in tax declarations, and suggest corrective actions based on historical patterns or regulatory logic.

This trio: OCR, RPA, and AI, delivers what the industry increasingly calls Intelligent Automation. It offers a way to scale compliance processes without scaling teams, ensure greater data integrity, and meet regulatory deadlines with confidence.

From Proof of Concept to Scalable Transformation

As promising as these solutions are, implementing them effectively requires more than flipping a switch. Institutions should begin by conducting a Proof of Concept (POC) to test the performance of OCR and AI algorithms on real-world data and document types. It’s essential to evaluate how well these tools can handle local languages, handwritten forms, and legacy data quality issues.

Moreover, most banks still operate on a mix of legacy systems and core banking platforms. Any automation initiative must account for integration constraints and data architecture limitations. That’s why it’s crucial to design modular, API-friendly solutions that can plug into existing systems without requiring full infrastructure overhauls from day one.

In short, automation is not just about tools: it’s about strategy, governance, and change management. The institutions that take a pragmatic but forward-looking approach, testing, scaling, and integrating step by step, will be best positioned to turn FATCA/CRS compliance from a cost center into a lever of operational excellence. In an era where compliance demands continue to rise, Intelligent Automation isn’t just a technical solution, it’s a strategic advantage.

Intelligent Automation is reshaping how financial institutions approach FATCA/CRS obligations, turning fragmented, manual processes into streamlined, intelligent workflows.

At DynaFin, we help banks and insurers harness this potential through tailored automation strategies that combine deep regulatory expertise with scalable technology. By doing so, we enable our clients to meet compliance requirements more efficiently and turn them into drivers of operational excellence.