Banks are expecting more countries to require them to send details of their citizens’ overseas accounts.

The US Fatca regulations, which took effect in July this year, require financial institutions in participating countries such as Bermuda to feed US tax authorities seeking tax dodgers with information on the holdings of Americans.

While Fatca has added to banks’ heavy and growing compliance burden, the industry anticipates more of the same to come, in the opinion of EY expert Hank Prybylski.

Mr Prybylski, New York-based financial services advisory managing partner for the global professional services firm, visited the Island last week, for talks with top bankers and regulators.

“The US may be first to the gate, but this type of reporting will be a standard requirement in a short amount of time,” he told The Royal Gazette in an interview.

Transparency requirements on banks are burgeoning, with Fatca adding to Know Your Customer rules and anti money-laundering and anti-terrorist financing regulations, for example.

“Transparency is a trend and more of that is coming,” Mr Prybylski said, adding that this created opportunities as well as challenges for banks.

“If you accept transparency is a trend, then you have to think, how do we do this not just for Fatca, but also to know our own customers better?”

Chris Maiato, Bermuda-based principal, advisory services for EY, who oversees the firm’s “BBC” practice, which includes Bermuda and the major Caribbean financial centres such as Cayman, British Virgin Islands, the Bahamas and Barbados, said Bermuda banks had been very proactive in working out what Fatca meant for them and their customer base.

“Common reporting standards are the next big wave — not just reporting to the US, but to other jurisdictions as well,” Mr Maiato said. Bilateral agreements between the US and other governments, requiring a reciprocal sharing of information, have led to Fatca being used as a blueprint for other countries, while an OECD (Organisation for Economic Cooperation and Development) paper suggests that other will adopt a similar approach, Mr Maiato said.

Many countries were looking offshore to pull in some badly needed extra tax revenue, he added.

Regulation is one of five major forces driving an ongoing transformation of the banking sector, according to EY’s global banking outlook (2014/15), entitled ‘Transforming Banks, Redefining Banking’. The others are customers, technology, competition and society.

Customers expect more from their banks and want customised products as well as seamless transition between channels, according to the report. Cyber security is also of huge concern.

“Social media is changing people’s expectations,” Mr Prybylski said. “This is creating an opportunity for the banks who get it right.”

Technology is driving change in several ways — banks’ siloed legacy systems are having to be overhauled to adapt to the increasingly digital business environment; the growing storage and analysis of information in the phenomenon known as “big data”; and disruptive technologies adding to competition for banks.

Peer-to-peer lending and other forms of “shadow banking”, as well as online only banks, are utilising technology to create a new breed of competitor, unencumbered by the cost of running bricks-and-mortar branches or dealing with legacy regulatory or technological issues.

According to EY, society is driving change through shareholders demanding new business models to deliver sustainable returns, while banks struggle to embed cultural and behavioural changes after the damage done to trust in financial institutions by the global financial crisis.