The advent of globalization has paved the way for financial institutions and consumers to do banking on a global scale. However, financial translation has become imperative for handling financial documents and reports. It requires solid translation skills to ensure data accuracy, timely processing, and regulatory compliance.
Unfortunately, banks and financial institutions face challenges translating documents for foreign clients. That’s why some go as far as hiring translation services. But how do you go about addressing these?
Fret not; this page covers five translation challenges in the financial industry you ought to know. Read on to earn some practical solutions for mitigating such risks and ensuring accuracy.
Five Challenges in Financial Translation (+Practical Solutions)
Translation services are prevalent across different industries, and the financial sector is no exception. Banks and financial entities perform these critical tasks or hire service providers to do the job for them.
Verified Market Research reported that the global translation service market is projected to grow from $39.37 billion in 2020 to $46.22 by 2028. It’s forecasted to achieve a compound annual growth rate of 2.07%.
According to the same report, the financial and banking industry was the second largest market in 2020, next to the legal sector. Other segments that employ translation services the most include the medical, tourism, and travel industries.
Despite the industry’s booming market, banks and financial institutions face many challenges in financial translation. However, they must address them to avoid legal and regulatory consequences. As such, they go as far as hiring translation services with financial and legal backgrounds.
Below are some financial translation challenges to prepare for and best practices to consider.
1. Language Nuances and Financial Complexity
Translation in this sector can be complex due to language nuances. For one, think of translating idioms and colloquial expressions frequently used in financial contexts. Likewise, consider symbols and abbreviations in different countries and languages requiring keen and careful interpretation. Interpreting financial data can be complex and tedious.
Solutions:
- Hire translators with expertise in both language and finance.
- Orient and train translators on financial jargon and terminologies.
- Offer language learning programs to familiarize with idiomatic and colloquial expressions.
- Stay up-to-date with the financial market changes and industry trends.
2. Linguistic and Cultural Differences
Ryan Hammill, Co-Founder and Executive Director of the Ancient Language Institute says, “Banks might encounter translation challenges due to linguistic and cultural gaps. Financial concepts and terms often don’t have direct equivalents in other languages. Cultural norms also affect the interpretation and reception of content.”
Financial translation is more than just interpreting data; it involves cultural sensitivity. For instance, Asian countries might have a different retirement outlook, so translating financial data requires understanding their culture.
Solutions:
- Orient translators on financial terms and concepts of specific languages.
- Understand the local market to tailor financial translations to a particular region.
- Localize financial content to fit the clients’ preferences and expectations.
- Ensure cultural sensitivity in communication for language services such as translation.
- Outsource translation services and employ local employees with financial backgrounds.
3. Legal and Regulatory Compliance in Financial Translation
Unfortunately, banks or translation service providers confront the challenge of complying with several requirements. However, they must strictly adhere to laws and regulations to avoid financial losses and legal ramifications.
According to Jesse Galanis, Content Manager at Tech Lockdown, “Translation service providers must stay on top of data privacy and protection. They must also ensure financial data accuracy. Lastly, they should guarantee the time sensitivity of data processing. These three factors can guarantee full legal and regulatory compliance.”
Solutions:
- Employ translators with financial backgrounds and train them on relevant laws and regulations in the financial sector.
- Protect and secure sensitive financial information, such as personal consumer details, bank account numbers, and financial transactions.
- Ensure the precise translation of numerical information in financial documents, such as currency amounts, interest rates, and stock prices.
- Enter and process data as promptly as possible since doing so can impact financial reporting, forecasting, and decision-making.
- Set robust quality assurance (QA) processes to verify the accuracy and ensure compliance.
4. Source Ambiguity and Inconsistency
Nothing can be more challenging than translating ambiguous and inconsistent data sources. Financial translators might find it hard to interpret unclear texts, poorly written content, pixelated images, or muffled audio.
Inconsistent language usage across financial content also adds complications to the entire process. Both can lead to inaccurate translations and incoherent financial content.
Solutions:
- Ensure constant communication with clients to understand the context and intent behind the original content.
- Require sending back ambiguous and inconsistent financial documents instead of processing them.
- Establish communication channels with financial experts to seek clarification on ambiguous sources of financial data.
- Set QA audits in place to review translated financial data or content.
- Leverage Computer-assisted Translation (CAT) tools that store previously translated content to ensure consistency across all processed documents.
5. Specialized Knowledge of the Financial and Legal Industry
Aside from translating the language itself, translators must interpret numerical figures as well. As they deal with complex terminologies, they must uphold data accuracy, and ensure regulatory compliance. As such, they require special skills and financial backgrounds for translations.
Further, financial data often intertwine with legal language. Translators must have expertise in both areas to understand complex financial contracts and adhere to regulatory frameworks. For instance, translators must possess financial and legal knowledge of credit repair to interpret and prepare financial documents for clients.
Solutions:
- Hire translators with bilingual proficiency in finance and legal terminology.
- Train newly hired employees on the translation process, related laws and regulations, and best practices vital to operations.
- Develop comprehensive glossaries and style guides specific to the financial sector to ensure consistency and uniformity.
- Offer translators continuous professional development and learning opportunities in financial and legal matters
- Involve subject matter experts (SMEs) in the financial and legal industry.
Final Words on Financial Translation
Financial translation is imperative for financial institutions doing business with foreign clients, whether banks or consumers. The goal is to ensure 100% data accuracy, timely financial processing, and full regulatory compliance. Non-adherence to laws and regulations can lead to financial losses and legal implications.
As such, consider the six translation challenges encountered in the financial industry. More importantly, follow our practical solutions for mitigating these financial risks and achieving data accuracy. Ultimately, banks should stay on top of their document translation process to avoid monetary losses and gain financial boost!
Author Bio:
Catherine Schwartz is a HARO outreach manager and content creator. She’s passionate about writing and staying on top of ever-evolving topics related to her area of expertise.