In 2019, Nissan Motor Company paid a $15 million fine to settle charges with U.S. regulators. While the core issue revolved around underreporting of executive compensation and fraudulent practices, part of the regulatory scrutiny focused on discrepancies in the translations of financial documents.
Inaccuracies and omissions across language versions led investors to misjudge the company’s true compensation practices. What might have seemed like technical translation details became evidence in a major financial scandal.
This was obviously a complex case that hinged on much more than just a few linguistic errors. Still, it points to a deeper truth: as financial services become increasingly global, the stakes for accurate translation have never been higher. A misplaced decimal, a cultural misunderstanding, or an ambiguous term can result in regulatory violations, financial losses, and eroded trust among professionals.
What could go wrong?
Picture this: a British investment firm wants to become active on the French market because it has identified interesting growth potential in the heart of Europe. To expand, the company needs to translate various documents from English to French, including a 110-page prospectus, quarterly investor reports, marketing materials, and several risk disclosure documents. With the help of an LLM and an internal employee who speaks French, the company chooses the fast, cheap option. This allows them to be highly ambitious and enter the market in three months.
This may seem like an incredibly bold decision, but the company’s reasoning is not entirely illogical:
- both French and English are well-established languages in international finance;
- since these are major European languages, it is assumed that LLMs have had no shortage of data to train and learn in both of them;
- and last but not least, the colleague speaks French fluently and is not unfamiliar with financial jargon (albeit mainly in English).
So, dear reader, what could go wrong?
As it turns out, quite a bit. Take, for example, the translation of the prospectus, which repeatedly refers to the fund’s investment in “equity” positions. This was translated as “actions”, the typical French term for stocks and shares. However, the company’s fund structure also includes preferred shares and other equity-like securities. In French financial jargon, these distinctions are significant, with “titres de capital” or “instruments de capitaux propres” being more accurate.
Another translation error was caused by a so-called false friend, namely “billion”. The LLM kept the word in the French translation, and the internal translator walked straight into the linguistic trap. The word “billion” in French is actually a “trillion” in English, while the correct French translation should have been “milliard”. The difference is rather significant because it turns £1,000,000,000 into £1,000,000,000,000.
These are just two examples of the various errors that occurred in the translated documents. French regulated investment documents require precise terminology when dealing with, for instance, historical performance information. The precise wording is of utmost importance to the AMF (Autorité des marchés financiers), something neither the standard LLM translation nor the internal proofreader took into account.
From easy & cheap to cumbersome & expensive
Soon after launching their marketing campaign, the British company faced the consequences of its translation errors. Take the billion/trillion mix-up, for example. The French investment teams understood that this was a translation error. Still, it nevertheless raised concerns about the company’s attention to detail and, more importantly, its affinity with the French market. If these “basic” language errors cannot be avoided, how can they ever gain a foothold in France?
However, making a less-than-stellar impression is still relatively harmless compared to the problems that can arise when the AMF gets involved. If their personnel identifies compliance issues in the company’s documents, it could constitute a violation of the French requirements for fund documentation. This, in turn, marks the start of a tedious and complex review process in which all of the company’s activities must be halted to fix problems in the documents. What started as an easy, cheap solution has turned into a cumbersome, expensive process.
Four cornerstones
This is a fictional scenario, but it is based on actual and factual events. Financial translations can never be given the standard treatment; each document and context is different and therefore requires a different approach.
On some levels, financial translation differs fundamentally from other forms of translation. It requires navigating complex regulatory frameworks, maintaining mathematical precision, and understanding how financial concepts vary across cultures and legal systems.
Here are the four cornerstones of every proper financial translation:
- Terminology precision: Financial language is riddled with technical terms that often lack direct equivalents across languages. For instance, a “bond” in English encompasses various instruments that separate terms in other languages might distinguish. A term such as “equity” can mean ownership stake, fairness, or net asset value, depending on context. Financial translators must understand the financial concepts these terms represent.
- Regulatory compliance: Each jurisdiction has specific requirements for how financial information must be presented. What constitutes adequate risk disclosure in one market might be insufficient in another. Financial translators must ensure that documents comply with local regulatory standards while maintaining consistency with the source material.
- Cultural and contextual nuances: Different markets have varying attitudes toward risk, different conventions for presenting financial data, and different expectations regarding transparency. An accurate translation might still fall short if it doesn’t resonate with the target audience’s financial culture.
- Technical formatting: Date formats, number separators, currency conventions, and accounting standards vary globally. A simple oversight, such as confusing European and American conventions for decimal points and thousand separators, can transform 10,000.50 into 10.000,50 or worse. This, in turn, might lead to a complete misinterpretation of financial figures.
Want to make sure that these four cornerstones are safeguarded in your financial translation projects? The fact that you’re on ELAN Languages’ blog page is a great first step in the right direction.
Bridge to better translations
In today’s business world, both speed and precision are of the essence. ELAN Languages is able to tackle both by offering you the perfect mix of technological understanding and financial know-how.
Let’s start with the technological aspect. Can AI be a part of the solution you need? Of course! It has amazing potential, but not every LLM or machine translation platform will be equally suited for your documents. With ELAN’s AI Bridge, you can select and use the right technology for your content. Properly customised, with expert prompting, and it takes into account your terminology, style guides, translation memories, and the specific requirements of the project in question. We select the right AI tool to ensure the best possible outcome for each financial translation project.
Next is the expertise. We have a vast network of financial translators who feel right at home in the world of finances. These specialists can post-edit your translation to ensure that your documents will never cause compliance issues or financial ambiguity. They deliver the highest quality every time.
Your financial data = priceless
Last but certainly not least, the importance of protecting your financial data. Using standard and/or free AI tools poses serious risks to the security of your most precious information. ELAN Languages operates on secure platforms that adhere to the highest standards (ISO 27001), ensuring that your content never leaves your organisation’s infrastructure and ecosystem.
Confidentiality is always a primary concern at ELAN Languages. We protect your financial information through stringent protocols and procedures. On top of that, all our translators must adhere to confidentiality agreements, ensuring your documents remain secure throughout the translation process.
In our next blog post, we will delve deeper into a real customer case in which our AI Bridge achieved remarkable results without compromising on quality or security. It’s definitely a fascinating financial translation. In the meantime, you can count on us (pun intended) for all your financial translation needs or queries.
Get in touch
In need of an impeccable financial translation? Do you have any questions regarding our AI Bridge and what it can mean for your multilingual financial documentation? ELAN Languages offers translation solutions for all types of financial documents, including annual reports, compliance documents, financial statements, investment research, bank documents, insurance policies, and more.
Get in touch with Valerie Kerten: valeriekerten@elanlanguages.com – +32 11 49 04 68. She will answer all your financial translation questions and can also provide you with a no-obligation quote.