US Foreign Account Tax Compliance Act (FATCA) is in force now and financial institutions across the globe are focused on complying with this regulation. Introduction of FATCA has initiated a global program, the ‘Automatic Exchange of Information’ (AEOI). Over 80 countries have so far signed to adopt similar FATCA agreements to share client information between each other using the OECD’s Common Reporting Standard (CRS). This will place an even greater burden on the financial services industry where firms will now have to undertake even greater client KYC due diligence and reporting requirements.
This mandate poses the following challenges:
- Data Quality and the lack of unique customer data across LOBs.
- Complex rules for different jurisdictions, Validation rules keeps changing based on the jurisdictions to report.
- Shorter Deadlines for implementation.
- Complexity of identifying transactions for Withholding and Pass thru payments calculation.
So, what should a Financial Institution do now? For all those FIs with risk of withholding, they must deal with FATCA first on a priority. Those FIs who are already FATCA compliant or in an advance stage should consider future proofing in terms of CRS and now is the time to act.
What we offer – TRAC
Tech Mahindra in partnership with Dion Global Solutions have developed TRAC that enables Banks and Financial institutions to overcome the challenges arising from FATCA, CRS and similar regulations. TRAC is a one point solution for regulatory compliance and can be categorized into the following main blocks:
- Firm's FATCA & CRS compliance checks
- Client data management and FATCA/CRS eligibility
- Account remediation and classification
- Withholding tax management (if required)
- Reporting to IRS, fiscal authorities, clients and MIS
- Integration layer to receive and send data to internal systems such as KYC or core processing systems
Value we offer
- Quick implementation of changes across diverse KYC systems
- Organisation wide conformance to regulatory guidelines
- Complete solution for single entities, multi-entity with a “Lead FFI” and service provider “Elected FFI” scenarios for U.S. and Non- U.S. firms
- Includes Client classification, Remediation & Certification, Withholding Tax information, and IRS, local tax body and client reporting
- Provides accurate data and a consistent approach for management decisions from the project outset through the various compliance program phases
- Can be deployed by module to avoid redundant efforts and thus achieve cost optimisation.
- Provides the ability to be compliant to regulations without substantial changes in the existing systems, EDP and process architecture
- Future-proof: Easily adaptable for future regulatory changes
Why Tech Mahindra?
- Proven global experience - Proven FATCA implementation experience in major regions including Europe, Middle East, Asia, Australasia and North America
- Consulting, FATCA & CRS COE to bring in the required experience to streamline the roadmap towards FATCA & CRS compliance path
- Experience in Peripheral services around FATCA – Due diligence, Data Management, testing and hosting & managed services
- Tech Mahindra BPO arm to manage your entire FATCA & CRS Reporting process from business processes through to IT solutions to the final submission of reports to the regulators.
Further information on how to achieve FATCA compliance or if you are already FATCA compliant, how to upgrade yourself to be CRS compliant and leverage your organisation’s FATCA compliance solution to reduce OECD CRS compliance impact, please contact a member of our team below