If your financial institution operates accounts for customers that reside in foreign countries, it may be subject to the Foreign Account Tax Compliance Act (FATCA), Crown Dependencies and Overseas Territories (CDOT) reporting standards, and/or the Common Reporting Standard (CRS). In an effort to improve financial transparency (and ultimately to increase tax revenues), governing bodies have implemented new reporting requirements — calling for more robust, detailed, and accurate information — that financial institutions must adhere to, or face fines and loss of business. These organizations must collect, combine, and reconcile data in various formats from multiple sources to remain compliant. However, a recent Aberdeen survey finds that only 44% of filings today are accurate. In spite of that, 64% of respondents feel that they are significantly prepared to handle FATCA. This is false confidence, partially attributable to the fact that many of these organizations have not had to face penalties. This is a case of out of sight, out of mind. Unfortunately, these organizations are only delaying the inevitable. Research has found that, on average, respondents have had 6% of their gross proceeds withheld due to non-compliance issues over the past two years, and this number will only increase as more organizations come under fire. This 6% greatly reduces margins, sometimes leading to millions of dollars in losses.
Can your organization afford to lose out on these profits? Of course, not. To avoid these pains, top performing financial institutions have implemented Automatic Exchange of Information (AEOI) solutions to better manage their data in preparation for filings.