Financial institutions (FIs) will face major challenges when preparing for the Common Reporting Standard (CRS). Among the most significant of these will be compiling and organizing their data at the risk of failing to achieve compliance and suffering from damaged reputations.
According to Corinna Hedtke, Senior Manager for Client Tax Information Compliance, Europe at Standard Chartered Bank, FIs will have be to be highly flexible in terms of the internal resources they devote to complying with the new standard.
Corinna offered this advice to delegates attending the Summit for Asset Management (TSAM) event held in in London, where she co-hosted a workshop on AEOI along with Paul Banker of Sovos Compliance, who serves as General Manager – 1099, ACA, and AEOI Solutions.
Data Will Be The Biggest Challenge
Corinna warned delegates that data represented a ‘huge challenge’ for FIs preparing for CRS in terms of collecting the right amounts of data and having key data ready in time. This challenge will be compounded for those FIs collecting data from several jurisdictions, departments and business sections, since the data may live on different systems.
Allocating the Right Amount of Resource
Given the unique nature of the CRS, Corinna believes most FIs will find it very difficult to provide an appropriate level of resources and people. Her advice is that FIs must be ‘very flexible’.
The Biggest Impact of Noncompliance? Your Reputation
In the UK, HMRC ‘has made it very clear that the right process and procedures need to be in place as well as the right governance programmes,’ Corinna said. Making senior management criminally liable under the the impending Corporate Criminal Offence will also act as a further incentive to make sure FIs fully comply with the CRS.
View the full video interview of Corinna’s advice to the industry below.
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