Private banks grappling with data management issues as CRS looms

September 14, 2017

Data gaps and quality issues are among the many data management challenges that private banks are grappling with as they trawl through their internal systems in preparation for the Common Reporting Standard (CRS) regime, Abraham Teo, head of APAC regulatory policy at AxiomSL, tells Asian Private Banker.

“One common theme we have noticed among private banks and retail banks is that they are facing a data problem, from managing data to capturing additional data.” Teo said. “Some problems stem from extracting data from various systems at private banks, such as truncation monitoring systems, where the same customer may be on two different systems with two different reference numbers.”

Private banks will not be simply able to reapply their technologies developed for the Foreign Account Tax Compliance Act (FATCA) to CRS reporting, according to a report by AxiomSL, which says that financial institutions will need to invest in new systems due to the sheer scale of the global regulatory framework,

“While some firms have been able to get by under the FATCA regime with minimal change to their existing [regtech] systems, the reality of CRS is that financial institutions will require a major overhaul in the way they identify their clients – since CRS, unlike FATCA, takes into account tax residency and not nationality/citizenship,” according to the report.

Furthermore, with regulators closely scrutinising institutions’ anti-money laundering (AML) procedures, Teo says that some private banks preparing for the CRS regime have sought to “bundle” both processes together.

“Once the CRS regime kicks in, private banks will also need to carry out periodic remediation regarding their HNW clients’ information and this will require ongoing monitoring,” Teo explained, adding that contrary to popular belief, FATCA and CRS preparations are not only about reporting – they require entire process revisions.

Credit Suisse, Julius Baer and Bank of China have adopted AxiomSL’s regulatory reporting solutions, according to public announcements by the tech vendor.

This article was originally published by Asian Private Banker.