Leading Financial Institution Shares AEOI Compliance Best Practices

This blog was last updated on June 26, 2021

In September, we held an exclusive AEOI networking event in New York City, where we brought together representatives from the IRS, leading financial intuitions and other industry practitioners all in one room to discuss the importance of syncing tax compliance and tax operations in light of the latest updates in Global Information Reporting. With expectations of CRS complexities tremendously outweighing FATCA challenges – and with little time left to prepare – we sat down with the VP of regulatory support at one of the world’s leading financial institutions to discuss best practices for Automatic Exchange of Information (AEOI) Compliance. Here are the key takeaways:

• Think Long-Term.  If you want to keep improving each year, you’ll want to invest in an AEOI solution that is scalable – working with you as a long-term partner, rather than just getting the job done now. Since tax reporting is a necessary cost of doing business, working with a solution provider that will help ease the process based on learnings from the previous year – and helps standardize processes so that they become more effective than before – will deliver much more value in the long run for the money invested. In addition to maintaining compliance, there is an opportunity to go beyond what you “must do” and deliver greater value back into the business with a building block approach to obtain greater efficiencies.
• Prioritize Efficiencies. Efficiencies can increase ten-fold with an automated centralized solution that handles customer data updates on top of daunting processes like staying updated on deadlines. For example, customer data is collected and then necessary reporting is determined for each individual. As customer data is updated and transactions are appended, greater concerns arise about the reporting transmissions (XMLs) also being updated properly. With FATCA, and CRS in particular, an automated centralized solution eliminates internal and manual data management – but it also helps financial institution’s become more efficient in reducing errors by sharing the risk.
• Ensure Customer Confidence. Your internal records and controls are key to reporting, which is why selecting a reliable end-user solution is critical. While customers may not initially be comfortable giving certain information, it is a financial institution’s job to maintain their confidence that their information will only be shared with the proper authorities – and only when they really need to see it. With an AEOI solution, the centralized data tremendously supports this effort in customer relations. While eliminating the risk of fines and penalties is a priority, ensuring that customers are comfortable with providing their data and that they understand why it’s needed is most important. In addition, the centralized approach helps financial institutions avoid having multiple lines of business request the same information from customers over and over – which can diminish confidence.
• Partner with Sovos. As one of the very few solutions willing to take on FATCA, CDOT and CRS, it is evident that Sovos prioritizes its customers’ pain points on a personal level above the technology alone. In fact, the development team continuously builds out product enhancements based on end-users’ input and preferences. Our customers find it refreshing to work with a true partner in tax compliance that aims to help improve their processes and mitigate the challenges that keep them awake at night, beyond solely providing the technology to support their needs.