Aussie RegTech firm sitting on cusp of paradigm shift in detection of global tax evasion
With the announcement of its first international deal, GCS Agile Chief Executive Officer Gerry Carcour believes the future is bright for the company that aspires to be a major player in creating a global FATCA and CRS reporting standard platform. He says the company is at the forefront of a paradigm shift in Tax Authority regulation, making the point that CRS is the first compliance regime of its kind that demands a technology solution.
“Companies who take this on manually are in for a world of pain as internal resources get pulled into dealing with this requirement, and if a strategic solution isn’t in place the first time, the issues will only compound year on year,” he says.
CRS is an inter-governmental agreement between the world’s Tax Authorities designed to detect tax evasion. It forms part of the Automatic Exchange of Information (AEOI) global standard for financial account information established to effectively tackle tax evasion while minimising costs to governments and business. Millions of businesses in more than 109 jurisdictions that manage the financial accounts of foreign tax residents must report to their local Tax Authority which in turn shares this financial information with the relevant home Tax Authority.
“With more than 200 data fields required to be completed per report, multiple databases with incomplete and duplicated data, financial institutions holding many millions of financial accounts, ongoing monitoring for any change of circumstance of these accounts that must be reported in 90 days, and a comprehensive audit trail requirement, the use of technology platforms and big data services is the only way reporting organisations will be able to manage,” says Mr Carcour.
The FACS system has the capability to run both FATCA and CRS reports, FATCA being the tax evasion detection program first set up by the United States in 2014, and the forerunner to the much larger CRS reporting network.
Vapourware abounds in the current financial service technology environment including the larger platform and service providers who have not taken the time to create a unique “purpose-built” solution. Many organisations have been caught in the mindset of trying to adapt existing software - an approach that has also been pursued by some of Australia’s largest financial institutions - and failing, due to the complexity and ongoing nuances that FATCA and CRS reporting requires.
Says Mr Carcour, “International banks can use FACS as a single platform which is a staggering productivity tool when you think of how many times an international organisation would be trying to address its CRS compliance at a local level. I’m confident the financial services industry worldwide is looking for the most efficient default solution available, and GCS Agile is in the box seat.”
As a dynamic compliance regime in which FATCA and CRS are not end-states but changing frequently, Mr Carcour asserts that service providers like GCS Agile are critically needed by financial services companies to provide the fast learning, data driven agility that’s needed to keep up with the burgeoning demand for continuously evolving regulatory compliance and transparency.
On the flip side, GCS Agile is a cost effective solution for smaller financial institutions that will never have the resources to meet compliance in their own right.
“FACS is a lifeline for these type of organisations,” says Mr Carcour. “The reality of the new digital world means that financial institutions who wish to remain focused on their core revenue-generating businesses are best served by teaming with specialist FinTech and RegTech companies to outsource the best solutions available which become the industry standard.”
GCS Agile is Australia’s leading specialist consulting group to advise companies on how to best meet their FATCA and CRS compliance obligations, and includes issues of digital strategy, taxation, and technology. As a first step, the team will produce within two weeks a Risk Assessment Report that provides full details on what specific actions a business needs to take to be compliant by July 31.
GCS Agile is also the provider of FACS, the world’s leading software platform built specifically to address FATCA and CRS end-to-end compliance, and also works in different jurisdictions worldwide to understand the nuances of Tax Authorities’ requirements for their CRS reports locally.
For more information, contact:
Chief Digital Officer, GCS Agile
+61 451 121 774
Compliance is complex and costly for the Financial Services Industry
- Compliance costs the global financial services industry over $270B annually.
- Fines alone have cost global lenders at least US$321B since the 2007-08 financial crisis.
- CBA’s AML compliance breach announced on August 3, 2017, has resulted in C-Level role changes, a greater than 10% share price drop in the month following the announcement, and a $700 million fine.
- Based on ATO published penalty rates, a breach of 10,000 non-reported CRS accounts (error rate less than 1%) by a financial institution earning more than $1 billion in revenue will be liable for fines of up to $5.25 billion.
FACS (FATCA and CRS Service)
- Complete end to end service that covers Data Preparation, Identify & Classify, Due Diligence, Reporting, and Audit.
- Highly flexible and configurable.
- Real time dashboard reporting with full work flow views.
- Complete, continuous audit trail and ongoing monitoring.
- Rapid implementation.
- ATO supported functionality and have completed ATO partner program.
- Only FATCA and CRS solution to be registered in ATO ABSIA (Australian Business Software Industry Association).