In a matter of weeks, the deadline for FATCA compliance will pass. The July 1st finishing line, which once seemed a distant prospect, is fast approaching, and most banks are gearing up for their final sprint. While our last bloglooked into how banks might drive revenue opportunities from FATCA in the future, the immediate concern for data managers is the practical steps they should take right now to be ready. As the deadline draws closer, it is important to step back and take a look at the big picture, rather than falling into the trap of a compartmentalized view of data requirements.
Many institutions run their FATCA project within their client data team, which focuses on collecting information on customer background and activity. This is all well and good given the extensive FATCA focus on customer information. But, it is equally important the security master team isn’t left on the periphery. FATCA compliance, while heavily reliant on client data, also places significant requirements on the security data team, for the purpose of determining which instruments and which types of cash flows should be subject to withholding under FATCA.
It’s important that managers of all critical data sets come to the table early in the FATCA project, so all the affected areas – both client data and securities data teams - understand the nature of the requirements which impact them, and the context of what is required and why it is so important. The client data team and security master team must work together to meet the regulators’ requirements. If one or the other team is brought into the project late, banks’ efforts to comply on time will fall by the wayside.
So FATCA presents a dual challenge to data managers. They must not only collect and standardize the immense quantities of data required, but also – and perhaps most importantly – they must realize that these requirements cross multiple data sets. The only way to approach the July 1st deadline is to take a three-hundred-and-sixty-degree view of compliance, customer data, securities data and more. The banks that don’t streamline security and client data could yet stumble at the final hurdle.
Stephen Engdahl is senior VP of Product Strategy at GoldenSource. Steve is responsible for defining and articulating the company's global product strategy, aligning the company around opportunities to increase clients' value, product experience, and return on investment.