Online Know Your Customer (KYC) Remediation Platform
Foreign Account Tax Compliance Act (FATCA) – Case Study
FATCA was enacted in 2010 by the United States Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. FFIs are encouraged to either directly register with the United States Internal Revenue Service (IRS) to comply with the FATCA regulations (and FFI agreement, if applicable) or comply with the FATCA Intergovernmental Agreements (IGA) treated as in effect in with over 110 jurisdictions.
FATCA requires FFIs to comply with a detailed and complex set of requirements including customer due diligence for existing and new customers and financial reporting on certain account holders, where aggregate balances in reportable financial account products exceeds the reportable thresholds to domestic tax authorities, which under reciprocal IGA’s, will be shared with the U.S. IRS.
In complying with FATCA requirements, FFI’s are required to undertake customer and account level segmentation and perform internal and external data searches in an attempt to classify the account holder for FATCA purposes. Despite best efforts to achieve this systematically, it is inevitable that many FFI’s will have to contact account client’s directly to obtain a self-certification, essentially a declaration of their tax residency status.
In many cases, FFI’s have tens of millions of customers and even more actively held accounts and even if <0.5% are identified as potential U.S. account holders, even a subset of these that are unable to be identified systematically presents a major challenge to obtain this self-certification manually, which is where the Online KYC Remediation Platform can deliver huge time and cost savings by automating this process.
How it works – complete FATCA KYC remediation in 5 easy steps!
We have a comprehensive library of FATCA forms, the example below is taken from the Financial Services Council (FSC) / Financial Planners Association (FPA), which is the default industry standard in Australia for AML and FATCA.
From the form library, business account users can download the file schema relevant to the selected form to be populated from core banking systems to capture known information from clients, such as their full name, date of birth and address details.
The information that is uploaded into the CSV form will be automatically be populated in the respective form using the Batch process within the Administer section of the ezyKYC Remediation Platform.
Prior to distributing the populated form business account holders can also create a customised email template which is allocated a unique reference identifier, to be populated in the ‘FormID’ field of the CSV file prior to uploading, which will automatically send the populated PDF file with the allocated email template to the end customer.
Business account users can differentiate the customised email templates for different customer types, different form types or different stages in the process, for example, once the form has been reviewed and approved, or alternatively a standard rejection email notification template, which rapidly accelerates the KYC remediation process.
All forms that have been returned to the requesting company will be directed to the Review folder, where the company can review and either approve the form which is the end of the process or alternatively they can reject the form, giving a reason and returning the form using a pre-configured email template.
Business account holders can view the real-time operational dashboards which provides meaningful insights on remediation activities at different stages of the life-cycle, which are fully drillable to reveal the KYC forms underlying each segment of the dashboard.
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The ezyKYC Remediation Platform is powered by FormsBox (c) 2012-2018.