After five years of the US’s Foreign Account Tax Compliance Act (FATCA), financial institutions need to play the long game for future gain, according to GoldenSource’s Dev Bhudia.
Bhudia, vice president of product management at GoldenSource, wrote in an article that the challenge now is not classifying clients or managing reporting requirements, but how to make better use of the information available.
He wrote: “As a result of the initial FATCA on-boarding process, institutions now have more knowledge about their customers. This raises the question, how do the relevant parts of an organisation access the most useful insights in order to drive top-line revenue?”
Financial institutions should not be viewing regulations in isolation if they hope to find new revenue streams in customer data, he argued.
He suggested that firms have treated FATCA in the same way as other regulations such as MiFiD or Dodd Frank.
“The barrier to overcome is one of mindset,” he said.
“By by addressing these requirements individually, a firm can never truly get an in-depth understanding of their clients.”
As FATCA enters its fifth year, Bhudia warned against firms wasting time pondering what to do next.
He concluded: “It is surely high time for the market to view regulation not as a need to do, but as a long term opportunity to get to know their customers better and, ultimately, create new financial products from the data that helps to boost revenues.”
