FATCA stands for the Foreign Account Tax Compliance Act. According to leading consultancy firm PWC – “It adds a new chapter to the Internal Revenue Code (Chapter 4) aimed at addressing perceived tax abuse by U.S. persons through the use of offshore accounts. The new rules require foreign financial institutions (FFI’s) to provide the Internal Revenue Service (IRS) with information on certain U.S. persons invested in accounts outside of the U.S. and for certain non-U.S. entities to provide information about any U.S. owners.”
FATCA was enacted by the United States government in 2010, as part of the Hiring Incentives to Restore Employment (HIRE) Act. It is an important development by the US to combat offshore non compliance. It is also being seen as an initiative that will increase compliance and transparency around US persons and assets, and hold to task those that do not meet its conditions.
FATCA applies to any individual, US or global banks and institutions, and any company or business entity that engages with US clients or assets over a certain threshold in an account. While FATCA will impact US MNCs and withholding agents, its bearing upon Foreign Financial Institutions (FFIs) will be most profound.
FATCA requires that FFIs and global banks register with the IRS and enter an FFI agreement whereby they promise to identify, collect and report information on offshore bank accounts of their US clients. Entities can register through the FATCA web portal. In order to be included on the IRS’s list of compliant institutions in December 2013, all entities must register before October 25, 2013.
What is your bank’s or organization’s role after FATCA coming into effect?
Why prepare now?
With FATCA coming into effect, it is imperative for entities that fall under the purview of FATCA to be prepared.
Many strategic and operational decisions need to be made, analysis needs to be done, and systems and controls need to be in place before applying for an agreement, in order to to ensure compliance. If no steps are taken and the deadline is missed, the 30% withholding will begin to be enforced.
Challenges faced by Banks and FFIs:
How can Newgen help you prepare?
FATCA compliance enabled Newgen’s OmniFlow Solution will assist in the identification, classification, documentation, retention, maintenance and reporting of financial information of US Persons with holdings at your Bank’s legal entities. Our solution acts as a layer on top of your core systems thereby ensuring none of your current processes are disrupted, and that our system can run fluently in the background giving you the reports you need. Newgen’s solution provides a focused workflow to bring uniformity and automation to your due diligence process, thus providing visibility and control.
Five practical issues to keep front-of-mind
Immediate: The time to act is NOW!
Name: Imroz Adeeb Bio: Imroz is Associate Manager - Corporate Communications at Newgen Software.
The nation is now geared up for another NPCI mandate i.e. ACH or Automatic Clearing House. The primary motive of ACH is to handle low value, high-volume transactions based on electronic files. Ideally implementing this mandate will allow transactions to be cleared in real-time mode rather than batch mode. This paradigm shift to Real-time mode will be a milestone for the Payment landscape in the country and mirror global standards. The scope of ACH is set to cover 82,000+ Bank Branches spread all over India.
Automatic Clearing House (ACH) payment system was envisaged in the United States during the early 1970’s. It was a result of studies conducted by the Federal Reserve and also suggested by industry stalwarts that the increasing volume of paper checks used by businesses and consumers to pay their bills would eventually exceed the ability of the existing computer systems to process and sort the checks efficiently. Hence, the Automated Clearing House (ACH) payments system was designed to allow corporations and consumers to reduce or eliminate the use of paper checks to make routine payments. As for 2011, this network processed an estimated 20.2 billion ACH transactions with a total value of $33.91 trillion.
Automated Clearing House (ACH) system is better recognized as Electronic Clearing Service (ECS) in India. ECS is currently available in around 89 centers in the country. It is operated by the Reserve Bank of India (RBI) at 15 centers and by commercial banks at the remaining centers. With the introduction of NACH or National Electronic Clearing Service (NECS) by Reserve Bank of India, the reach of the system has been further deepened and all identified core banking branches of banks are to be included as part of the upgraded system.
The Proposal
NPCI proposes to build, implement and manage an Automated Clearing House (ACH) system with built-in security features and multiple level data validation facility accessible to all participants across the country. The new centralized ACH solution or NACH is expected to consolidate the current multiple ECS systems in due course of time and provide a framework for removal of local barriers /inhibitors and harmonization of standards and practices.
The NACH platform will have national footprint which will cover 82000+ bank branches. The platform will be robust, secure and scalable with both transaction and file based transaction processing capabilities. It will have best-in-class security features, cost efficiency & payment performance (STP) for all participants. The intention is to create fully automated processes with the use of open standards and best industry practices. This will prescribe a single set of rules (Operating and Business), practices and standards which are common across the country for all Participants, Service Providers, and Users etc.
The NACH platform will support financial inclusion measures initiated by banks, other financial institutions, Government etc. by providing support to UID and Mobile based ACH transactions. The proposed system will allow member banks to design their own products and help address specific needs of the corporate world, Government and retail customers.
Objectives of NACH:
Name: Imroz Adeeb
Bio: Imroz is Associate Manager - Corporate Communications at Newgen Software.
“Consumerization of Insurance” by targeting various customer segments is the key for today’s insurance organization. As rightly pointed by Beena, in her post ‘The Role of IT in Shaping the Future of the Indian Insurance Industry’, GoI has come out with a 12 point plan to fuel growth in Life Insurance sector. I would like to bring forth few of the key points that Insurance organizations should focus on high priority.
GoI’s proposal for “Use & File” approach, being considered by IRDA, is aimed towards reducing the approval cycle for a product by IRDA. It is going to be a vehement task for Insurance firms to devise a product that is best suited for a given market segment, and stay ahead of competition. This will involve high degree of customer analytics, customer segmentation analysis & targeted promotion and customer servicing through various channels of communication. Proper infrastructure has to be in place to support such an initiative.
“Bank can act as broker for selling Insurance” – There is need for integration and automation of Insurance processes along with the banking processes to have a common infrastructure for selling insurance products and services. This will directly reduce the time for customer on-boarding by having an automated and shared infrastructure between the banking and insurance divisions. Such integration would enable usage of bank KYC as a valid proof of document for issuance of policy to customers, resulting in faster & easy acquisition.
Horizontally, there is push by the GoI as well as the industry for banking and financial services to penetrate in the rural population. “Rural Insurance” is one such area. Rural areas in India are still far away from digitization and lack infrastructure. e-Mobility solution is one of the technology advancements that most of the Insurance organizations are looking forward to employ, such that their agents are well equipped to capture, acquire & process customers’ data, while being on-the move and enable for shortest possible time for policy issuance.
With its proposed plan and changes in regulations, the GoI aims at the betterment of the Indian Insurance industry, and the reach of insurance services to the uninsured rural population. Organizations need to adapt to newer technologies to provide better services and meet the demands of customers and regulators. They need to have intelligent and integrated platforms for Customer & Data Analytics, Social Media Integration, Capturing & Managing Enterprise Content (in any form), Automated Business Process (not only intra-organizational but inter-organization too), Mobile applications and integrated customer communication through various channels.
Newgen has continuously worked towards aligning its solutions with the current needs of its customers. Newgen provides an Intelligent Business Process Management platform, that allows for data processing from multiple channels on the fly, enables data analytics in real time, captures and assesses trends by integrating with social media, and provides real-time communication based on customer profiling.
Name: Benjamin
Bio: Benjamin is Sr.Manager - Products & Solutions at Newgen and part of Newgen's Center of Excellence for Insurance vertical.
The insurance sector as we all are aware is crucial for the country’s economic development. India serves as a huge market due to its significant untapped potential.
With the Government’s recently announced 12-point action plan for Insurance, the benefits to the company and policyholders will make Insurance more fundamental and relevant.
The focus on the customer oriented business model will further drive Insurance companies in embracing the emerging technologies. Due to the data-intensive nature of the industry, primarily because it involves collection, processing and maintaining of information relating to insurance policies, IT will continue to act as a critical enabler. In the volatile insurance environment where insurers introduce recurrent changes in process model, product design, IT has helped to gain through web-based, online, front-ending improvements for efficient selling, analysis and decision making. Technology investments will be crucial in the dynamic insurance environment not only to serve the competitive edge but also to maintain the regulatory obligations and hygiene required.
Name: Beena Manoj Simon
Web Site: http://www.futuregenerali.in
Bio: Beena is Senior Manager - Project Management & Operations, at Future Generali India Life Insurance Co.
The latest development which promises to transform UAE’s payment landscape is the CBUAE’s initiative to introduce the UAE Direct Debit System (UAEDDS), which will provide a safe and convenient method of making recurring payment transactions for utility services, card payments and loan repayments, etc. With the clock ticking for the advent of the UAEDDS, Newgen is all set, with its enhanced payment suite, to help banks prepare to meet the challenge.
Newgen Software Technologies Limited has been present in the UAE banking marketplace for long, as a leading technology vendor, and has partnered with many banks, finance houses and corporate houses for implementing world class payment and banking automation solutions. A leading solution provider in the payments landscape, Newgen has implemented Electronic Fund Transfer (EFT) solutions and Image-based Cheque Clearing Systems (ICCS) across the Indian Sub-continent, the Middle East, Africa and the SEA regions. Newgen has also been engaged in the various DDS seminars and discussions conducted by the Central Bank so far. Newgen’s solution for Direct Debit payments provides a unique opportunity for banks in the UAE to opt for a world class, cost-effective and ready-to-use product for handling the DDS mandate.
With the objective of addressing every aspect of the Direct Debit system and its implications to banks, service providers and consumers, Newgen is hosting the ‘Next Generation Payment Systems’ Seminar to in Dubai on Tuesday, August 28, 2012.
The seminar is being held to present Newgen’s vision of a unified payments hub for banks, along with:
Who Should Attend:
Seminar Leaders and Speakers: Thought Leaders and Solution Experts in Payment Systems
The session will be followed by networking drinks and dinner. With a nearing deadline for the introduction of the UAE Direct Debit System (UAEDDS), banks need to assess the adaptability of their existing legacy systems to the requirements of the new payment system. Newgen believes that such an event will help banks to exchange views with industry experts, explore automation of error-prone processes, and efficiently manage electronic fund transfers, while reducing their operational expenses.
Name: Amandeep
Bio: Amandeep handles the pre-sales operations for payment solutions in Newgen, including ICCS and Direct Debit products.
Islamic banking (or participant banking) is a type of banking system that complies with the principles of Shariah law. Islamic banking works on the basic premise that Shariah prohibits the fixed or floating payment or acceptance of Riba or Usury (specific interest or fees) in financial transactions. Also, Islamic banking prohibits investments in businesses that provide goods or services considered contrary to Islamic principles. Such investments are deemed Haraam (sinful).
While the basic tenet of Islamic Banking – the outlawing of Riba, is a term whose application is rarely found beyond the Islamic World, however many of its guiding principles have found a more universal audience. The reason for this boils down to the fact that a majority of these principles are based on simple morality and common sense, which is a common platform for most world religions, including Islam.
The Holy Quran clearly mentions about prohibition of Riba. The following verses can be taken as a reference.
The Quran – Surah 02- Al Baqarah, verse 275:
“Those who devour Riba will not stand (especially for judgement before Allah) except as stands one whom Satan by his touch has driven to madness. That is because they argue: “Business and Riba similar to each other.” But Allah has made “business” Halal and He has made ‘Riba’ Haraam. Those who after receiving this warning (concerning the Haraam of Riba) from their Lord, (now) desist (from Riba), may keep whatever they had previously earned (as Riba); and their case (will now be judged by) Allah (alone, i.e. the Islamic State will not deal with that matter); but those who return (to Riba even after this revelation of the Quran) are companion of fire (of Hell); they abide therein (forever).”
Islamic banking first appeared on the global map as active player, over three decades ago. Today it is being proclaimed as one of the fastest growing and reliable financial systems in the world. However, it would be a gross discourtesy to limit its influence to just a few decades, for the principles on which Islamic Banking is based on, have existed and influenced monetary markets for centuries.
Name: Imroz Adeeb
Bio: Imroz is Associate Manager - Corporate Communications at Newgen Software.
We live in a world of ‘instant noodles’, ‘home delivery’ and ‘short attention spans’. Customers have developed an insatiable need for products and services that provide “instant” gratification. It is not surprising then that companies around the world are tailoring their offerings to cater to this evolving trend.
One of the most important touch points between a company and its customers is Customer Service. It plays a major role in defining customer experience. Therefore, it cannot remain immune to these changes, especially since customer service in most verticals is highly document intensive and process cycle times take multiple days.
The primary challenge faced by customer service/field executives in delivering effective customer service is getting paper documents from the point of initiation to the actual processing center. This is true for verticals like Banking, Telecom, Healthcare and Logistics. Typically the information is captured on a physical application form, submitted to a branch from where it gets couriered to the processing center and then finally gets processed. Improper filling, missing supporting documents, loss in transition add on to the turn-around-time for the process. Capturing information at the Point of Customer Contact and initiating its processing in real time is a challenge both in terms of time and cost.
There is a dire need for a tool or technology that can bridge this gap between service delivery timelines and customer expectations. One avenue that gives some reason to cheer about is the tremendous strides that mobile technology has made over the years. For the customer service industry, this opens up several opportunities, some of which if absorbed into its processes, can yield very encouraging results.
One such innovation is ZapIn – a Mobile Capture solution and one the latest product offerings from Newgen Software. It comes in the form of an enterprise app that is pre-loaded on a smart phone or tablet. It is a revolutionary technology that allows the business executive to capture physical application forms and supporting documents along with the key metadata. The advanced imaging capability of the solution allows the field executive to capture documents remotely and instantly initiate its processing at the back-office. The captured documents are compressed making it feasible for them to be transferred over a GPRS/EDGE/3G data connection. Given the potential this technology holds, it is bound to become pervasive in verticals where quick retrieval and transfer of data and images are business critical components of customer service.
Mobile capture is a way to boost the energy level and excitement around a technology that has clear business value. For users such as banking/insurance/logistics executives and other on-the-move professionals, it will allow them to do their jobs better and more efficiently. The technology will give a major boost to the green initiative by reducing the demand on replication of paper. The growing stature of Cloud services and more technical advancements in imaging/scanning tools in mobile devices will further propel the growth of this technology.
The future of the mobile capture market, even from the most conservative of perspectives, is going to be huge. It may not skyrocket to instant fame but slowly and steadily it will fulfill its vast potential. The growing affordability of smart phones and tablets will act as a catalyst for the adoption of this technology solution. Above all, it will depend on organizations that are smart enough to embrace and implement this technology and derive measurable business benefits.
Name: Imroz Adeeb
Bio: Imroz is Associate Manager - Corporate Communications at Newgen Software.
In my previous article, titled ‘From Banks to Financial Supermarkets’, I have mentioned about the strategies banks are following these days and projecting themselves as financial supermarkets- one stop shop for all financial needs; be it opening of CASA, home loan, personal loan, credit card, bank assurance, or mutual funds.
There is one more way of looking at the term “Financial Supermarket”. The word Supermarket signifies multiple products from multiple brands made available under a single roof. Now let’s see how the concept of Supermarket translates to Financial Services. A Financial Supermarket means all financial products from different vendors made available under the same roof. Today’s customer is very aware and makes his financial decisions after evaluating several options. He may want a credit card from one bank and an insurance solution from another. In such a case to get a complete control of a customer’s portfolio or to create a loyal customer base, a bank can tie up with other Financial Services vendors and earn huge commissions. For e.g. XYZ, a leading bank in India, that offers all banking products ties up with ABC Insurance Company and adds ABC’s products also in its portfolio. Following a similar approach, a bank can tie up with several financial services vendors. This will not only add variety to the banks portfolio but also result in increased revenues.
However, to adopt this concept of Financial Supermarkets, banks need to have a very strong back office, or a ‘Process Factory’- BPM platform above Core, which can take the entire processing load from the front office staff, thus giving them an opportunity to concentrate on sales and customer service.
Name: Neeraj
Bio: Neeraj Koli is part of the Global Business Development team at Newgen, and is responsible for the APAC Banking market.
With increased focus on transparency, compliances and better services within a specified period of time, more and more government departments are realizing the need for investing in their IT Infrastructure. Government departments, specially the customer centric ones, such as Transport, Health, Passport, and MNREGA, are constantly faced with an uphill task of managing huge volumes of documents and processes. These departments need a system that can help them deliver citizen centric services to the people at a faster pace, with improved transparency and accountability.
Large public sector enterprises have already taken steps towards embracing e-Governance and Digitization. There are examples of organizations such as DMRC – very recently they have adopted a SaaS-based Document Management System, seeing digitization as the need of the Hour.
There are multiple other examples where Newgen has helped organization such as Council of Scientific and Industrial Research, Department of Scientific and Industrial Research, Gujarat Industries Power Company Ltd, Madhya Pradesh Transport Department, Estate Office Chandigarh, Gujarat State Fertilizers and Chemicals, LIC of India, and many public sector banks to realize their objective of a ‘Less Paper Office’ through its award winning end to end document management and process automation solutions.
If technology has enabled us to go paperless and achieve better governance there is no reason why organizations should not go with it.
Name: Neeraj Bio: Neeraj Koli is part of the Global Business Development team at Newgen, and is responsible for the APAC Banking market.
Last night I participated in a webinar titled “Banking Transformation Needs Smart Automation”. The webinar highlighted BPM and ECM as catalysts for financial services transformation and how business benefits could be accrued from their implementation. The speakers included Derek Miers, Principal Analyst of Forrester Research and Mridul Sharma, Senior Vice President, Solution Delivery Team, IndusInd Bank and Ritesh Verma, Head, CoE Banking Practice.
Mr. Derek Miers talked about “Driving Transformation in Financial Services.” He began by stating that most organizations today are in the midst of one of the most disruptive shifts in economic history. The shift has been from producers and those who hold capital to consumers. Consumers he said had a plethora of choices today and even more so in the finance and banking industry. He went on discuss the gradual transition from the way banking services were delivered on paper to the 360 degree approach that is followed today. He stressed on the fact that since customers had so many choices, the greatest differentiator was how customer experience was delivered to customers. If customers were dissatisfied, they would invariably jump ship. To keep in tune with customer needs, organizations had to evolve and transform themselves. Mr. Miers spoke about how processes were at the center of this transformation from Traditional Line Management to Processes and Services Management. He argued that this did not warrant a Band-aid approach where specific systems or parts of the organization were changed but more like a “Wellness Program” which brings overall vitality, rejuvenation and business transformation. He felt that customer centricity should become the default behavior of the organization and especially its front line.
This approach reminded me of the term “Big Process” that I read in an article by Connie Moore titled “Embrace Big Process Thinking” where she said, “Big Process is when senior-most business and technology leaders embrace business process change by shifting the organization’s focus from isolated BPM and process improvement projects to a sustainable, enterprise-wide business process transformation program that is then supported and driven by top executives.” I think this aligns perfectly with what Derek was trying to explain.
Derek went on to elaborate on how organizations should build their transformation plan by focusing on outcomes and working backwards to the processes it needs to deliver that outcome. He concluded by highlighting that organizations should look at this as an opportunity to shine and take the lead rather than waiting for change to happen.
Mridul Sharma then took the speaker’s role and discussed how Newgen’s BPM solution helped the bank to improve processes, reduce turn-around-times, foster transparency and lay the foundation for a paperless and green office.
Ritesh Verma concluded the presentation session by discussing Newgen’s capabilities in BPM and ECM and stressing on how Newgen is in the business of transforming banks. He went on to point out how Newgen has become a key enabler for fast growing banks. He also enumerated the company’s achievements in the BFS industry and its pedigree of 850+ installations across 45 countries. He concluded by showcasing the number of clients Newgen has worked with and how it has helped 119 banks across the globe to achieve their business goals.
The webinar was wrapped up by a Question and Answer round where participants interacted with the key speakers.
Name: Imroz Adeeb
Bio: Imroz is Associate Manager - Corporate Communications at Newgen Software.
RSS
Back to top
Recent Posted Comments