With the CRS and other data exchange regimes such as the Foreign Account Tax Compliance Act (FATCA), FIs face the challenge of complying with each regime. Besides having specialised teams leading the implementation, they should look towards building flexible and robust technology solutions to meet the varied requirements of each regime.
In addition, FIs must keep a close eye on regulatory developments and ensure that they are able to put in place necessary processes and automate solutions that monitor customer data, identify reportable events and respond to authorities’ requests for information. This will significantly increase compliance costs of FIs. However, a holistic approach taking into consideration the experience learnt from implementing FATCA and Anti-Money Laundering processes, will put FIs in good stead in adopting and meeting the requirements of CRS and other data exchange regimes.
In this issue, we highlight the key aspects of CRS and how it will impact FIs in Singapore.
Banks are leveraging on stress testing to answer crucial risk management questions, such as forecasting losses and capital adequacy under stressed conditions.
Stress testing is a powerful tool that can help to see through the haze in an uncertain environment. The value derived from painting a more accurate picture of the impact of potential macro-economic shifts or black swan events, cannot be underestimated. It gives both the risk takers and risk managers more confidence in their long term decision-making. For senior management, it strengthens the necessity of risk management by magnifying potential loopholes in the business model.
Nonetheless, the full potential of stress testing to shape their business and product strategy remains underutilised.
Now is the best time for banks to embrace the full potential of stress testing for risk management and business navigation, as a step towards enhancing long-term business sustainability.
In this issue, we will look at ways in which stress testing can be enhanced to improve risk management and raise the level of confidence in business planning and forecasting.