Application programming interfaces (APIs) are the underlying infrastructure that forms the technological basis for open banking initiatives. In fact, the terms open banking and API banking are often used synonymously, which in such underlines the importance of open APIs. Open interfaces are neither new to the business world nor to incumbent banks. However, with the emergence of financial technology third parties, their innovative service offerings and recent regulatory push in certain regions towards accelerating innovation and competition, APIs have gained traction. Incumbent players in the financial ecosystem need to define their API approach; how they monitor relevant API standards is an imperative to stay competitive and innovative.
Ecosystems stellen Finanzdienstleister vor fundamentale strategische Herausforderungen. Eine neue Studie mit Finanzdienstleistern hat aufgezeigt, dass sich der Trend zu Ecosystems bereits etabliert hat und in naher Zukunft weiter an Bedeutung gewinnen wird. In diesem ersten Blog geben wir Ihnen einen Überblick über Erkenntnisse aus der durchgeführten Studie, welche wir in weiteren Blogs vertiefen werden.
The Swiss Common Reporting Standard (CRS) implementation set to change after Global Forum recommendations
The Swiss Federal Council began the consultation on amendments to the Swiss Common Reporting Standard (CRS) Law and Ordinance on 27 February 2019. The amendments follow recommendations made by the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum). The consultation period lasts until 12 June 2019 and the amended CRS Law and Ordinance are scheduled to become effective as of 1 January 2021. Read on for an overview of the most important changes.
With both FIDLEG and FINIG expected to come into force on 1 January 2020, the ancestral business of Fund Managers and Asset Managers in Switzerland will face minor material changes, while the impact of FINIG is predicted to be more significant especially for Independent Asset Managers (IAMs). A substantial reorganisation will be required in order to meet the new licensing requirements. Despite the potential benefits afforded by a long transitional period, existing IAMs are advised to consider their transformation efforts early.
In July 2017, the Chief Executive of the UK Financial Conduct Authority (FCA) announced that firms should discontinue the use of the London Interbank Offered Rate (LIBOR) in favour of overnight risk-free rates (RFRs). Although registered and administered in the UK, LIBOR is a benchmark that underpins contracts affecting banks, asset managers, insurers and corporates globally. The transition must be completed by the end of 2021, as the continuation of LIBOR will not be guaranteed to market participants after that date.
As the journey to transition away from the London Interbank Offered Rate (LIBOR) continues to move forward, supervisors across jurisdictions have started approaching institutions to gain insights into their operational readiness. In Switzerland, a wide range of products with substantial contract volume is tied to LIBOR1. This includes lending products such as mortgages and derivatives.
This is the kick-off to our new series on the Future of Private Banking & Wealth Management. In collaboration with a number of leading executives of the Swiss Private Banking sector we developed a select number of likely scenarios for the future. In the next months to come, we will publish these scenarios as well as their implications on the industry.
On 23 January 2019, the Swiss Federal Tax Administration (FTA) published revised CRS guidance notes. The update mainly incorporates previously released guidance and disappointingly only contains limited material amendments. In addition, several examples (e.g. on the identification of controlling persons) and explanations (e.g. on the wider approach) were removed, without changing the underlying rules and thus having a limited impact. Finally, a number of linguistic errors and references were corrected, one of which also resulted in a re-release on 28 January 2019. Read on for a summary of the most important changes for Swiss financial institutions (FIs).
Artificial intelligence (AI) is poised to change the way financial institutions operate. One change is that data scale will become more important than asset size in building a successful business. Another is that revenue will come not from standardization but from the highly customized products and personalized interactions that AI makes possible.
Open banking provides the foundation for real business opportunities that are tangible and disruptive. On the one hand, clients of financial service providers clearly benefit from a more client-focused approach with greater service diversification and the ability to better control their own data. On the other hand, financial service providers will be able to collect and analyse real consumer data in order to offer more innovative products and services. This has already proved particularly effective for retail banks, which are at the forefront of open banking initiatives. We have identified three areas that are currently shaping the Swiss open banking landscape: Real time sharing of account data, direct initiation of payments and real time provision of information.
In the absence of any extension, the deadline for submitting IRS Forms 1042 and 1042-S on behalf of tax year 2018 is 15 March 2019. The recent conclusion of periodic reviews of Qualified Intermediary (QI) compliance highlighted repeating issues with regards to Form 1042 reconciliation and U.S. tax reporting compliance.