Business Process Management – Not just for the enterprise

A recent study has been carried out by IBM on attitudes to business process management (BPM). The survey, conducted by YouGov, spoke to 650 senior business decision makers from small, medium and large UK firms. One of the most significant findings was the difference in attitudes to BPM between small and large firms. The survey found, perhaps unsurprisingly, that the larger the business, the more likely they were to have plans in place to update their business processes in the next two to three years – demonstrated by 70% of those businesses with 250+ employees having BPM plans in place, compared with only 31% of those with less than 50 employees.

BPM is centred on making processes efficient and flexible in response to the company’s expansion. The implementation of faster and more effective business processes aligns all aspects of the company and, as such, usually results in improved client services. 85% of the senior business decision makers identified ‘line of sight’, ‘visibility into work occurring across your organisation’ and ‘clear understanding into how your business is performing’ as key to a business’s success. However, despite the majority believing this, very few SMEs practise what they preach as they are under the impression that they cannot afford to implement systems that aid in BPM.

Document management systems however are one means by which to create a transparent, streamlined business – a major pre-requisite for effective BPM. By consolidating all documents electronically into one central system, employees are able to access client information that would otherwise be difficult to lay hands on, and therefore deal with any queries directly. Time spent on manual processes is dramatically reduced with companies often seeing a return on their investment after the first year – challenging the wide belief that BPM solutions are only affordable to the enterprise and demonstrating real value for companies of all sizes. 

How are you handling electronic discovery for your documents for FATCA?

The U.S Foreign Account Tax Compliance Act (FATCA) comes into effect on January 1^st 2013 to combat offshore tax abuse. Those caught by FATCA may be swiped with a 30% withholding tax on U.S investment income. For understatements on undisclosed foreign (ie non US) assets there’s a further 10% to add to this.

Foreign entities can avoid FATCA’s swingeing withholding tax as they enter the FATCA regime – after entering into a binding agreement with the IRS to identify U.S persons and to report certain information about them to the IRS. This information is then used to identify potential instances of under-reporting as well as fraud.

But how is such information collected? FFIs must retain all paper and electronic documentary evidence establishing the identity of account holders for 10 years. As is to be expected records must be accurate, up to date, consistent, retained for specific periods of time, and readily available for certification and auditing purposes. And this latter point is the key – all documents must be electronically searchable. The IRS will want to be able to run some sophisticated data collection, recognition and analysis tools over high volumes of data. No more hefty physical files of information or, if you do persist with these, then they will need to be digitised. 

Because of these requirements firms will need to adapt their systems and operational processes of January 2013 – this is a significant undertaking for many organisations, least of all those with multiple customer platforms. FATCA will be applicable for all types of financial institutions – the operational system needs to be in a position to detect U.S clients at the moment when an account is opened, as well as the entire lifecycle of a client through monitoring.

The efforts needed to fulfil these obligations can be substantial for a financial institution and can require specialist knowledge and assistance – knowledge which can be aided by a supplier of such a system with an understanding of the Act itself. Some firms are even taking the view that they will no longer broker for US citizens.

Getting parochial for a moment, it is essential that organisations caught by FATCA review all their internal systems. Much of this should be in train already, but the disclosure elements and, in particular, electronic searchability/ discovery means that how firms handle, store and retrieve documents will be at the heart of this.  Discussions with a document or content management provider should be high on the immediate agenda. A good provider will be able to call on a strong understanding the act, and be able to guide the organisation through the requirements and suggest any changes which may be needed to current systems in order to meet FATCA and other compliance requirements.