Pneuron and PwC Tackle FATCA and Big Data Problems
Pneuron Corporation has teamed up with global consultancy and accounting firm PwC US to provide the financial services marketplace with a new distributed technology platform to handle the terabytes of big data involved with regulatory reporting. The first incarnation of their work will be to help financial firms comply with the Foreign Account Tax Compliance Act (FATCA). Other initiatives down the road addressing big data scenarios will include cross-referencing new legal entity identifiers with other ITs and preventing fraud and anti-money laundering activities. Big data, a loosely defined term, is used to describe datasets too large and too complex that they become hard to work with using on-hand data management tools.
To be implemented beginning January 2013, the legislation allows the US Internal Revenue Service to penalize foreign financial firms who don't sign a deal with the Internal Revenue Service to become "participating foreign financial intermediaries" and track down U.S. persons living overseas who might just be evading paying their fair share of U.S. taxes.
Pneuron's platform manages data sources in multiple data applications in a more efficient and cost effective manner than consolidating the data and running queries against it. As a result, financial firms can offer regulators as much information as possible on the securities they trade and process and the counterparties and clients they do business with in close to real-time.
"We can take data from data sources and legacy technology and make them globally available, reliable and interoperable with any other source or technology," says Simon Moss, president of the Boston-headquartered Pneuron which gives firms a faster cost-effective way to report information and create new products, “We offer much more leveragable use of legacy technology, technology that is often isolated in diverse, under-utilized silos. This fundamentally changes the playing field of enterprise business competitiveness."
In the case of FATCA, as part of reviewing pre-existing accounts a foreign financial institution will generally be required to electronically search multiple systems for indicators of U.S. status. Pneuron's platform can be used to tie together data from these disparate sources without requiring physical consolidation of data or multiple individual searches, says Moss. As a result, the time and cost of the initiative is reduced. He declined to provide specifics saying it depends on the number of affiliates involved and the number of accounts which must be searched.
"Our clients are facing escalating costs and risk as they try to bring together a range of proprietary and competing data and information silos to comply with increasingly complex business and regulatory challenges,” says Steven Crosby, PwC Americas wealth leader in a statement. “This new platform will pave the way for operational efficiencies and better business intelligence while helping institutions more effectively manage their risk and compliance obligations."
Written by Chris Kentouris, Editor-in-chief (Chris can be contacted through Chris.Kentouris@hotmail.com)