The global tax landscape and the banking and capital markets industry are both in a state of rapid and constant change primarily as a result of a more global and technologically-advanced world. These changes directly impact the function and expectation of a tax department. Is your business equipped to handle the challenges of 2020? If not, does your tax department know what it needs to do in order to optimise its function in 2020?
In order to be effective in the future the tax department needs to assess its current state and develop an expectation and vision for the future.
We believe that the organisation of a typical tax team will be very different in 2020. The role of the tax department and the expectations for how the tax department delivers its service will both be different. Tax departments are facing new rules, new risks, and new expectations.
The tax operations will shift from spreadsheet-based and disconnected from the main financial systems into a more technology driven function that is integrated – expect that almost all routine tax reporting and compliance will become automated. This automation is needed to meet the growing compliance burdens, enable companies to expand their businesses in many jurisdictions, to manage risk, but also become a baseline expectation.
Effective use of technology will free up tax professionals to provide a more value added and strategic role for the organisation and enter into an era where tax expertise has never been more critical. As this happens, do you have the right type and number of personnel in your tax department? Tax departments of 2020 needs to be able to leverage technology, processes and people in order to extract data in a tax-ready format. We believe most senior tax professionals know this but have run into barriers in transforming their tax function.
As your company redefines its business model, proactively responds to external pressures and reacts to global changes (such as the UK’s vote to exit the EU) the use of tax department by the broader organization will change. Have you started to consider possible future needs and what gaps your tax function may have?
It is impossible for the tax function to start the transformation process alone. It needs support from the broader organisation. The tax function will need to ‘make its case’ and be prepared to answer why and why now? This is not an easy task for a company in the banking and capital markets sector that is facing an endless array of demands. To meet this challenge, start now.
Six Priorities for Success in 2020
- Proactively manage risk, regulation and capital
- Establish stronger culture and conduct
- Redefine the business model
- Strategically renew the operating model
- Enable innovations, and the capabilities to foster it
- Obtain an information Advantage
Download the report here.
19th Annual Global CEO Survey/February 2016
In this year’s survey, global business leaders voice fresh concerns about economic and business growth. At the same time, they see a more divergent and multi-polar world where technology is transforming the expectations of customers and other stakeholders. In ‘Redefining business success in a changing world’, we explore how CEOs are addressing these challenges. We surveyed 1,409 CEOs in 83 countries and a range of industries in the last quarter of 2015, and conducted face-to-face interviews with 33 CEOs.
Key findings in the banking and capital markets sector
Banking and Capital Markets (BCM) organisations are facing the immediate challenges of economic and political uncertainty and the longer term impact of new technology, more exacting regulation and shifting customer expectations.
Some long-established business models are struggling to sustain competitive relevance in the wake of these developments. In turn, new entrants are changing the competitive playing field and blurring industry boundaries. But today’s market shake-up also opens up significant opportunities for reinvigorating growth and re-engaging with customers, employees and society as a whole.
In this report, we explore some of the key challenges and opportunities that are reshaping the BCM industry, focusing in particular on how to sustain returns in the face of uncertainty and change; how to navigate industry transformation and how to respond to changing customer, investor, employee, regulator, tax authority and other stakeholder expectations. We also look at how to define and measure success in this changing landscape.
If you are interested in reading more, please access our full report on the banking and capital markets sector “Creating a platform for competitive regeneration” here.
To see all results of the 19th Annual Global Survey, please visit http://old.pwc.ch/ceosurvey
We believe that capital markets in 2020 will look very different than they do today. Based on feedback from clients, many have gloomily predicted a shrinking capital markets landscape, overregulation and the fall of traditionally powerful financial centres such as London and New York. However, we have a different vision for 2020 – one of a new equilibrium. This new equilibrium consists of a traditional financial axis of power further solidifying their positions at the top and the world seeking stability and predictability in the context of riskier and more uncertain geopolitical situations. In addition, much of the landscape where financial institutions operate will change significantly. This change will come from economic and government policies, innovation, operational restructuring, technology, from smarter and more demanding clients, companies harnessing powerful data and from continued growth of the shadow banking system.
Read more here.