The impact of expiring tax forms on customer experience

With customer experience a top priority for firms, they are looking for any way to improve it. However, what is the impact expiring tax forms have on the customer experience?

TAINA Tech has released a report looking into the matter.

It stated that most financial institutions rely on inefficient and manual processes for FATCA and CRS compliance, which frustrates both clients and customer service officers. Digital solutions help alleviate these challenges by giving customers improved experiences, whilst maintaining regulatory obligations.

TAINA’s report explores a recent experience someone at the company faced with their online broker.

The user had received an email from their online broker requesting a new Form W-8BEN as the existing one was expiring. In the email it stated that if a valid form was not supplied by the expiration date, the customer would be blocked from trading US securities and any of these in a portfolio would be sold – each sale came with hefty charges and FX costs.

Making the situation even more annoying, the process of completing the form was not entirely online. The customer had to print, scan and email the form back to the broker – there was also an option to send via post.

The report said, “I was taken aback by this online broker’s antiquated process for soliciting tax documentation, especially because their platform provides a first-class trading experience with investing insights tailored to my portfolio.

“Unlike me, a tax professional who knows how to complete the Form W-8BEN, most customers are unfamiliar with traditional tax forms and find them confusing and challenging to complete.”

It added that customers often resist returning tax forms due to frustrations of a cumbersome and time-consuming process on top of an already confusing task. This means financial institutions either have to chase customers or block their accounts.

Other issues customers face are delays in feedback when waiting for feedback or having to repeat the whole process if the form is invalid, it said. Sometimes they will not know where they went wrong or how to fix the issue.

“While pdf versions of forms may have been acceptable 5 years ago, today they are outdated. Customers no longer have the time or the patience to endure an outdated manual experience.”

TAINA Tech offers an automated FATCA and CRS Validation platform that improves the customer lifecycle journey at financial institutions, including online brokers. It claims clients experience 85% reduction in tax form rejection rates and customers save 63% time in completing tax forms.

The platform offers hints, tips and real-time validation checks to guide clients through forms. Tax forms can even be pre-populated, reducing scope for data entry errors and helping forms be completed quicker.

Read the full report here.

TAINA Tech secured an investment from Deutsche Bank and HSBC Asset Management’s Financial Technology Venture Capital Fund late last year.

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