How managed services can benefit tax and finance functions
Helping reduce tax and compliance requirements of banks, managed services provide the freedom to focus on priorities.
A bank’s support functions have many similarities, but each is unique in its own important way. Tax, finance, risk and compliance all demand constant rigor, high levels of accuracy, and a winning combination of talent and technology.
At the same time, banks have to fight to keep pace with increasingly complex regulation and governance requirements, coupled with the acceleration of technology and a highly fluid workforce. Banks’ investment – both in time and money – in acquiring advanced technology and talent to run their support functions efficiently is relentless.
This continuous effort to keep up has led to support functions sitting firmly in the crosshairs of cost management. As a result, banking leaders who are seeking new ways to reduce the cost pressure of their support functions are increasingly turning to external service providers to help carry the load.
Managed services can lift the requirements of non-core but critical activities, such as tax and finance, and is an alternative way for banks to increase operational resilience while curbing costs. Crucially, it gives banks the freedom to grow and perform.
The pace of change affecting tax and finance functions, which has only been increased by the impact of COVID-19, means banks cannot afford to postpone transforming these functions if they want to boost operational resilience and create greater value for their organizations. An EY survey highlighted that 73% of respondents said they are more likely than not to co-source some critical activities in the next 24 months to add value, reduce risk and decrease cost.
Recently, one global bank decided to collaborate with the EY organization to improve the performance of its tax and finance function, to pursue greater value in the bank’s front-end operation.
From the outset, the EY teams understood that for their relationship with the bank to work, it needed to clearly outline how managed services could not only reduce the cost pressure of the tax and finance functions but do so in a way that would improve the bank’s risk profile, transparency and governance model.
Trust between both parties has been fundamental to this ongoing collaboration, especially since the outbreak of COVID-19. The unforeseen impact of the pandemic has accentuated the need for a strong virtual working relationship with the bank, to help enable stable business continuity planning for the months ahead.