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Investing in transformation: Tax trends in financial services

Deloitte interviewed 12 senior tax leaders from companies in the FS industry to learn how they are responding to changes in the compliance environment, where they are on their technology journey,  how they are restructuring the tax function, what they are doing to develop the talent they need and what they see as the future state of their department.

New organisational thinking

The organisation of tax departments within financial companies varies considerably based on factors such as legal entity structure, geographical reach and business mix. Close alignment and cooperation between tax and finance is vital, especially given the need for sharing and co-ordinating data resources.

Our Tax Transformation Trends data supports the idea of shared responsibilities between tax and finance. Respondents said that 72% of tax work by professionals is done in the tax department and 28% in other departments such as finance—often with input from subject matter experts embedded within tax.

Overall, tax leaders emphasised the increasing need to structure the tax function and define roles to encourage specialisation as the demands on the tax function evolve. To allocate resources efficiently and to find and keep appropriate talent, it is important to align employees’ roles with their strengths and interests.

The change we need, in my mind, is to separate the mandate for doing the data-driven insight work from the compliance process and technology work. I think each benefits from a very different skillset and provide a very different employee value proposition.

—Alex Goldsmith, Senior Vice President, Tax, Sun Life Financial

The value of collaboration

Tax teams in FS increasingly need to work effectively with other parts of the organisation, not just to execute on their compliance and risk mandates but also to bring greater value as advisors to the business. Tax leaders emphasised the growing need for tax advice around M&A transactions, insights about the tax implications of entity structuring, account holder reporting, new product launches and information about changing tax policies and regulations to name a just a few.

One aspect of the relationship between tax and IT, emphasised by our FS tax leaders, is the need for the tax team to bring up to date knowledge of tax technology options to the table. The relationships between tax, IT and finance increasingly demand a true collaboration that addresses the design and development of systems for the future, rather than data requests from one side and delivery of data by the other.

The importance tax leaders place on collaboration is in evidence in the Tax Transformation Trends data, with the most frequent interaction being with the finance department.

Finding and developing talent

Questions of technology and talent are increasingly intertwined. Our FS tax leaders said they want to bring people into the tax department who will take ownership of processes and tackle difficult data questions. In the Tax Transformation Trends research, data analytics, data-driven strategic insights and data management skills ranked as the top desired trait for employees, cited by 44% of respondents.

It’s not realistic to find that unicorn (a tax person with strong data scientist/technology skills). But we don’t seek to find it - we build the digital skill sets and awareness in our tax teams and we will work with external advisors and internal teams outside of tax.

—Ching Tan, Global Head of Tax, Nomura

Every tax leader we talked to described specific talent strategies, tailored to their specific circumstances. Some described a growing need to address the work-life balance of employees in the tax department, while also paying greater attention to training and advancement. Others, whose companies are mostly outside of large metropolitan areas, said that remote work had significantly shifted their talent concerns. They like how remote work has made it easier to recruit employees, but at the same time they worry it will make it harder to keep people, because employees can jump to a new employer without uprooting their lives.

Potential of generative AI

Tax generally is a conservative and risk averse function within an organisation. As a result, early adoption of generative artificial intelligence (Gen AI) technology is not a priority. Several tax leaders noted that existing technology, including machine learning and AI but not involving the newest Gen AI tools based on large language models, are already bringing dramatic automation advantages. But to be sure, everyone said that Gen AI bears watching. The potential to change tax department work processes—perhaps significantly—is on everyone’s minds.

AI isn't really a risk mitigant, but it's a way of being more efficient with the deployment of resources within the firm. Maybe you reduce headcount because you could use AI, but I don't think that's actually true. I think what that leads to is just the deployment of resources to a different type of headcount.

—Christopher Pinho, Global Head of Tax, UBS

Vision for the future

Tax leaders described how changes coming from tax authorities pull their organisations in different directions. The need to keep pace with new or quickly evolving rules can result in ad hoc processes and stopgap technology solutions, while the need for flexibility, resilience and efficiency in the longer term demands a longer-term strategic vision.

We need to be trusted business partners, adding insights to help promote the business and continuing the use of technology to enhance that opportunity as well as to boost efficiency and reduce our costs.

—Richard Hauser, Senior Vice President, Corporate Tax, Zurich

A never-ending journey

There is no doubt that the current pace of change is accelerating transformation in many companies. During all this upheaval, one thing is certain: change is never-ending. But those who adapt to and embrace this change will find their journey to full digitalisation and insight-driven compliance accelerated.

About the Tax Transformation Trends

Deloitte surveyed 300 senior tax and finance leaders at companies across a range of industries, sizes and regions to understand their future vision for the tax function and how they plan to achieve that vision. For more information and to read the report, visit

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