GBA Ambitions Highlights Global Opportunity for Tech-Driven EPM Sector – Entica™
The much anticipated plan for the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) was announced in 2019, outlining a crucial national economic development strategy for China.
The GBA initiative represents a world-class city cluster that the Chinese Government hope will become a globally competitive, connected, and innovative mega-region by 2035. With a GDP of $1.68 trillion already, and comprising a leading technology and manufacturing hub in Shenzhen, the financial dominance of Hong Kong and the trading capabilities of Macao, there is every reason to believe the experts asserting that the GBA could become China’s answer to ‘Silicon Valley’.
As the GBA develops and continues to leverage its scale and comprehensive capabilities, there is potential for a burst of innovation- breaking new ground for enterprise R&D, talent pool, and technology ecosystem in the region. Companies will be on the lookout for innovation in all facets of their business, and will want to know what the benchmark is- and adopt it. The desire for businesses to compete technologically extends to many different internal functions, particularly those with relatively repetitive and tedious processes that could have a serious impact on the company – such as directors’ liabilities or major reputation consequences. Chinese businesses are starting to place a greater focus on Entity Portfolio Management (EPM), with many looking to implement technology and connectivity between internal departments within their companies – such as tax, finance and HR departments- to not only speed up the pace of business, reduce costs and minimize manual mistake but also to improve risk mitigation and enhance control through transparency.
The need to centralize a company’s EPM workflows to make more informed decisions is even more pronounced when accounting for regional complexity. In our first annual Mercator Entity Management (MEM) report, we saw that APAC has on average 50% more activities per entity in comparison with Europe. This is due to a higher number of filings with regulatory authorities and updates to internal registers required in the region, especially where local company secretaries should be mandatorily appointed. Moreover, while the region was found to have the lowest overall-event driven activity duration and cheapest average fees per activity, this obscures the diversity of the Asian jurisdictions, containing six of the most expensive jurisdictions (China, Taiwan, South Korea, Japan, & Indonesia), and six of the cheapest (Sri Lanka, Malaysia, Australia, Philippines, Singapore, and Hong Kong).
The traditional way of managing corporate secretarial duties is no longer “sufficient” for the increasing complexity of regulatory compliance. Many companies manage EPM the same way they did 15-20 years ago but the industry has evolved. While many are trying to set up an internal system or methodology, often ending up using excel or share sites, this results in extra administration burdens and human errors. However, subscribing to an external software might not be necessarily justifiable on a regional basis and comes with a series of factors for consideration. Therefore, our tech-driven EPM infrastructure (combining both knowledge management and automated process best practice) is becoming increasingly popular.
Entica™ was built to meet the unique needs of our clients – to support both their ambitions and needs. The platform mitigates the disconnect between headquarters and subsidiaries, giving HQ the insight and oversight they need. Entities have often been considered ‘black boxes’ to parent organisations, with fragmented, non-standardized documentation and data, problems of access, and regional technological variation creating inefficiency and opacity for the governance professionals who manage them. For many companies, HQ may not know who is doing what, how they are doing it, and lack the data to contextualize performance and optimize their entities processes.
Entica™ is a powerful, secure, and comprehensive platform, available 24/7 and built to solve these problems. In its original iteration, Entica™ focused on a robust reporting cube into entity workflows- capable of providing both high-level, macro insights into the processes of the full portfolio, and granular information on the performances of individual entities and processes. Global compliance calendar, project overviews and spend analysis are just a few samples of reports that became a daily tool for corporate secretarial professionals and enabled them to maintain control and insight over even the smallest aspects of their entity portfolio.
Designed to evolve as our clients’ needs do, the most recent major update introduced a new interface and authorization model, as well as adding request functionality and partly automated workflows, that link clients directly to the Mercator client service team. The update also introduced a module for recording key subsidiary information, such as directors, capital, shareholders etc., and storing corporate documents. With years of experience and multiple major updates based on client needs, Entica™ has become a truly all-encompassing, single-source-of-truth system for corporate secretarial management of entity portfolios.
As the GBA continues to develop into the world-class competitive hub of innovation, businesses that are primed for growth can benefit from having a EPM system that offers them the capabilities to expand, safe in the knowledge that their growing portfolio of entities are managed effectively. However, this is not just an opportunity for APAC. Around the world, multinational businesses are benefiting from the efficiency this type of technology offers them and the key areas in our development roadmap involve integrations and automations to further improve current functionalities, generating even more efficiencies for our clients.
We see Entica™ becoming an integral everyday work tool for every governance professional managing a large portfolio of entities, both in the ambitious GBA and across the globe.