PRIMACY TECHNOLOGY
Primacy Technology is using RegTech to help the world’s biggest financial institutions and businesses tackle the climate crisis. SuperTech in collaboration with UK Department of International Trade in Singapore, The West Midlands Growth Company and SuperTech member Bruntwood SciTech have successfully supported the firm in setting up its European headquarters in central Birmingham.
We’ve caught up with Primacy Technology co-founder and serial entrepreneur, Aga Manhao. Aga’s varied career has seen him run multiple multinational businesses in Japan, Singapore, Australia, London, and Switzerland overseeing three IPOs. As founding CEO of his previous startup, HomeStay Care, Aga took the business from concept to listing on the Australian Securities Exchange (ASX) in under two years. In his latest interview Aga discusses how Primacy Technology has gone from cryptocurrency regulation specialists to addressing the fast-moving regulatory environment of ESG compliance.
When did you form Primacy Technology and how does the technology work?
We formed Primacy Technology in 2020 in a bid to use technology to help financial services firms comply with newly emerging cryptocurrency regulation. The big challenge at the time for regulators in Singapore and around the world was, how do you treat an asset that is yet undefined? In the end it was decided by the Monetary Authority of Singapore that cryptocurrencies would come under the Payment Services Act. In 2018 there were no licenced cryptocurrency entities in Singapore. As well as offering enhanced protection for those trading cryptocurrencies, the act was also designed to attract 1,000s of new businesses to register in Singapore, something which it has been highly successful at.
The opportunity we saw was that while the companies looking to become regulated were fast moving and highly tech oriented, the approach to regulatory compliance hadn’t particularly changed much – it was highly laborious, manual, and difficult to do. The question was in a fast evolving, highly regulated market like financial services, how will firms ensure they can keep up with the rate of change and remain compliant? Our solution has been to invent OPTML, software that converts legislation, regulations, contracts, and other structured legal documents into a machine-readable format. From this basis we can develop applications like Primacy OK, which allow businesses to collect, organise and share their obligations automatically for the first time. Essentially, Primacy OK, converts complex legal documents into actionable easy to understand rules and requirements that can be shared with employees. It allows firms to keep pace with the rate of change and ensure compliance is quicker, cheaper, and more complete.
How has you company evolved?
While our initial focus was cryptocurrency, the technology we have developed can be applied to any regulation or legislation. The climate crisis and necessity of environmental change is perhaps the greatest challenge we all face. We’ve proven the technology in the fast moving, highly changeable sector of crypto regulation and now we’re applying it to ESG. Fortunately, when it comes to environmental regulation and legislation (as opposed to crypto regulation which tended to be country and territory specific), there is one gold standard that is set to be adopted and adapted globally from 2025 - The European Union’s Corporate Sustainability Reporting Directive (CSRD), which requires:
Large companies within the EU to report on sustainability matters such as environmental rights, social rights, human rights, and governance factors from 2025 (reporting on their 2024 activities) both for themselves and their subsidiaries.
Listed SMEs (except micro undertakings), small and non-complex credit institutions and captive insurance undertakings to report from 2027 (on their 2026 activities).
Companies outside the EU with a net turnover above 150 million in the EU to report from 2029 (on the 2028 financial year)[1].
The importance of all businesses and organisations - and particularly the large-scale financial institutions and firms we work with - being able to quickly and effectively understand the regulations and turn them into actionable policies cannot be underestimated. This will affect everything from how a business operates to its ability to attract investment and even employees.
How will this affect businesses and organisations outside the EU?
Ultimately, environmental legislation like the CSRD, how it is adopted and implemented both in the EU and globally will determine whether or not the planet as we know it exists in 30 years. At a very basic level, UK, and other non-EU businesses with a net turnover above 150 million in the EU that have at least one subsidiary or branch in the EU will need to be compliant by 2028/9. More broadly speaking, countries outside the EU are very likely to follow the trading zone’s lead and develop their own regulatory requirements. The challenge now is to try to ensure a certain level of consistency in the regulations and requirements globally. To this end, I’ve recently been appointed to the technical committee of the ESG Exchange. Founded by Professor Mervyn King who was instrumental in developing the Generally Accepted Accounting Principles (GAAP) that have been adopted globally, is Chairman of the International Integrated Reporting Council and has advised the United Nations and The World Bank. The purpose of the technical committee is to help standardise ESG regulation and reporting globally.
What is your mission or purpose as a business?
ESG is a global phenomenon. Whether it happens now, in two years, three or even four, decision makers need to understand that the latest developments will fundamentally change the way they operate as a business, secure investment, report and attract. There already is a strong desire for change. 90% of all listed entities are already self-reporting as part of good governance. The main difference is that ESG reporting, and activity is going to be mandated and, as opposed to many other forms of legislative and regulatory requirements that sets a baseline standard just for reporting, ESG obligations will require demonstrable year-on-year improvements on their firm’s commitment to their Net Zero obligations.
Our mission is to leverage our technology to ensure the understanding, adoption and enacting of regulatory requirements is as quick and easy as possible and that firms can be kept up to date on their obligations. For the asset managers and banks we work with their obligations are even higher, as they will need to understand and report back on not only their own operation but also on their portfolio companies. Governments, banks, investors, and financial institutions will need to report on the green credentials on all of their investments. For example, we’re speaking to a government future fund that has $415 billion under assets. The simple question was, how do you track your investment portfolio, how do you know they're meeting their ESG credentials? The answer was – we don’t that’s why we’re talking to you. They'll need to, otherwise they'll be deemed to not be following their own policies. It’s a bit of a chicken and egg situation, but the reason this regulation is coming into effect is so that we can start to meet the 2050 Net Zero climate crisis target. Even a 1% change amongst the biggest businesses in the world and those that they invest in will have a huge effect. It’s a real privilege to be able to harness technology to help make that a reality.
What made you choose the UK and Birmingham, in particular, for your first new site outside of Singapore?
The genesis for us was based on the total addressable market. Singapore has 1,000 licenced entities that are reported under the regulator and the UK has almost 70,000 regulated entities. So, it was a bit of a no brainer. Do we play here forever, or do we move in with the big boys and start trading in a much larger market? This was then accelerated by us being selected as the chosen Singaporean entry for the Scale-Up Games. Run alongside the 2022 Birmingham Commonwealth Games the Scale-Up Games were designed to support and encourage highly innovative companies from around the Commonwealth to setup and grow in the city.
Primacy Technology Founder Aga Manhao (centre middle) with the Scale-Up Games delegation winners and West Midlands Mayor Andy Street (front middle) in July 2022.
Ahead of the competition I had no real expectations of Birmingham, having never been to the city before, but I had worked in London for three years, so I knew the UK fairly well. What really blew me away about the city and the region was the really strong desire for collaboration. It was through this programme that we were made aware of Hilary and SuperTech. The people she has introduced us to and the contacts she has given us with clients that we just never would have been able to have meet before is huge. It’s not just with clients either. SuperTech has introduced us to the angel investors, venture capitalists, venture partners, and helped with grant applications consultants that we would need to help grow within the region. When the opportunity came up to go ahead and open up the office, as we’d planned, Birmingham really became an absolute no brainer. As a start up with limited fund and resources, being looked after in that way is just invaluable. The fact that SuperTech is an ongoing network that we can continue to benefit from made a huge difference too.
It wasn’t just SuperTech though, everyone we’ve met in the West Midlands has been really accommodating. There is a very real sense of collaboration in the city that if I’m honest, having lived and worked in various places around the world, I don’t think exists to the same degree outside of the region. We’ve built a network here in Birmingham in a matter of months that took us three years to do in Singapore. There’s also enough potential business within the West Midlands alone that will allow us to do very well, even before we expand out to the rest of the UK. There’s a really strong cluster of financial services firms in the city, both top tier and second tier that could be our customers. It's absolutely self-evident that you don't have to be in London anymore to work in or with financial services firms. Additionally, the operating cost in Birmingham is just so much lower than say London where I was originally considering, which is going to help us scale much faster and more effectively.
I would say that everyone's done a really good job in introducing us and making us feel welcome. It’s been a real collaboration from Natalie Black CBE, HM Trade Commissioner for Asia Pacific, The British High Commission in Singapore, the UK Department for International Trade through to the West Midlands Growth Company and SuperTech. There’s a real appetite for attracting professional services tech firms like our own and then supporting them to grow when they get here. We now have an office are applying for grants and are starting to recruit. In London I feel like we’d be lost in the numbers, in Birmingham we feel like rock stars, with an incredible base from which to grow.
How many people do you employ currently? And how many do you expect to employ as a result of this expansion?
We currently have eight fulltime staff, the majority of which are in Singapore and Australia, with one in the UK. Our intention is to grow that to between 20 and 40 over the next three to five years, the majority of whom will be in the West Midlands. We’re a remote first employer and thanks to our geographical split we’re able to offer round the clock support.
What would you say are the greatest challenges ProfTech and RegTech companies face?
It is a challenging sector to be in. There are two things that always hold true for regulation:
There’s a lot of it
It’s always changing
Companies really struggle with keeping up with the rate and amount of change and that’s one of the problems that we solve.
When you try to build technology – something which in and of itself is already really challenging – around a subject matter or sector that is inherently challenging and has change at its heart that is of course incredibly difficult. On the flipside of that it is also very clearly a challenge that needs to be addressed and something that will provide real benefit to clients.
One of the challenges that we face and which I would assume a lot of RegfTech’s face is adoption. We’re making a difficult, time intensive process easier, quicker and more effective. However, for a lot of people and even at a company level it can be seen as ‘better the devil you know’ type situation with a preference to do things the harder, less effective and more time-consuming way, because ‘this is how we’ve always done it.’
For more on Primacy Technology and their work, visit: https://www.primacy.co/
To find out more about working with SuperTech and how it can support your business contact executive lead Hilary Smyth-Allen at hilary@supertechwm.com.
[1] Source: Council of the EU, 28 November 2022 10:30 - Council gives final green light to corporate sustainability reporting directive https://www.consilium.europa.eu/en/press/press-releases/2022/11/28/council-gives-final-green-light-to-corporate-sustainability-reporting-directive/