Multinational corporations are having to respond to a rapidly changing global landscape by revamping how they structure their operations. One focus of this transformation has been on the function of global capability centres (GCC), strategic units which support an organisation’s global operations. These have gone from being purely back-office cost centres to now adding value to enterprises through their agility, efficiency, and innovative drive.

The change is driven by a complex geopolitical and macroeconomic environment, as well as technological progress in artificial intelligence (AI) and machine learning. This has made GCCs, which had initially been established to streamline day-to-day functions such as payroll and accounts receivables and payables, evolve to a central position in strategic business functions. 

Within treasury and finance organisations, GCCs are increasingly becoming knowledge centres that not only support working capital management and funding needs but also leverage AI and digital tools to offer decision making support, as well as accurate, faster, safer processing. 

Nowhere is this shift more evident than in the Asia Pacific (APAC) region, where the combination of skilled talent, digital readiness, cost efficiency, and supportive government policies has propelled the region into a global hub for GCC activity.

For multinational banks, this presents a significant opportunity to provide integrated payments, foreign exchange, liquidity, and trade solutions tailored to this client segment.

APAC potential 

APAC’s dominance of the GCC space is not surprising, given that the region is the engine of growth for global payments. The region is also home to more than one-third of the global shared services market; India, the Philippines, and Malaysia are the key markets of growth. 

The reasons are clear. Asia’s GCCs are becoming a hedge against an increasingly fragmented global supply chain that is disrupting financing operations globally. Their strategic location, scalability, digital focus and vast English-speaking workforce add to their appeal.

India, in particular, leads the way. The country hosts some 1,700 GCCs with 1.9 million professionals. This is expected to jump to 2,400 GCCs and 2.8 million professionals, respectively, by 2030. India’s science, technology, engineering and mathematics (STEM) talent pool, cost advantages, and robust infrastructure make it a top choice for companies seeking a base for their GCCs. From healthcare to consumer, from financial services to engineering, MNCs across the board have established GCCs in these Asian economies.

The Philippines has more than 700 GCCs, thanks to its talent pool and familiarity with Western compliance frameworks. Government investment in talent and the creation of new business centres are set to propel the market further.

Within ASEAN, Malaysia has also emerged as a cost-effective support hub. It has more than 400 GCCs, positioning it well to be a leading force in hosting GCCs that drive continuous transformation and expand the functional scope of the organisations they serve. Additionally, Malaysia is pursuing a digital economy strategy – the Malaysia Digital (MD) initiative – which has been pivotal in attracting international investment.

Following Western multinationals

US and European multinationals are typically ahead in leveraging their GCCs as strategic assets. Many started their transformation journey a decade ago and now deploy GCCs to fuel innovation. In contrast, many Asian firms are just starting on this journey – meaning they are grappling with legacy systems and internal resistance to change.

This represents an untapped opportunity: as these companies modernise, they’ll need trusted banking partners that understand both regional nuances and global best practices. They will also need seamless cash management services, cross-border payments, payroll processing, FX risk management, and supply chain financing. 

The pace of technological advancements and ongoing global volatility will push MNCs to continue bolstering their GCC strategy. And hence, they will need banking partners that help them navigate challenges and identify opportunities, while offering them the right solutions to boost efficiency and manage liquidity and risk effectively. On-time treasury solutions, guaranteed FX propositions, cross-border and real-time payments, digital and card-based payment mechanisms and cash distribution are some of the areas that would see an incremental rise in demand from GCCs. 

If banks want to take advantage of this business opportunity, they must rise to the occasion. The APAC region is way ahead when it comes to digitisation: though a complex regulatory environment and cybersecurity issues remain bigger challenges. Financial services providers must use the robust digital infrastructure being built across the region and collaborate with fintechs to service the flourishing GCCs. The opportunity is big, and it demands more attention.