Source: FocusM
Kuala Lumpur, Sep 27, 2013 – During his recent trip to Malaysia, Group CEO Harres Tan spent some time in an interview with FocusM where he excitedly talked about Rototype’s latest flagship products and a penchant for his 16-year old Mercedes S320. Writer Lim Wey Wen tells the story below.
Homegrown company now in seven countries with machines that make banking more efficient
Rototype International may not immediately ring a bell but there is a good chance you have come into contact with its products at the bank.
Although the Rototype name came from an Italian firm set up in 1962, its products – the cheque deposit machine, cashless ATM machine and its latest cashier’s cheque-dispensing machine have Malaysian roots.
“We developed the concept of a cheque deposit system with a major multinational 13 years ago,” says Rototype International group chief executive Harres Tan in an interview with FocusM.
“The system was implemented for the first time in Malaysia in 2003 and Hong Kong in 2004,” he says.
Back then, Tan’s IT Company HT Consulting (Asia) Sdn Bhd consulted for many banks and other financial institutions.
In 2002, the US launched the Check Clearing for the 21st Century Act (Check 21 Act), which allows banks to use end-to-end image-based cheque-clearing system to process cheques.
In Singapore, Hong Kong and Malaysia it was called “Cheque Truncation System” and regulators were planning to implement a similar solution within a few years.
Tan saw the opportunity and with a local partner conceptualised the first self-service bulk cheque deposit kiosk in the world.
The kiosk, called CSD 2002, was contract manufactured by HT Consulting’s partner in Italy and the solution, with its suite of sophisticated software, was adopted and deployed by some of the world’s largest retail banks in Asia and the Middle East.
According to Tan, the CSD 2002 kiosk currently commands a 70% global market share in this category.
In 2004, Tan renamed all HT Consulting’s overseas subsidiaries Rototype International and expanded its direct presence into Europe and America for branding purposes.
Long-Term strategy
Like many IT companies, HT Group started writing programmes to fulfill the software needs of various sectors, including oil and gas, banking and finance, and healthcare.
However, Tan chose to specialize in banking and finance as he realized the need to be an expert in a select few fields to be able to take his business beyond Malaysian shores.
He settled on banking and finance, and healthcare. Today,a little more than 10 years after its first cheque deposit machine, Rototype International has two flagship products – its latest two-in-one cashier’s cheque dispensing machine and cashless ATM machine.
It also has a physical presence in six countries outside Malaysia – the US, the UK, Hong Kong, Australia, Italy and Singapore.
As the company’s cheque deposit machine was the first of its kind on the market in the early 2000s, it took competitors about five years to replicate it.
During that period, the company enjoyed the lion’s share of the automated cheque deposit market.
Tan seeks to replicate the success of his first product with the cheque dispensing machine and cashless ATM machine, which allow bank customers to purchase banker’s cheques or redemption vouchers for participating merchants as long as online transactions are allowed using their mobile phones.
“You could just use your mobile phone to buy a cheque through mobile banking and you will get a QR code,” Tan explains.
“You can then go to any bank branch that has the machine, scanning the QR code and it prints you the cheque”, he adds.
The machine was launched in June this year in New York and Tan says there has been keen interest by local and foreign banks.
He expects orders to roll orders to roll in only next year, as it usually takes a year or two for banks’ top executives to make such purchasing decisions and allocates the necessary resources.
“We conceptualised it after reading about (Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz’s) comments that banks are spending a lot of money processing cheques,” Tan says.
Currently, banks spend about RM3 to process a cheque. An average of 205 million cheques are processed each year.
Tan sees Bank Negara’s recent moves to promote cashless transactions as an opportunity, as a migration to e-payment will not work without infrastructural support.
“It must be convenient enough for consumers to feel they do not need to carry their chequebooks around anymore,” he says.
As Rototype International has wide exposure to the banking and finance sector, the 2008 financial crisis inevitably hit it hard.
Several multi billion-ringgit deals fell through after the company invested heavily in the manufacture of products to be delivered, and it had to restructure some of these deliveries over an extended period.
“Thank God we will still have good maintenance and service income, so Tan says, adding that the company continues to invest in research and development.
When asked how the company managed to expand without tapping into the capital markets, Tan’s succinct answer was “good financial management”.
According to Tan, the company grew organically without seeking bank borrowings and owns all its office premises.
There are no plans to have the company listed.
“We don’t waste money,” says Tan, who still drives his favorite 16-year-old Mercedes-Benz S320.
A world of opportunity
Aside from continuing to develop products to serve the banking and finance industry, Rototype International’s group company HT Consulting is also launching and offering Panton EMR – an electronic medical records and healthcare information system – this year.
Tan says the system was developed over the past decade and has been in use at the Loh Guan Lye Specialists Centre in Penang for the past three years.
“Rototype International continues to be in banking, while HT Consulting remains in healthcare”, says Tan.
Rototype International is setting up an office in Dubai to service the company’s Middle Eastern and North African banking customers.
Although its products are sold worldwide, Tan is now focusing on the US market and works primarily out of his New York Office.
He recently appointed Irwin Oh Rototype International CEO, while he assumes the role of group CEO.
“Our Focus today is the Americas, which is the biggest market for us now,” says Tan. “With the US economy recovering, this is perfect timing for me.”
