In 2008, Bank Negara Malaysia initiated the cheque truncation project. Banks are required to capture cheque images and process cheques electronically. We have been extremely successful with the cheque truncation project. We installed our solutions in many banks. We continue to be the leading solutions and services provider for cheque processing.
In 2014, Bank Negara Malaysia, in its efforts to boost electronic payments, issued a directive to banks to reduce cheque usage and imposed fees for cheques issued. With this reduction in cheque usage, banks realised that in the long term, having their own processing resources may not be viable in the longer term. Processing cheques are not only getting more expensive, banks are also facing the challenge of keeping their processing expertise. This posed a huge business continuity risk to the bank.
Hence, we started the Cheque Processing Outsourcing (CPO) business to take on the processing and clearing of cheques for any banks that require this service. To do this cost effectively and efficiently, our model has to be different. In conventional models, cheques are required to be collected for processing. Conventional models will eventually become untenable as the cost of collection becomes prohibitive as cheque volumes decline. Our model, however, makes use of imaging technologies to transmit images for processing. We expect more banks to take on our CPO model for their cheque processing needs as the issue of escalating costs and the retention of skilled processing staff becomes more acute.
We are unique in having both cheque processing solutions installed at the banks as well as an outsourcing cheque processing capability that banks can turn to. Banks have the option to switch to an outsourcing model when situation dictates. This provides a huge assurance to the banks in mitigating their business continuity risk.