The innovative crimefighters

• Key to success was the ability to think outside the box
• Hopes to penetrate China and Taiwan market by end-2017

AS criminals become more tech-savvy, it has become increasingly challenging for financial institutions to monitor transactions and detect financial crime activities. To combat crimes like money-laundering and fraud, financial institutions need innovative and state-of-the-art solutions.
 
TESS Innovation Sdn Bhd is a Malaysian company that is at the forefront of the fight against financial crime, with its exclusive range of software: The Coral Suite of Financial Solutions.
 
The company’s anti-money-laundering (AML) software, which is the first of its kind to be provided as a cloud solution, is currently being used by banks across South-East Asia.
 
How it all began
 

 
TESS Innovation's founders B.Y. Liew (right, pic above) and Peter Ong, who are the company’s chief executive officer and chief technical officer respectively, were introduced to each other by a mutual friend back in 1999. They hit it off almost instantly and decided to partner up for a business venture.
 
According to Liew, at the time, they both worked in the banking industry and so they felt it would be best to dive into the area that they knew best. In 2000, the duo started a company named Tri Excel Systems Sdn Bhd, which focused on generic solutions such as Internet and mobile banking, and trade finance solutions.
 
During the early days, they had a hard time selling their products, as no bank wanted to be first user. In addition, many of their potential customers preferred to choose foreign projects with proven track records.
 
Price war
 
Although the early years were exciting, the two friends found that they had to navigate through numerous obstacles and challenges.
 
One of the biggest challenges they faced was to do with competition. The duo came to realise that the barrier of entry for their products was relatively low and this made the competition very stiff. This pushed all the vendors into a price war and the result was decreased profit margins with high expectations on delivery.
 
The duo felt that this situation would not lead to a desirable outcome. It was clear that the time had come to seriously evaluate market trends and demands. So they put their heads together and came up with the idea of specialising in financial crime solutions.
 
“We put up an application to MDEC in 2009 to obtain a grant to build an anti-money laundering solution and managed to get RM1.2 million in matching funds to conduct the research and development that was needed to come up with the solution,” says Liew.
 
Some of its products and solutions are also patented with MyIPO, he adds, referring to the Malaysian Intellectual Property Corporation.
 
MDEC, now known as the Malaysia Digital Economy Corporation, is the national ICT custodian that manages the MSC Malaysia (Multimedia Super Corridor) project and is also the lead agency for the Digital Malaysia programme.
 
Model for success
 
This change in their product offering led to an amazing increase in profits and revenue. It also meant that they had successfully carved out a specialised niche where they could build a brand.
 
Today, their company, now known as TESS Innovation, isn’t just a trusted brand in Malaysia; it also has become a formidable competitor to foreign vendors in the same space.
 
TESS Innovation has a well-established presence and customers in Thailand and the Philippines. It also has partners in Indonesia and Vietnam, and the company is in talks with potential partners to help penetrate the China and Taiwan markets in the future – hopefully some time in 2017.
 
Over the years, the company has also won many industry recognition and awards. These include Best of Financial Application Merit Winner Award from MSC-Apicta 2014, the Gold Award from the Asean ICT Award 2014, the Enterprise 50 Award 2014 from SME Corp Malaysia and Deloitte Malaysia, and the 1-Innocert Company with ‘AA’ rating from SME Corp Malaysia.
 
It was also the only Malaysian company to receive the AICTA award, which is approved by the Asean Telecommunications and Information Technology Ministers Group.
 
‘A-ha moment’
 
TESS Innovation’s defining moment occurred when it changed its business model, and this ‘a-ha moment’ came about during the founders’ time with the Coach and Grow Programme (CGP) 2013-2014.
 
“When we were introduced to the tools and templates provided by the CGP, it looked simple to us, but the exercise in fact forced us to think hard and lay out all the factors and elements that related to our business operations,” says Liew.
 
During the CGP, the TESS team was also asked to think ‘outside the box’ and to start learning the fundamentals of business, marketing and financials.
 
“The CGP provided just the right kind of coaching and their dedicated coaches gave us advice from so many different angles and perspectives,” says Liew.
 
The result of taking part in CGP was significant. After their participation, Liew says the company experienced a 80% increase in revenue and 210% increase in net profit.
 
Ultimate vision
 
With hopes of turning Malaysia into the role model in Asia for fighting and combating financial crime, Liew has big plans for the future.
 
“Within the next five to 10 years, TESS Innovation will continue to play a major role in this niche area as one of the most respected financial crime solution vendors,” he declares.
 
Ultimately, however, TESS Innovation has plans to become a global market leader in providing a wide variety of financial crime solutions, specialising in AML, fraud detection and risk analysis compliance.
 
Childhood ambition
 
Liew was previously an investment banker, but his heart always belonged to entrepreneurship. It had been his passion and cherished ambition to become an entrepreneur since he was a boy.
 
While he encourages others to take on the mantle of entrepreneurship, he notes, “You need to be mentally prepared to step up to the challenge, and with the right attitude and mindset you will obtain just rewards.”
 
But most importantly, he reminds aspiring entrepreneurs to be persistent in what they do and to not give up in the face of adversity until they have exhausted all possibilities.
 
Discover TESS Innovation at www.tessinternational.com.
 
The above is an excerpt from the book Startups to Scaleups published in October 2015 by Cradle Fund and Proficeo Consultants, the programme manager for Cradle’s Coach and Grow Programme. DNA will be featuring every entrepreneurial story from the book in a special commercial arrangement.