Twenty years ago, two senior executives nearing the end of their careers in international banking had a vision for a system that would allow financial professionals to regain control of their business.

"I was working on a small Apple computer and saw that microcomputers were becoming increasingly powerful," RS2 plc chairman Reinhold Schaffter recalls. "An American colleague of mine, Richard Stacks, and I, thought we could start our own business that would move complex banking operations into small networks of PCs.

"In the meantime, the small networks grew. We later saw the advent of file servers, which basically allowed the banks to regain control of their systems. PCs caused departments to become independent within their own sphere of operations."

The two got to work developing a retail banking system for a card management solution by using industry-standard client server-based technology.

They registered a company called RS2 (the initials of both their names) and began to demonstrate their system's potential to card organisations. Master Card invited them to Brussels and introduced them to Malta's Mid-Med Bank (now HSBC Bank Malta). Schaffter, a German national, and Stacks, travelled the Malta to install the system.

"We also carried out some installations in the Eastern bloc where no card systems whatsoever existed at the time," Mr Schaffter, currently in Malta for RS2's 20th anniversary celebrations, explains. "They wanted the functionality and the complexity, and they wanted the best available. However, they only catered for 200,000-odd cards and nothing on the market serviced that number. Our system was flexible enough to cater for new functions and new products."

RS2's system was highly praised by Mid-Med Bank's management who encouraged the company to set up base in Malta. Schaffter moved with his family and lived here for eight years.

"Malta turned out to be the right place for RS2," he says. "There are several advantages to doing business here. There is a lot of talent in such a small place. And the scale is practical."

RS2, based in an office block on Sliema's The Strand, continued to flourish as banks and financial institutions all over the world praised the engine, called Bankworks, and continued to recommend it across the industry.

The company now has a mostly Maltese staff complement of 60, with five employees soon to be employed in a Jordan office, five will be based in the Philippines, and 20 in Germany.

Overseas, RS2 staff offer support to clients in the region and keep their ear to the ground to source new clients.

The company was successfully floated on the Malta Stock Exchange in the second quarter of 2008.

"Let's take a simple example: fees," Mr Schaffter explains. "In the old days, each bank had written programmes for different types of fees - account fees, transaction fees, service fees, fees for specific events. And each one had a different type of programme. Our system only has one fee programme which receives information of two types: one is the event triggering the assessment of the fee (the event could be the end of the month, a chronological issue, the end of the year, or the end of the statement).

"This event then triggers the calculation and appliance of a fee, which could be based on a formula. This principle applies throughout the system. Bankworks is a flexible, event-driven system. Over the years, it has come to be supported by the various new technologies and modified to meet increasing requirements. For a long time, we have used Oracle databases as we have found them best suited to our needs."

"The card market was initially very straightforward," Mr Schaffter continues. "But it became more sophisticated over the years because banks were trying to find new niches for their specific product. These niches had to differentiate the various banks, which in turn always needed new systems."

Bankworks' technology has been delivered to over 80 clients worldwide and a high volume engine able to manage over three million transactions an hour has been a success. The company recently managed to break into the US market with a major sale where "a substantial processing company" is shortly to go live with it.

The numbers are staggering: This newly set-up New York-based financial institution with long-standing card-using clients handles 600 million transactions a month from over 200,000 merchants.

All research and development is carried out in Malta.

"We carry out development on a test basis in a number of fields where promising avenues open up," Mr Schaffter points out. "Our latest crossroads was people not wanting to have this system in the various workstations any more. They wanted to use Web-based technology. When that happened and the banks wanted to use it, we could deliver because we had carried out so much development and put in significant investment.

"The system can be run in a number of places around the world. You could have the operator for the charge-back sitting in New Guinea while the transaction is happening in New York. The internet made all the data processing avenues available to us."

RS2 continues to grow: as soon as planning permission is granted later this year, construction will begin on new premises on land recently acquired in Mosta that will give the company over 2,500 square metres of floorspace to operate from. The project will take 18 to 24 months to complete.

RS2 will then be able to move its growing training academy to better facilities where more delegates - they currently number 200 a year - can be accommodated. The processing centre's move may also require a significant recruitment drive, although it is RS2's policy to recruit "organically" whenever new talent appears.

Mr Schaffter says the current international banking crisis will not affect RS2 for several reasons.

"Decisions to change a system are of a much longer term than we hope the crisis will last," he points out. "We have very attractive contracts which allow clients to pay for their programmes over time and that means the outlay is a long-lasting stream.

"The card industry will be the least that is going to be hit. We cannot imagine any bank which does not offer card services, an ATM network, and a point-of-sale network. We are providing services for a core industry. People may spend less for a period of time, but they still have cards in their wallets.

"This is a period of consolidation for financial institutions, but I have not heard of one that is not going to offer cards anymore. People want the cards, people want to use the ATM - that is our service, that is our software. The growth rate of the card business might be slightly hit, but it is nothing that would affect us significantly."