Karl Lamar

Executive Director

Commercial Banking - Government

September 2019

Basics of Cash Management

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Agenda

Page

1 Cash Management and Financial Goals 12 Receivables and Payables Solutions 4

3 Card Solutions 8

4 Fraud and Cybersecurity 11

Goals for a successful treasury management

Maximize visibility and control in the payables process

Streamline the collections

process

Maximize the return on account

balances

Mitigate risk throughout the cash flow cycle

Make better decisions with more financial information

Reduce paper/check costs through electronic solutions

Stop payments easily and quickly

Streamline procurement process

Real-time access to information via desktop or mobile device

Reduce time required to prepare and transport cash/check deposits

Speed cash flow and funds availability

Centralize collections

Leverage mobile technology

Optimize working capital

Leverage earnings credit allowance

Earn competitive interest rates and rebates

Consolidate balances for self-funding, making investments and paying debt

Retain data to address legal, risk and audit requirements

Protect your business from fraud and potential losses

Improve employee safety

View balances and account history

Make secure payments and transfer funds online

Integrate data with internal systems

View account information across multiple banking providers

Your need

Value

1

Who said managing your investments can’t be easy?

Use Rule Based Liquidity Management to efficiently execute your strategy

INVEST ON YOUR OWN

TERMS Execute and settle investments from one account

with consolidated reporting

Change parameters in real-time

Allocations are automatically adjusted on a daily basis based on cash position

Setting Your Investment Parameters:

Set a target balance to be allocated toward earning credits and/or interest-bearing deposits

Designate a minimum or maximum amount to be invested

Define a percentage of funds to be investedPrioritize and invest automatically

IdentifyAccounts

Sweep toInvestment

Execute InvestmentsBased on Client-

Defined Rules

Allocate

Target Balance

Investment A $ M

Investment B $ M

Investment C $ M

Investment D $ M

Investment E $ M

2

Online cash management solution

A powerful online solution that is simple, intuitive, secure and integrated on your desktop or mobile device

RECEIVABLES

Consolidated receivables view of ACH, Wire and Lockbox transactions

Image archive for research and retention

Receivables reconciliation and enrichment tools

Remote deposit capture

PAYABLES

All key transactions (Wire, ACH, liquidity investments and cross currency) made from a single platform

Our upload services to import files for ACH, Wire or cross currency payments

Increase efficiency with check print outsourcing

INTEGRATION

All cash management activities managed through one channel with single authentication

Robust global search capabilities to easily locate information

Back-office integration

INFORMATION REPORTING

Customized, on-demand, or scheduled reports

Personalized alerts for proactive notification

Self-service access to review exceptions and view extended history

Multiple formats for file exports

SECURITY CONTROLS

System administrators efficientlymanage entitlements and make modifications to protect your business

Minimize fraud exposure with check and ACH Positive Pay

Additional control features including user limits, single machine registration and matrix approval

3

Agenda

Page

1 Cash Management and Financial Goals 1

2 Receivables and Payables Solutions 43 Card Solutions 8

4 Fraud and Cybersecurity 11

Integrated Receivables Solutions

A wide spectrum of solutions designed to accelerate your collections and improve reconciliation

Tech

nolo

gy A

dvan

cem

ent /

Dig

italiz

atio

n

Value

Branch Deposit

Smart Safe

Cash Vault

ATM

Image Cash Letter

Remote deposit capture

Wholesale and retail lockbox

Data Transmission

– BAI, EDI and proprietary

Optical and intelligent character recognition (OCR, ICR, etc.) data capture

Remittance association

Invoice matching

Exception management

Payer data management

Transmission reporting –ACH, Wires and returns

Multi-channel: credit/debit card and ACH

ACH eLockbox

ACH collection

Card services

CashCheck

Image Capture Platforms

Data Capture

Core Depository

Online Receivables

Online and Mobile

SolutionsReconciliation tools

Electronic Receivables

4

Comprehensive e-payments platform

Real-time payment confirmation

or end-of-day

remittance file

Research and reconcile deposits

Bill notification e-mail

Bill data only or with image

Multiple or single bill(s)

Paperless preferences

Preregistration

Self-registration

Unregistered payments

Client Interface/API

Credit/Debit cards

Immediate

Scheduled

Recurring: installment or variable/auto

ACH

Mobile

Web

IVR

Generate reports

CSR

PCI and NACHA compliance Accelerate cash flow and processes Reduce costs and inefficiencies of paper

Automate acceptance and posting Payer convenience and preferences Focus on core competencies

B E N E F I T S

A configurable payment collection platform, that is easily expandable to support your needs

Configurable data elements

POS

Invoice / Bill Presentment

Registration Options

Payment Channels Payment Methods

Payment Frequency Remittance Data

Admin Site

5

Integrated Payables Solutions

Gain efficiencies and reduce costs by automating your disbursements

CashCheck

Check Print

OnlineEnrollment

Mobile Payments

ACH

Electronic Payables

Wires

Real TimePaymentsPaper Payables

Controlleddisbursement

Account reconciliation

Positive pay

Online check image storage and inquiry

Print and distribution

Payment types

Account payables checks

Payroll

Official checks

Customized card solutions

– Purchasing

– Single Use

– Travel

Rebates

Timeliness and certainty of payments

FedWire

Chips

Digital Payments

Payroll direct deposit

Electronic payments

Mobile / digital payments

Purchasing Card

Single-UseAccount

Value

6

Unlock economic value with an Integrated Payables approach

Digitize your payment channels

Reduce transactional cost

by 80%+

Prioritize spend based on total

return

Earn rebates and increase Days

Payable Outstanding (DPO) on converted card

spend

Strategically leverage grace period on Card

Pay earlier to increase rebate or pay later to increase DPO

Key principles

Illustrative value

Drive operating efficiencies

Enhance control environment

Optimize working capital

7

Agenda

Page

1 Cash Management and Financial Goals 1

2 Receivables and Payables Solutions 4

3 Card Solutions 84 Fraud and Cybersecurity 11

Choose a Card solution that is right for you

So many options to consider

How will the rebates impact my working capital?

Will it be efficient, flexible, and streamline

my payments?

Will we be able to send images of our

receipts?

Would our billing be simple?

How will the approvals flow on purchases and

travel expenses?

Will it be convenient for my employees?

Can we set our unique controls and have

visibility in all spending?

How easy is it to manage?

Will this help us be better at taking advantage of

invoice discount terms?

Can we set spend limits and make

temporary limits?

Can we add virtual cards for single-

use spend?

8

The simplicity and reliability you deserve

Gain maximum value with resources designed to meet your needs

Purchasing Cards Single-Use Accounts (SUA)

Plastic, cardless and ghost/supplier payment solution

Virtual, electronic, single use accountpayables solution

Reduce costly manual processing on low value/high frequency spend

Target higher value spend requiring A/P control or pre-approval

Employee convenience with powerful spend controls and added visibility

Benefits of a purchasing card with the added controls of a check (date, exact amount)

Processing cost saves plus rebate revenue and working capital opportunity

Efficiencies of ACH, plus rebate revenue and working capital opportunity

9

Fraud communication

How we communicate suspicious activity

1st Immediate text/email/phone

fraud alert2nd Call CH 3rd Call CH,

send email to CH4th Call & email

CH, call PA5th Call & email

both CH & PA

6th Escalate with client

relationship team

Fraud AlertsWith fraud alerts, cardholders are notified when suspicious transactions are identified on their account.

Cardholders (CH) and program administrators (PA) can enroll to receive notifications through text, email, and/or phone.

Cardholder fraud alerts are one of the easiest and fastest ways for

cardholders to confirm fraud on their accounts.

Suspicious activity communication

10

Agenda

Page

1 Cash Management and Financial Goals 1

2 Receivables and Payables Solutions 4

3 Card Solutions 8

4 Fraud and Cybersecurity 11

Enhance your security protocols

Safeguard your company Safeguard your accounts

Criminals frequently use multiple types of fraud schemes to trick employees at companies into sending payments

Emails or other communications to a company’s employees that appear to be from legitimate contacts, but which actually direct the employee to make funds transfers to accounts controlled by criminals

Malware attached to emails or website links that infect a company’s computers and capture the company’s security credentials, enabling criminals to issue payment instructions in the name of the business

ACH debit block– Protect your accounts against unauthorized debits

Positive pay– Automatically validate presented checks against your

uploaded check file

Transaction limits– Periodically set and review for each authorized user;

review and adjust daily as needed

Leverage dual controls

Call vendors to verify new wire instructions

Review transaction and log-on history regularly

Alerts– Use to understand when payments have been made or

changed

@

11

Financial professionals are preparing to guard against email scams

To guard against Business Email Compromise (BEC), companies are implementing various procedures to prevent their employees from being “scammed” by fraudulent emails.

Additional Controls Confirming requests for transfer of funds by

using phone verification as part of a two-factor authentication

Implementing an intrusion detecting system that flags emails with extensions that are similar to company email

Sources of attempted fraud in 2018 64% Outside individual

58% Business email compromise

22% Third-party or outsourcer

21% Account takeover

The recent development of increased “sophisticated” fraud such as account takeovers suggests that fraud mitigation, in addition to robust internal controls, should also focus on network security and how to prevent external parties from gaining access to internal systems.

Source: 2018 AFP Payments Fraud and Control Survey – www.AFPonline.org12

Payment methods that were targets of attempted and/or actual payments fraud in 2018

Percent of organizations that experienced attempted and/or actual payments fraud

70% 45% 33% 29% 20%

ChecksWire

transfers

Corporate / commercial credit cards

ACH debits

ACH credits

Source: 2018 AFP Payments Fraud and Control Survey – www.AFPonline.org

Historical Trend of Fraud for Payment Methods Payments by Checks are the most subject to fraud, but instances being reported are on the decline

Fraud through Wire continues to be at elevated levels with business email compromise (BEC) being a likely cause of attacks

Fraud activity with Cards on the decline

Fraud has increased to record levels for ACH Debits and continues its upward trend

A steady increase in ACH Credits fraud since 2012

13

Historical trend of fraud for payment methods

90%93%

85% 87%82%

77%

71%75% 74%

70%

37% 38%

32%29%

43%

34%39%

32% 30%33%

25% 25% 23%27% 22%

25% 25%30% 28% 29%

3%

4% 5%

11%14%

27%

48% 46% 48%45%

7%

4% 5%8% 9% 10% 11% 11% 13%

20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Checks Credit/Debit Cards ACH Debits Wire Transfers ACH Credits

Percent of organizations that experienced attempted and/or actual payments fraud

Historical data, 2009-2018

Source: 2018 AFP Payments Fraud and Control Survey - www.AFPonline.org

14