2. Technology and Treasury Trends Central Florida Government Financial Officers Association Chapter Meeting February 8, 2013 | 1:00 p.m. to 3:00 p.m.

3. 2 Agenda Introduction Did you know? ’60s ’70s ’80s ’90s 2000 and beyond Think Tank (game) Q & A Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table

4. Introductions

5. 4 Biography Glenna is a Vice President and Treasury Solutions Officer within the Public Sector Treasury Solutions Division of Bank of America. She has been with Bank of America for 28 years and a member of the Treasury Management team for 16 years. She is a proven treasury management leader with a strategic focus on complex state and municipal clients. She’s responsible for assisting municipal clients in the development of an efficient and cost effective end-to-end treasury workstation, while leveraging technology and integrating with existing infrastructure. She delivers the scope and strength of Bank of America’s enterprise to help meet her client’s specific objectives and achieve their goals. With Glenna’s vast experience in the government sector she covers the central Florida market, Tennessee and Kentucky. With her expanded knowledge and industry expertise, she understands the unique challenges government entities face in these unprecedented and challenging times and is able to share industry best practices with clients across the southeast region. Her main office is located in Tampa, Florida. Glenna has been a featured speaker and panelist on innovative comprehensive government and treasury management topics including Developing a Successful Request for Proposal, Comprehensive Payables, Check Conversion to Electronic Payments, and Payments Transformation at various industry venues including The Florida Government Finance Officers Association, The Florida School Financial Officers Association and The Florida Tax Collectors Conference. Glenna attended the University of Miami. Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Bank of America Vice President Treasury Solutions Officer Glenna Thompson

6. 5 Biography Evan Tullos is responsible for the State of Florida public sector market. This includes managing the State of Florida purchasing card contract and all local governments utilizing Bank of America Merrill Lynch card solutions in Florida. Evan leads the strategic card account management responsibilities for this region focused on program growth and servicing requirements for our local government and state agency clients. The Florida card market for Bank of America Merrill Lynch is considered the largest in the US with spend volume in excess of a billion dollars. The scope of offerings Evan is responsible for include Commercial Visa and MasterCard branded solutions; Corporate Purchasing Card, Corporate Travel Card, Commercial Pre-Paid, B2B Payments, and Comprehensive Payables. This also includes consulting on various industry leading applications such as the Works, Visa and MasterCard web-based solutions, Concur Travel Technologies, Payment Center and multiple commercial ERP system integration requirements. Evan is a representative for the Global Card Payments Solution joint venture that includes Visa Commercial Card issuers around the world. Evan has been with Bank of America since 1991 and resides in Fort Myers, Florida. Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Bank of America Senior Vice President Senior Card Account Manager Evan Tullos

7. 6 Biography Kathryn has over 25 years banking experience, with 18 years dedicated to the government and institutions market. Her background includes tax exempt debt structuring, corporate and investment banking, relationship management, as well as treasury management. Her current responsibilities include client management of the government market segment in the central and north Florida region. She has extensive experience serving as a relationship manager for numerous governmental clients in Florida. She is a Certified Cash Manager, (CCM). Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Bank of America Senior Vice President Senior Client Manager Kathryn Sikes

8. 7 Did You Know?

9. 1960s

10. 9 Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table 1961 Berlin Wall Built Timeline 1962 Cuban Missile Crisis 1963 Marin Luther King makes his “I have a dream” speech 1964 Beatles become popular in the U.S. 1965 Japan’s Bullet Train Opens 1966 Mass draft protests in U.S. 1967 First heart transplant First super bowl 1968 Martin Luther King assassinated 1969 Neil Armstrong becomes the first man on the moon Rock-and-Roll concert at Woodstock

11. 10 1960s: Beginning of the computer age The computers enabled bank employees to process checks in a faction of a second as well as access customer information saved in databases. This modern machinery included magnetic reel to reel tape and an automatic typewriter, among other space-age tools, and processed 30,000 transactions in three-to-four hours of computing time. This film provides an illuminating view of the early days of electronic banking. Since then, banking has experience a number of revolutions. Check clearing has evolved into an increasingly electronic format with the introduction of check clearing for the 21st Century Act. Most checks are now presented to financial institutions as electronic images, changing the way that the majority of checks are processed. Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table

12. 1970s

13. 12 Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table 1971 United Kingdom changed to decimal system for currency Timeline 1972 Mark Spitz wins seven gold medals 1973 Sears tower built 1974 U.S. President Nixon resigns 1975 Microsoft founded 1976 Nadia Comaneci given seven perfect tens 1977 Elvis found dead 1978 First test tube baby born 1979 Margaret Thatcher first women Prime Minister of Great Britain Sony introduces the walkman

14. 13 1970’s Inflation The 1970’s saw inflation skyrocket and consumer price rose, oil prices soared and the federal deficit more than doubled. By the end of the decade drastic action was needed to break inflation's stranglehold on the U.S. economy. Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table

15. 1980s

16. 15 Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table 1981 MS-DOS invented. The first IBM-PC invented. Timeline 1983 The Apple Lisa invented. Soft bifocal contact lens invented. First Cabbage Patch Kids sold. Programmer Jaron Lanier first coins the term "virtual reality". 1984 The CD-ROM invented. The Apple Macintosh invented. 1985 Windows program invented by Microsoft. 1986 Fuji introduced the disposable camera. 1987 The first 3-D video game invented. Disposable contact lenses invented. 1988 Digital cellular phones invented. Doppler radar invented by Christian Andreas Doppler. 1989 High-definition television invented.

17. 16 1980’s Setting the stage for financial modernization Marks the beginning of a period of modern banking industry reforms. Banks began offering interest-paying accounts and instruments to attract customers from brokerage firms. Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table

18. 1990s

19. 18 Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Timeline 1990 The World Wide Web and Internet protocol (HTTP) and WWW language (HTML) created by Tim Berners-Lee. 1991 The digital answering machine invented. 1993 The Pentium processor invented. 1995 The Java computer language invented. DVD (Digital Versatile Disc or Digital Video Disc) invented. 1996 Web TV invented. 1997 The gas-powered fuel cell invented.

20. 19 1990’s The Longest Economic Expansion Interstate Banking and Branching Efficiency Act allowed banks to engage in interstate branching outside of its home state. Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table

21. 2000 & Beyond

22. 21 Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table The New Millennium Timeline New millennium 2000 2001 9/11 The Euro introduced 2002 2003 US Dept of Homeland Security Do Not Call List Mars Exploration Rovers Privately funded human spacefl ight 2004 2005 Hurricane Katrina Pluto is demoted to "dwarf planet" status 2006 2007 Global economic downturn Artificial DNA 2008 2009 Water is discovered on the Moon

23. 22 Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Technology in the 2000s dot-com bubble bursts 2000 Apple iMac G4 2002 Web 2.0 Facebook 2004 Twitter 2006 Scientists extract images directly from the brain Artificial DNA 2008 2001 Wikipedia Apple iPod 2003 MySpace 2005 YouTube USB flash drives 2007 iPhone Kindle Google Street View 2009 Portable (and ultra-portable) PCs Mind control headsets for gamers

24. 23 Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table 2010s Timeline Haiti earthquake BP Oil rig explosion As The World Turns Final Episode Wikileaks Toyota recall Pakistan flood 2010 Japan earthquake and tsunami Death of Osama bin Laden Greece debt crisis 2011 The Diamond Jubilee of Queen Elizabeth II Facebook IPO Mayan calendar approaches the end 2012

25. 24 Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table 2010s Timeline Scientists create synthetic life Scientists trap antimatter Speech-to-speech translation in mobile phones 2010 iPad Multi-touch surface computing The first open petaflop supercomputer comes online 22 nanometre chips enter mass production Consumer-level robotics are booming 2011 iphone4 Quad-core smartphones and tablets Nintendo launches the Wii U 2012 Windows 8 is released

26. 25 Government thinking: the Future is Now Integrated application design Digital Identity Wet signature technology vs. digital signatures Crowd Sourcing Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table http://www.govtech.com/technology/Tech-Trends-Public-Agencies-Should-Watch-2012.html

27. 26 Rethinking Banking Banks are exploring how emerging technologies and insights into human behavior can transform the customers’ experience and elevate the role of the bank in their financial lives. Banks seek to invent new ways to anticipate the needs and desires of customers down to the level of the individual to put every customer in total control of his or her own financial future, to rethink the experience of customer-bank interaction as visual and physical reality become increasingly intertwined, and finally to leverage the unique position of a bank to make people’s lives simpler and more fulfilling. Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table

28. 27 Foresight and Insights Customer Driven Innovation What kind of innovation can we expect as banks cultivate and deepen customer relationships –Mobile banking (expected to be as routine as ATMs) –Internet banking –Cashless Society (emerging markets-Asia and Europe) –Security –Convenience Transparency and Innovation Understand when the customer desires a technology solution versus a personal touch –New branch concepts, interacting with technology –Trusted Advisor on certain topics (i.e. Investments, retirement, etc.) Innovation for Growth Like business everywhere, global banks are adjusting to the new normal following the global financial crisis –Re-regulation –IT Investment (i.e. who owns, who operates, etc.) Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table

29. Monitoring Global Trends What’s most important to you?

30. 29 Risk Management And Mitigation Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Risk Management Trends Identifying and evaluating risk factors Source: CFO Magazine, “Keeping Cool in the Hot Seat” (March 1, 2012) 50+% of CFOs experienced increased responsibility in risk management Drive for profitability and shareholder value... MARKET RISK Cost control Concentration risk Access to credit and liquidity Sovereign and counterparty risk diversification and growth OPERATING RISK Centralization Interoperability Real-time information Standardization efficiency and standards REGULATORY RISK Basel III Risk management Sarbanes Oxley, IFRS Single Euro Payments Area regulatory reform

31. 30 Working Capital Optimization Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table U.S. Liquidity Trends Safety, increased visibility and access to funds Regulatory Rapidly changing regulatory environment Low-rate environment Global macroeconomic challenges and sluggish growth leading to depressed yields on cash Visibility Requirement to see real-time information for cash positions across multiple entities and regions Liquidity Management Effective deployment of cash management to respond to changing regulatory environment Global Liquidity Structure Tailoring liquidity globally to capitalize on yield-producing opportunities Online tools Leverage advanced technology to view cash position and investments in real time Key challengesLeading practices Simplification Safety Visibility Automation

32. Payments and Receipts Trends

33. 32 Automating Through Technology Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: PayStream’s Invoice Automation Adoption Survey 2011 80% challenge for treasurers in reaching a desired operating model: business unit relationships Standardized file types Standardized security Standardized system integration Universal messaging standards Improving Processing Through Automation StandardizeSimplify

34. 33 Invoice Automation Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: Electronic Supplier Payments PayStream Advisors Q2 2012 Payment Trends Invoice automation Converting paper to electronic 1. Supplier not willing to adopt electronic payments (54%) 2. Shortage of IT resources (40%) 3. System integration (27%) Current challenges of adopting invoice automation 1 Technology = competitive advantage Solutions companies are implementing

35. 34 Checks On The Decline In The U.S. Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: Electronic Supplier Payments PayStream Advisors Q2 2012 Payment Trends Checks 68% of corporations in 2011 were writing fewer checks  78 % increased use of ACH  Half of respondents reported an increase in Purchasing Card transactions  Third of respondents reported an increase in Wire transfers ACH Purchasing Card programs Wire Current trends 1 Solutions companies are implementing

36. 35 Fraud Prevention Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: AFP Payments Fraud and Control Survey 2011 Payment Trends Fraud Prevention Altered checks Stolen cards Organized crime Malicious insiders Hacked systems Current Issues Solutions Companies Are Implementing Fraud prevention solutions for paper payments are in demand  Positive Pay solutions  ACH Positive Pay solutions  Payroll Card solutions  Stale Date and Maximum Dollar Control  Check Outsourcing

37. 36 Centralization Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: Fifth Annual Cash Management Survey in association with SEB (2010) GT news 52% of corporates indicated they plan to move to a centralized payment structure Payment Trends Centralization  Information Reporting  Single file payment types: ISO 20022 XML, SAP IDoc, ASC X12 EDI, EDIFACT  Card and ACH Payments  Ghost card  Outsource payments Decentralized payment structureCentralized payment structure Current Environment Solutions Companies Are Implementing

38. 37 Fed Extended Remittance Wire Format Change Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: AFP survey, May 2009 95% of companies indicated including business remittance information with a wire would be “valuable” Payment and Receipt Trends Wire format change The industry support the Fedwire Extended Remittance information format Information Reporting Receipts:  Lockbox  Remote Deposit Service Online  Automated Clearing House  Wire Transfer  Electronic Data Interchange  Remote Payments Online  Collection of Consumer Online Banking Payments 9,000 characters of remittance information Enable businesses to more accurately identify incoming payments and post them to the correct accounts without manual intervention Recognizing the value of remittance information to business, the Federal Reserve Banks and the Clearing House expanded remittance information formats for wire on November 21, 2011.

39. 38 Receivables Management Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: CEB TowerGroup Edge (February 2012) 35% projected global spend growth for receivables management technology Receipt Trends Centralization and standardization of receivables Receivables Challenges: jurisdiction regulatory/tax issues, invoice detail sharing, customer contact, and varied clearing standards/payment methods Drivers: regulatory reform (SEPA), invoice matching tools, virtual account management, global liquidity overlays and single FX rates Receivables ProcessingReceivables Management Current Environment Benefits Companies Are Seeing  Cost savings  Greater efficiencies  Collections/reconciliation automation (STR)  Enhanced customer service  Enhanced relationships  Improved payer behavior  Enhanced DSO  Cash forecasting  Stronger commercial and operational risk management

40. 39 Go Green And Process Efficiencies Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: Aberdeen Group (Jul 2011),"The Order to Cash Cycle: Enhancing performance with process Automation" 36% of corporates want to reduce receivables processing time and cost 1 Receipt Trends Finding efficiencies in receivables processing  Image Lockbox  Remote Deposit  Internet Gateway Solutions Going GreenPotential Solutions Reduce paper processing:  Convert paper document to electronic  Evaluate whether processes are environmentally friendly  Educate consumers about electronic bills, statements and payments over paper alternatives Cash Processing Efficient processing and early credit with the bank for cash:  Faster posting and positioning for deposited cash  Avoid risk of employees transporting cash  Just-in-time change and currency  Combine transportation management requirements  Cash Vault  Smart Safes  Deposit ATM Cards

41. 40 Efficiencies Through Consolidations Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: USPS press release, May 2012 36% of corporates want to reduce receivables processing time and cost 1 Receipt Trends Operation site consolidations Potential Solutions  Image Lockbox  Image Cash Letter  Remote Deposit The US Postal Service As Well As FIs Are Streamlining Operations USPS: USPS site consolidations still under review  Next day delivery of first class mail coverage minimized Paper processing sites are consolidating due to accelerated image exchange:  Banking centers are enabling image capture  Item processing, vaults and returned item paper volumes continue to decline

42. Integration Trends

43. 42 Data Transmission Services Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: Bank of America Merrill Lynch 3% Transmission accounts increased three percent year-over-year Integration Trends Data transmission services Protocol Trends New Setups 2011 HTTPS 44% FTP/PGP 29% FTP/SSH 11% SSL/FTP 7% Connect Direct 7% AS2 2% Traditional  HTTPS  FTP with PGP  sFTP (FTP with SSH)  FTP with SSL  AS2  VPN Emerging  SWIFT FileAct (requires SWIFT Corporate Access membership) Traditional data transmission services (authentication and encryption are required)

44. 43 Mobile Banking Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: IDC Financial Insights press release, 2010/0712 $245 billion Mobile payment services expected to reach $245 billion in value by 2014 1 Integration Trends Mobile banking Mobile offers another channel to meet your electronic mobile banking needs.

45. 44 Securing Files Using Digital Identity Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: Bank of America Merrill Lynch 53% corporates expect they will eventually require digital signatures as a means of securing the files they send and receive Integration Trends Digital identity Enterprise level authentication process, able to bridge multiple channels with interoperability between multiple banks and accounts. In lieu of ink signatures consider:  IdenTrust digital identity token device  SWIFT 3SKey digital identify token device ONE LOG-IN ACCESS

46. 45 Cloud Technology Not Just For Media Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: Sand Hill’s 2011 “Leaders in the Cloud” Integration Trends Cloud technology for treasury services Cloud computing is next transformational technology wave since the Internet:  Has built in controls to ensure capability, security and value of delivering using cloud technology  Reduces the need to manage and monitor disparate applications  Acts as enabler for consumer’s treasury management services Cloud-based solutions:  Information Reporting  Cloud based vendor ERP solutions (e.g., SAP Business ByDesign; Oracle Fusion Applications; Lawson Enterprise Management Systems; NetSuite SuiteFlow)  SWIFT “cloud-based” connectivity

47. 46 What’s Most Important To Global Companies? Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Source: GT News survey. Commissioned by Bank of America Merrill Lynch Issues Very important Important Not important Not important at all

48. 47 What’s Most Important To You? Color Scheme 91 143 34 186 111 46 215 169 0 152 50 34 39 89 55 0 105 131 0 34 68 89 49 96 Accent 0 82 194 221 221 221 229 235 238 Table Discussion Issues Ideas Brainstorm Discuss Improve Specifics Customize Create Dialogue Solutions