Global Treasury
Management
Revised June 2012
About BMO
BMO Financial Group Overview

Established in 1817 as Canada’s first chartered bank

Ranked 8th largest bank in North America by total assets of US $532 billion1

Offering a full range of personal and commercial banking, wealth management, correspondent,
investment and corporate banking services in Canada and the U.S.

Serving over 12,000,000 clients, small and large, throughout North America

Serving over 800 correspondent banking relationships across 130 countries throughout the
globe

Serving over 40 Schedule I, II and III Banks and Credit Unions in a Direct Clearing banking
partnership

Nearly 1600, Branches and offices – 900+ Canada and International; 650+ in the United States
1. Source: (SNL Financial, 05/31/12)
BMO Financial Group
F2011 Net Income by Operating Group
Key Operating Data
Market Cap*
US$38 billion
Total Assets*
US$532 billion
F2011 Revenue
US$13.6 billion
Employees*
46,500+
Private Client
Group
15%
59%
Personal &
Commercial
Banking
26%
*As at April 30, 2012
BMO Capital Markets
ADVISORY SERVICES
 Mergers & Acquisitions
 Strategic Advisory
 Fairness Opinions
 Takeover Defense
 Share Buybacks
 Valuation Analysis
CORPORATE FINANCE
 Initial Public Offerings
 Follow-on Offerings
 Convertible Securities
 Mezzanine Lending
 High-Yield Debt
 Investment-Grade Debt
 Corporate Lending
 Securitization
 Private Placements
SALES & TRADING
 Institutional Sales
 Trading
 Equity Research
 Fixed Income Research
 Investor Marketing
 Investor Conferences
 Account Sponsorship
 Retail Distribution
3
TREASURY SERVICES
 Cash Management
 Risk Management
 Asset Management
 Foreign Exchange
 Trade Finance
Global Treasury Management at BMO Capital Markets

Sophisticated web-based treasury management platform
with 15,000 Online Banking for Business customers, and
50,000 Online Banking for Business users

Global service and solutions

Extensive payment, receivables and information
reporting capabilities

Actively shaping the future of the payments industry:
 Member of Canadian Payments Association, NACHA
and American Bankers Association

We Process:
Transactions
Value
Wire
Payments
318,528
Canadian dollar
payments per
year
CAD $915 billion
All of BMO: 1 Million
Items
Founding partner of Symcor and Moneris, leading
providers of payment processing
Electronic
Payments
321 million EFTs
processed per
year
CAD $925 billion
Paper
Payments
223 million
checks per year
CAD $854 million
Full-service treasury management provider for over 35 years
4
All of BMO: $1.3 Trillion
Our Solutions
What Sets Us Apart

Commitment to service

Continued investment in our business

Experience, cross-border expertise and scale

Global solutions

High quality, proven solutions

Customizable solutions that produce highly-satisfied customers

Highly-satisfied customers

Trusted treasury management advisor
Superior service. Working capital expertise. Innovative solutions.
6
Information Solutions
Information Solutions
Online Banking for Business
8
Online Banking for Business Overview

Online Banking for Business is a web-based cash
management solution

Real-time account information (mech accounts only)

Single source for all treasury management products
and reports


Flexible administration tools
Ability to designate multiple users and approvers

Receive Alerts

Make timely and informed business decisions

Save time with easy, anywhere access

Gain added security and control

Only need a PC and an Internet connection

You can choose the services you need today and add
modules as your business needs change
Online Banking for Business supports full single sign on and private label functionality enhancing the end client
experience
Online Banking for Business: Our Web-Based
Treasury Management Platform
Online Banking for Business features:
 Account Information
 e-Statements













Account Transfers
AutoConnect
Stop Payments
Electronic Funds Transfers
Tax and Bill Payments
File Transfers & Cross-Border Transfers
Centralised Customer Self-Administration
DirectCheque Stops and Inquiries
Wire Payments
Check Image Search
Bulk Image File Delivery
Archiving
Alerts & Notifications
Select the modules you need today and add services as your business needs change
10
Online Banking for Business: Benefits
Increased control

Timely information allows customers to make informed business decisions

Customers can control their own administration by setting up and deleting users in seconds, as well as
resetting user passwords
Convenience

Allows customers to access their account information and perform transactions around the clock - from their
own PC

Customers can receive all of their cash management reports electronically through file transfer facility
Flexibility

Tailor services to match their specific needs

Choose only the modules they need today and add modules as their business grows
Security

Online Banking for Business uses 256-bit encryption, the strongest form of encryption generally available in
Web browsers today

Requires 2 levels of user IDs and passwords

Ability to limit user access by account, report template, transaction type and dollar amount
Online Banking for Business: Our Web-Based
Treasury Management Platform

Flexible administrative tools allow you to:
 Set up and delete users, reset passwords
 Set up alerts and notifications of incoming, outgoing and pending transactions, exception items, available statements, user
information and balance thresholds





The Online Banking for Business platform maintains a multi-level security system that includes:
 Minimum 256-bit encryption, firewalls and system controls





Create customized user profiles and assign access to accounts and service modules
Set dollar amount limits and approval requirements on payments
Generate admin reports that allow you to comply with SOX requirements by tracking all admin changes and documenting user
entitlements
Automate and schedule the secure downloading of Online Banking for Business reports
Two sets of user IDs and passwords; mandatory password changes
Up to 3 administrative approvals
An authentication device for payments
System time-outs for inactivity and log outs for incorrect password attempts
Optional Security Features:
 Limit administrators to have Administrative Privileges only

Add Multiple Approvals for all administrative changes
Comprehensive administrative and security features put you in control
12
Connecting to the Bank – High Speed Connectivity

BMO launched new high speed connectivity options to exchange files with customers. The new
options are offered in conjunction with GXS (Global eXchange Services).

Supporting the most widely used communication protocols including AS2, Secure FTP, and VPN;
GXS is able to meet and exceed our customers robust needs.

GXS offers special connectivity that customers currently do not receive via Online Banking for
Business FTF (e.g. scripting). New options address the needs of both large corporate customers and
small businesses who require automated file exchange.

These features help our customers to automate file exchange with much needed confidentiality,
speed, integrity, and authentication of transferred data

New options address the needs of both large corporate customers and small businesses who require
automated file exchange
File Connectivity - Benefits

Improved, Dependable, and Secure access anytime anywhere via the internet

Increased Flexibility and Time Saving by automating file and report processing

Improved Integration and Cost Savings for companies of any size by using the latest industry
standard business to business technology

Customers may select from various connectivity options offering real time communication

Manual operator may not be required; therefore minimizing the risk of file manipulation (SOX
compliance)
GXS vs FTF
Features
File Transfer
Facility
GXS
High Speed Internet Access Available
Server to Server
Transmission
Not Available
Scripted Automated File
Exchange
Not Available
Available
Encryption
Available
Available
128 Bit Encryption
No - Manual
Operator required to
process files
256 Bit to VPN IPsec
Encryption
Yes – Encrypted,
Automated, and can be
Scripted
Security
Compliance Component
e.g. SOX
Ability to Transfer Large
Files
(Over 10 Mega Bytes)
Technology Support /
Maintenance
Image Transfer (Future)
Not designed to
transfer large files
Supported and
updated
Not Available
Available
Available
Able
Supported and updated
Available
Payables Solutions
Payables Solutions
17
DirectCheque

A low cost, fully automated check processing and reconciliation service
designed for businesses that issue a high volume of checks
Checks issued
Features

Checks are cleared and sorted by serial number

Our check validation service combines:
 Positive Pay option matches check serial numbers and amount to your
issue file
 Optical Character Recognition used to match the recipient name and
address in your issue file

Make decisions to accept or return checks online

Reconciliation reports are produced to coincide with your accounting cycle
Daily file sent to BMO
Benefits

Streamline check processing and reconciliation

Mitigate the risk of fraud
Once checks are
cleared, the
cancelled checks and
paid item file is
returned to you
Mitigate check fraud through the use of Positive Pay
18
Firstbank Automated Clearing System (FACS)

A convenient and efficient alternative for check clearing that employs highspeed check reading technology for clearing and processing
Features

Receive a Paid Item File (PIF) detailing paid check information on a next day
basis

Choose from numerous reporting options available, both paper-based and
electronic

Choose to have cleared items returned daily or checks retained at the Bank
for up to 30 days

Thousands of images received of your cleared checks via our bulk image
delivery service
Benefits

Maintain control over check verification, returned items and stop payments

Facilitate accurate record keeping
Checks are processed
by the Bank using
high-speed check
clearing and MICR
technology
Cleared checks are sorted
in date, amount or check
serial number order and
packaged for client pick
up, dispatched directly or
retained by the Bank for
up to 30 days
Paid Item File is
available in hard copy or
via any of the supported
electronic file
connectivity options
A check clearing alternative for large volume check issuers
19
Electronic Funds Transfers (Credits)

A convenient and cost-effective way to electronically credit employee
and supplier accounts at any Canadian financial institution in
Canadian or US dollars
You send payment
files to BMO
Financial Group
Features

Create electronic payments and transmit files via the Online Banking
for Business platform

Perform online tracing, corrections and recalls through a single
application

Recall individual credits, batches or whole payment files

Reports are delivered electronically
Access a full
range of online
post-file
delivery
functions via
Online Banking
for Business
Benefits

Control timing of payments

Reduce operational costs

Reduce the risk of late payments
Funds are
deposited directly
to payee accounts
at BMO or other
financial institutions
Most robust range of post-file delivery functions available in the Canadian market
20
Outbound Wire Payments

A comprehensive wire payments management service that enables you to
initiate Canadian and US dollar wire payments easily and efficiently from
your office computer.
Features

Send one-time payments or create payment templates for recurring
transactions

Import wire payment instructions

Future date payments up to 30 days in advance

Receive customized summary and detail reports

Provides full control over outgoing wires, post transaction amendments,
cancellations and investigations

Approve and release wire payments through your iPhone or Blackberry
You submit
payment
instructions to
BMO Financial
Group
electronically
BMO Capital Markets
processes your
payment instructions
and forwards the
funds to the payee’s
financial institution
Benefits

Finality of payment

Increase security and control

Send payments quickly and easily from your PC
Send Canadian and U.S. dollar wire payments from your PC
21
Tax and Bill Payments

An easy and convenient way to submit utility and corporate bills, as well as
Federal and Provincial tax payments via the Internet
Features

Convenient web access

Easy-to-use payment templates

Enter payment details by midnight the day before due date or up to one year in
advance

Receive tax refunds faster, right into your account.
Benefits

Control timing of payments

Reduce the risk of late payments

Reduce paperwork

Simplify record keeping and reconciliation
Submit utility and
corporate bills, federal
and provincial tax
payments electronically
and track payment
details online
Fully web-enabled through the Online Banking for Business Platform
22
Imaging Services
Check Image Search:

Flexible search options

Download and print options

Archive available as far back as 100 days
CD/DVD ROM:

Easily search, retrieve, view, download and print images of
processed checks individually or in batches

Choice of CD (up to 15,000 images) or DVD (up to 100,000
images)

Encrypted images offer increased security
Bulk Image Delivery

Daily, electronic delivery of check images

Optional (PGP) Pretty Good Privacy file encryption available for
extra internet security
Images can be accessed in a variety of ways: online, via CD/DVD; or via electronic file delivery
23
Payables Outsourcing

A fully automated payment processing service that offers the
flexibility of initiating paper and electronic payments through a single
file
You send a
payment file to
BMO Financial
Group
Features

Send a single payment file to execute multiple payment types

Payment files are validated for accuracy

Receive summary and detail reports online

Digitized signatures and printed checks are held under dual custody

Benefits

Streamline payment processing

Mitigate the risk of check fraud

Reduce check printing costs
We process and deliver
the payments in the
requested format
Vendor
•
•
•
•
•
•
Wire transfers
EFT – BMO (CDN/US)
ACH – Harris (US)
Financial EDI – BMO
(CDN)
Financial EDI – Harris
(US)
Check printing
Streamline payment processing by initiating paper and electronic payments through single file
24
EDI Origination

A computer-to-computer electronic business exchange that facilitates
the electronic payment of funds and related payment data
You send the
payment file and
remittance advice
to BMO Financial
Group
Features

Choose from several remittance data delivery options without having
to be EDI-capable

Send payments and supporting documentation on the value date
Benefits

Control timing of payments

Reduce processing costs and errors

Improve trading partner relationships
Vendor
Funds and
supporting
information are then
forwarded to the
payee’s financial
institution
Electronically submit payments and accompanying details to your business partners
25
Receivables Solutions
Cash Concentration – Between BMO Accounts

Consolidate deposits into your central BMO business account for
fast, convenient access to your funds.
Features

Deposits are automatically consolidated

Deposits can be made at select BMO Bank of Montreal branches

Detailed consolidation reports are available online

A 25-character alpha-numeric message field provides supporting
information
Benefits

Receive immediate access to funds

Minimize excess balances

Monitor deposit activity of individual outlets
The deposits are
automatically moved
to your central BMO
account
Your outlets
deposit funds
at selected
BMO
branches
Receive
detailed
consolidation
reports
Improve cash flow by consolidating deposits from multiple locations into a central account
27
Cash Concentration – Between Financial Institutions

Consolidate deposits made at any Canadian deposit-taking institution into your BWB account – by phone or web. Your business
outlets can deposit funds at the nearest financial institution, while you retain quick and easy access to your funds
Features

DrawCheque transfers can be completed online or via a toll-free IVR system

24x7 access via the web; extended hours access to the IVR system

Same day value for payments received by 7:00 PM ET

Funds are are deposited into your account three times each day

Third-party transfers between B2B relationships for Accounts Receivable purposes
Benefits

Enjoy convenient and cost-effective deposit management and funds concentration

Access comprehensive on-line reports and 90-day rolling archive

Minimize risk with advanced security controls and optional dual-authorization

Control access through user-friendly online administrative tools
Conveniently and cost-effectively consolidate deposits into a central BMO account
28
Electronic Funds Transfers (Debits)

A convenient and cost-effective way to electronically debit your
customers’ accounts at any Canadian financial institution in Canadian
or U.S. dollars
Features

Create electronic debits and transmit files to the bank online

Perform online tracing, corrections and recalls through a single
application

Reports are delivered online

Recall individual debits, batches or whole payment files

Benefits

Control the timing of payments

Increase operational efficiencies

Improve customer relations
Access a full
range of postfile delivery
functions via
Online Banking
for Business
You send
payment files to
BMO Financial
Group detailing
your preauthorized debits
Funds are
automatically
debited from your
customers’
accounts on the
value date and
deposited into your
BMO account
Most robust range of post-file delivery functions available in the Canadian market
29
Wholesale Lockbox

An automated receivables processing solution that accelerates your
B2B check-based remittances and consolidates deposits into a single
account
Features

Multiple processing sites across Canada

Funds are consolidated into a single account

Receive detailed transaction reports and daily deposit advice packages

Access and retrieve images online

Receive thousands of images at a time via our bulk image delivery
service
Benefits
Checks and
supporting payment
data are mailed to
strategically located
Canada Post postal
stations
BMO collects
payments directly
from Canada Post
and processes
them for same-day
credit
Receive a
daily file with
all remittance
data
information

Reduce mail float

Reduce processing costs and effort

Consolidate deposits into a single account

Convenient imaging options online, CD-ROM or Bulk Image Delivery
service
Improve cash flow by automating the processing of your check-based remittances
30
Remittance Consolidation

A flexible receivables service that consolidates paper and electronic
payments made through BMO or other Canadian financial institutions
Features

Receive same-day credit for all payments made through BMO

Consolidate payments made at other financial institutions

Receive a daily payment report and/or file
Your customers
submit payment
by:
•
•
•
•
Internet
Telephone
ABM
Branch
Benefits

Consolidate funds from multiple sources and deposit to single account

Reduce manual payment processing

Reduce the incidence of late payments
Receive daily file
with all remittance
data information
Receive same business day value for all payments made through BMO
31
The funds are
credited directly to
your BMO account
Electronic Chargebacks

Receive electronic notification of chargebacks that occur when a check you
deposited to your business deposit account is returned by your payer's
bank.
Features
Continue to receive a physical copy of:

The Electronic Chargeback file captures the reason the check was returned,
the name of the payer and MICR information of checks.

A Null File is delivered if there were no chargeback check for that
processing day.

Continue to receive a Return Item Advice for any dishonored items.
Chargeback Images
• Black and white
• Front and back
Chargeback Advices
• Provides reason for return
• Includes advice #
Benefits

Turn the manual process of dealing with chargebacks into an easy
automated process.

Be quickly notified of returned items and easily update your own database
with information on the items that have been returned to you.

Decision your checks faster.

Collect funds owed faster and better manage your cash flow.

More easily flag potential bad accounts and possibly hold back shipments
Turn the manual process of dealing with chargebacks into an easy automated process .
32
Incoming Wire Payments

A convenient way to receive customer payments electronically from both
domestic and international locations
Funds are wired
to BMO from
anywhere in the
world
Features

Domestic and international payments

Multiple notification options through FAX, Online Banking for Business
and others.

Up to 140 characters of reference information

Full amount of wire payment credited with fee charged as a separate
transaction
Benefits

Receive irrevocable payments from anywhere in the world

Track and identify payments easily
The incoming
funds are credited
to your account as
soon as they are
received by the
bank …
Receive domestic and international payments quickly and easily
33
… receive an
optional faxed
payment advice
immediately
EDI Collections

A computer-to-computer electronic business exchange that facilitates
the electronic collection of funds and related payment data
Features

Choose from several remittance data delivery options without having
to be EDI-capable

Receive funds and supporting documentation on the value date
Payor’s FI
Payor
The payor transmits
the payment file and
remittance advice to
their financial
institution
Benefits

Improve cash flow

Eliminate manual processing

Improve trading partner relationships
You view
payment
information via an
electronic file or
by fax
Funds are then
transferred to
BMO and credited
to your BMO
account
Receive payments and accompanying details from your business partners electronically
34
Customization
Customized Information Delivery

BMO’s expert advisory service that reviews your multiple data sources and recommends a quick and easy integration
solution with output files or reports tailored to your specifications.

Performed entirely by BMO’s IT mapping team freeing up your internal resources


Supports informed decision making with targeted management reports
A streamlined process delivers:

Reduced costs through automation and ERP integration

Seamlessly integrated data with your existing in-house accounting software and systems

Improved capabilities to accelerate data exchange and reduce barriers to partnerships




Ability to monitor transaction data end-to-end
Can reduce delays and errors created by multiple application, system fixes and patches
Can deliver reports based on preferred format and/or map to an industry standard externally such as XML
Convenience and Security - can be combined with our existing BMO line of products i.e.
EFT/Wires/DCH/EDI/others and secure high-speed transmission methods i.e.: GXS with PGP encryption option or
FTF (File Transfer Facility)
One-stop shop for all your mapping needs
35
Appendix
Industry Trends
Technology
Market

Web-based service delivery platforms

Corporate treasury centralization & “in-house” banking

Image technology initiatives


Connectivity and integration challenges associated
with web services (STP)
Business process outsourcing (BPO) of treasury
functions

Service provider consolidation – consultative
partnerships with preferred vendors

Cash flow visibility through treasury automation

Paper to electronic payment conversions
Regulatory

Sarbanes Oxley – Implications for Canadian
organizations

Evolving role of the CPA in the technology-driven
payments arena
Keeping you informed is our business
37
CPA Rules Regarding Check Fraud
Reason
Time Frame to Return Via Clearing
Altered item:
90 days
Original check (amount, payee, and/or date) has been
changed without the knowledge or consent of the issuer
Counterfeit:
Next business day
A reproduction of an original, legitimate check
Missing Endorsement:
Up to 6 years in the clearing
Signature of drawer is missing
Forged drawer:
Signature of drawer (person or company issuing the check)
has been forged
Next business day
Forged endorsement:
Unlimited (CPA)
Signature/endorsement of payee has been forged
Bills of Exchange Act requires drawer to notify drawee bank
within 12 months
38
CPA Rules Regarding EFT Exceptions
Reason
Time Frame to Return Via Clearing
Unauthorized debit with PAD agreement

Business - 10 calendar days after date on which the PAD
was processed to payor’s account

Personal – 90 calendar days after date on which the PAD
was processed to payor’s account
Unauthorized debit without PAD agreement

90 calendar days after date on which the PAD was
processed to payor’s account
EFT credit error correction

No later than 4 business days after delivery of the original
credit transaction
OR
39

3 Business days after the date the funds are to be made
available of the original transaction (e.g. late transactions)

*It should be noted that both recourses are contingent on
the funds being available to retrieve
BMO – Your Partner in Fighting Fraud

Web-based treasury management – Online Banking
for Business:
 Access management
 Session management
 User management - transaction, account and user
thresholds and controls
 Secure transactions
 File confirmation

Payables Plus – payables automation and
outsourcing – EFT, EDI, wires, check

Positive Pay/Reverse Positive Pay – check fraud
prevention tools

Check imaging
40
Disclaimer
These materials are confidential and proprietary to, and may not be reproduced, disseminated or referred to, in whole or in part
without the prior consent of BMO Capital Markets (“BMO”). These materials have been prepared exclusively for the BMO client or
potential client to which such materials are delivered and may not be used for any purpose other than as authorized in writing by
BMO. BMO assumes no responsibility for verification of the information in these materials, and no representation or warranty is
made as to the accuracy or completeness of such information. BMO assumes no obligation to correct or update these materials.
These materials do not contain all information that may be required to evaluate, and do not constitute a recommendation with
respect to, any transaction or matter. Any recipient of these materials should conduct its own independent analysis of the matters
referred to herein.
“BMO Capital Markets” is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal,
Harris N.A. and Bank of Montreal Ireland p.l.c., and the institutional broker dealer businesses of BMO Capital Markets Corp., BMO
Nesbitt Burns Trading Corp. S.A., BMO Nesbitt Burns Securities Limited and BMO Capital Markets GKST Inc. in the U.S., BMO
Nesbitt Burns Inc. in Canada, Europe and Asia, BMO Nesbitt Burns Ltée/Ltd. in Canada, BMO Capital Markets Limited in Europe,
Asia and Australia, and BMO Advisors Private Limited in India.
BMO does not provide tax or legal advice. Any discussion of tax matters in these materials (i) is not intended to be used, and
cannot be used or relied upon, for the purposes of avoiding any tax penalties and (ii) may have been written in connection with the
“promotion or marketing” of the transaction or matter described herein. Accordingly, the recipient should seek advice based on its
particular circumstances from an independent tax advisor.
41