Technology and Treasury Trends
Central Florida Government Financial Officers Association
Chapter Meeting
February 8, 2013 | 1:00 p.m. to 3:00 p.m.
Agenda
 Introduction
 Did you know?
 ’60s
 ’70s
 ’80s
 ’90s
 2000 and beyond
 Think Tank (game)
 Q&A
2
Introductions
Biography
Glenna Thompson
Bank of America
Vice President
Treasury Solutions Officer
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.
4
Biography
Evan Tullos
Bank of America
Senior Vice President
Senior Card Account Manager
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.
5
Biography
Kathryn Sikes
Bank of America
Senior Vice President
Senior Client Manager
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).
6
Did You
Know?
7
1960s
Timeline
Cuban Missile Crisis
1962
1961
Berlin Wall Built
Beatles become
popular in the U.S.
1964
1963
Marin Luther King
makes his “I have a
dream” speech
Mass draft protests
in U.S.
1966
1965
Japan’s Bullet Train
Opens
Martin Luther King
assassinated
1968
1967
First heart transplant
First super bowl
1969
Neil Armstrong
becomes the first
man on the moon
Rock-and-Roll
concert at
Woodstock
9
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.
10
1970s
Timeline
Mark Spitz wins
seven gold medals
U.S. President Nixon
resigns
1972
1971
United Kingdom
changed to decimal
system for currency
Nadia Comaneci
given seven perfect
tens
1974
1973
Sears tower built
First test tube baby
born
1976
1975
Microsoft founded
1978
1977
Elvis found dead
1979
Margaret Thatcher
first women Prime
Minister of Great
Britain
Sony introduces
the walkman
12
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.
13
1980s
Timeline
The Apple Lisa invented.
Soft bifocal contact lens
invented.
The first 3-D video game
invented.
First Cabbage Patch Kids
sold.
Programmer Jaron Lanier first
coins the term "virtual reality".
1983
1981
Windows program
invented by Microsoft.
1985
1984
MS-DOS invented.
The CD-ROM invented.
The first IBM-PC
invented.
The Apple Macintosh
invented.
Disposable contact
lenses invented.
High-definition
television invented.
1987
1986
Fuji introduced the
disposable camera.
1989
1988
Digital cellular phones
invented.
Doppler radar invented by
Christian Andreas Doppler.
15
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.
16
1990s
Timeline
The World Wide Web and
Internet protocol (HTTP) and
WWW language (HTML)
created by Tim Berners-Lee.
The Pentium
processor invented.
Web TV invented.
1993
1990
1991
The digital answering
machine invented.
1996
1995
The Java computer
language invented.
DVD (Digital Versatile
Disc or Digital Video
Disc) invented.
1997
The gas-powered fuel
cell invented.
18
1990’s The Longest
Economic Expansion
Interstate Banking and Branching Efficiency Act allowed
banks to engage in interstate branching outside of its
home state.
19
2000 & Beyond
The New Millennium Timeline
US Dept of
Homeland Security
Do Not Call List
9/11
2001
2000
New
millennium
Hurricane Katrina
2003
2002
The Euro
introduced
2005
2004
Mars Exploration
Rovers
Water is
discovered on the
Moon
Global economic
downturn
2007
2006
Pluto is demoted to
"dwarf planet"
status
2009
2008
Artificial DNA
Privately funded
human spaceflight
21
Technology in the 2000s
Portable (and
ultra-portable) PCs
iPhone
Wikipedia
Apple iPod
MySpace
2001
2000
dot-com
bubble bursts
2003
2002
Apple iMac G4
YouTube
Kindle
USB flash drives
Google Street View
2005
2004
Web 2.0
Facebook
Mind control
headsets for
gamers
2007
2006
Twitter
2009
2008
Scientists extract
images directly
from the brain
Artificial DNA
22
2010s Timeline
2010
Haiti earthquake
2011
2012
Japan earthquake and
tsunami
The Diamond Jubilee
of Queen Elizabeth II
Death of Osama bin
Laden
Facebook IPO
BP Oil rig explosion
As The World Turns
Final Episode
Greece debt crisis
Wikileaks
Mayan calendar
approaches
the end
Toyota recall
Pakistan flood
23
2010s Timeline
2010
2011
iPad
iphone4
2012
Windows 8 is
released
Scientists create
synthetic life
Multi-touch surface
computing
Quad-core smartphones
and tablets
Scientists trap antimatter
The first open petaflop
supercomputer comes
online
Nintendo launches the
Wii U
Speech-to-speech
translation in mobile
phones
22 nanometre chips
enter mass production
Consumer-level robotics
are booming
24
Government thinking: the Future is Now
 Integrated application design
 Digital Identity
 Wet signature technology vs. digital signatures
 Crowd Sourcing
http://www.govtech.com/technology/Tech-Trends-Public-Agencies-Should-Watch-2012.html
25
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.
26
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.)
27
Monitoring Global Trends
What’s most important to you?
50+%
Risk Management And
Mitigation
of CFOs experienced
increased responsibility in
risk management
Risk Management Trends
Identifying and evaluating risk factors
Drive for profitability and shareholder value...
diversification
and growth
efficiency
and standards
regulatory
reform
MARKET RISK
OPERATING RISK
REGULATORY RISK
Cost control
Centralization
Basel III
Concentration risk
Interoperability
Risk management
Access to credit and liquidity
Real-time information
Sarbanes Oxley, IFRS
Sovereign and counterparty risk
Standardization
Single Euro Payments Area
Source: CFO Magazine, “Keeping Cool in the Hot Seat” (March 1, 2012)
29
Working Capital Optimization
U.S. Liquidity Trends
Safety, increased visibility and access to funds
Key challenges
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
Leading practices
Simplification
Safety
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
Visibility
Automation
Online tools
Leverage advanced technology to view
cash position and investments in real
time
30
Payments and Receipts
Trends
Automating Through
Technology
80%
challenge for treasurers in
reaching a desired operating
model: business unit
relationships
Improving Processing Through Automation
Standardize
Simplify
Standardized system integration
Standardized file types
Universal messaging standards
Standardized
security
Source: PayStream’s Invoice Automation Adoption Survey 2011
32
Invoice Automation
Payment Trends
Invoice automation
Solutions companies
are implementing
Converting paper
to electronic
Technology = competitive advantage
Current challenges of adopting invoice automation1
1.
Supplier not willing to adopt electronic payments (54%)
2.
Shortage of IT resources (40%)
3.
System integration (27%)
Source: Electronic Supplier Payments PayStream Advisors Q2 2012
33
Checks On The Decline In The U.S.
Payment Trends
Checks
Current trends1
Solutions companies are implementing
68%
of corporations in 2011
were writing fewer checks
 ACH
 Purchasing Card programs
 Wire
 78 % increased use of ACH
 Half of respondents reported an increase
in Purchasing Card transactions
 Third of respondents reported an increase
in Wire transfers
Source: Electronic Supplier Payments PayStream Advisors Q2 2012
34
Fraud Prevention
Payment Trends
Fraud Prevention
Current Issues
Solutions Companies Are Implementing
Altered checks
 Positive Pay solutions
Stolen cards
 ACH Positive Pay solutions
Organized crime
 Payroll Card solutions
Malicious insiders
Hacked systems
 Stale Date and Maximum Dollar Control
 Check Outsourcing
Fraud prevention solutions for paper payments are in demand
Source: AFP Payments Fraud and Control Survey 2011
35
52%
Centralization
of corporates indicated
they plan to move to a
centralized payment
structure
Payment Trends
Centralization
Current Environment
Decentralized payment structure
Solutions Companies
Are Implementing
Centralized payment structure
 Information Reporting
 Single file payment types:
ISO 20022 XML, SAP IDoc,
ASC X12 EDI, EDIFACT
 Card and ACH Payments
 Ghost card
 Outsource payments
Source: Fifth Annual Cash Management Survey in association with SEB (2010) GT news
36
Fed Extended Remittance
Wire Format Change
95%
of companies indicated
including business
remittance information
with a wire would be
“valuable”
Payment and Receipt Trends
Wire format change
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.
The industry support the
Fedwire Extended Remittance
information format
Information Reporting Receipts:
 Lockbox
 Remote Deposit Service Online
9,000 characters of remittance
information
 Automated Clearing House
 Wire Transfer
 Electronic Data Interchange
Enable businesses to more accurately
identify incoming payments and post
them to the correct accounts without
manual intervention
Source: AFP survey, May 2009
 Remote Payments Online
 Collection of Consumer Online
Banking Payments
37
35%
Receivables Management
projected global spend
growth for receivables
management technology
Receipt Trends
Centralization and standardization of receivables
Benefits Companies
Are Seeing
Current Environment
Receivables Processing
Receivables Management
Receivables

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
Receivables
Receivables
Receivables
Challenges: jurisdiction
regulatory/tax issues, invoice
detail sharing, customer
contact, and varied clearing
standards/payment methods
Source: CEB TowerGroup Edge (February 2012)
Drivers: regulatory reform
(SEPA), invoice matching tools,
virtual account management,
global liquidity overlays and
single FX rates
38
36%
Go Green And Process
Efficiencies
of corporates want to
reduce receivables
processing time and
cost1
Receipt Trends
Finding efficiencies in receivables processing
Going Green
Potential 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
 Image Lockbox
 Remote Deposit
 Internet Gateway Solutions
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
Source: Aberdeen Group (Jul 2011),"The Order to Cash Cycle: Enhancing performance with process Automation"



Cash Vault
Smart Safes
Deposit ATM Cards
39
Efficiencies Through
Consolidations
36%
of corporates want to
reduce receivables
processing time and
cost1
Receipt Trends
Operation site consolidations
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
Potential Solutions
 Image Lockbox
 Image Cash Letter
 Remote Deposit
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
Source: USPS press release, May 2012
40
Integration Trends
Data Transmission Services
3%
Transmission accounts
increased three percent
year-over-year
Integration Trends
Data transmission services
Protocol Trends
New Setups 2011
Connect
Direct
7%
SSL/FTP
7%
FTP/SSH
11%
HTTPS
44%
Source: Bank of America Merrill Lynch
FTP/PGP
29%
AS2
2%
Traditional data transmission services
(authentication and encryption are
required)
Traditional
 HTTPS
 FTP with PGP
 sFTP (FTP with SSH)
 FTP with SSL
 AS2
 VPN
Emerging
 SWIFT FileAct (requires SWIFT Corporate
Access membership)
42
Mobile Banking
Integration Trends
$245
billion
Mobile payment services
expected to reach $245
billion in value by 20141
Mobile banking
Mobile offers another
channel to meet your
electronic mobile
banking needs.
Source: IDC Financial Insights press release, 2010/0712
43
Securing Files Using Digital
Identity
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.
ONE
LOG-IN
ACCESS
In lieu of ink signatures consider:
 IdenTrust digital identity token device
 SWIFT 3SKey digital identify token device
Source: Bank of America Merrill Lynch
44
Cloud Technology Not Just
For Media
Integration Trends
Cloud technology for treasury services
Cloud computing is next
transformational technology
wave since the Internet:
Cloud-based solutions:
 Has built in controls to ensure
 Information Reporting
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
Source: Sand Hill’s 2011 “Leaders in the Cloud”
DATA
 Cloud based vendor ERP
solutions (e.g., SAP Business
ByDesign; Oracle Fusion
Applications; Lawson Enterprise
Management Systems;
NetSuite SuiteFlow)
 SWIFT “cloud-based”
connectivity
45
What’s Most Important To
Global Companies?
Issues
Very important
Important
Not important
Not important at all
120
100
80
60
40
20
0
Source: GT News survey. Commissioned by Bank of America Merrill Lynch
46
What’s Most Important To You?
Discussion
Create
Ideas
Customize
Solutions
Brainstorm
Dialogue
Specifics
Discuss
Issues
Improve
47