Banking Without Borders
Product Training
Last Revised: June 2012
Contents

Banking Without Borders (BWB) Program Overview
 What is it?
 How does it compare to competitor’s offerings
 Target Market
 Value Proposition
 Offering
 Program Support

Product Training
 Accounts
 Concentrator Deposit Receivables Service
 FCCS
 Online Banking for Business
 Electronic Funds Transfer
 Wholesale Lockbox
 DirectCheque
 Tax and Bill Payments
 File Connectivity

Appendices
1
Program Overview
What is the Banking Without Borders (BWB) Program?

BMO sells its Canadian Treasury Management product suite to Correspondent Banks
headquartered in US, Canada, Europe or Asia

The Correspondent Bank then “resells” these cash management products to their client base to
enable these clients to bank in Canada, while maintaining one single banking relationship with
them, their primary provider

The Correspondent Bank controls the account and remains the primary contact with their client

BMO has been working with correspondent banking partners for over 20 years and currently have
over a 12 partners on the BWB Program

Our program is flexible - we work with our partners to tailor our offer to their needs

Demonstrated success at driving value for correspondent banks and their clients
3
Competitor’s Offerings

Of the 6 major financial institutions in Canada only a few offer a similar program to BMO’s
Banking without Borders

Their offerings are typically a more standard offering that does not allow them the flexibility of the
Banking without Borders Program

BMO has a dedicated group that has been trained to deal specifically with Financial Institutions
on the program. This enables them to have the experience to troubleshoot issues effectively and
make recommendations

BMO offers a training program to the sales groups of our partners so that they can develop their
understanding of the program and the benefit to their clients
4
Target Market
The BWB Program will meet the needs of a Bank who has clients that:

Have branches, offices or sales activities in Canada

Have business dealings in Canada but manage treasury functions from their head-office

Regularly deposit Canadian dollar instruments to their account with you

Want to collect funds, make payments and receive information from Canada – quickly and easily

Prefer a trusted source with whom they already have a local banking relationship

Do not want the complexity of managing new, multi-national banking relationships
5
Value Proposition –
Differentiation Based on Relationship and Convenience
For You – Deeper Relationships

More Capabilities: Protected and enhanced
relationships with your clients

More Resources: Minimal investment and effort

More Solutions: Provide leading edge crossborder cash management and treasury solutions
to your clients

For Your Clients – Convenience
New sources of Revenue
6

Convenience: Maintain their banking
relationship with you – their trusted banker
 Seamless access to robust Canadian cash
management and treasury solutions
 Improved cash management

Value: Reduced cost and complexity

Service: Reduced complexity associated with
other international banking relationships
Overview of Different Models
Mutual Corporate Client (MCC)

Bank to bank agreement

Client signs with BMO directly

Client Of Correspondent Banking (CCB)

Account are jointly owned/controlled by INSERT BANK NAME and
your client
INSERT BANK NAME client signs the “Mutual Corporate
client (MCC) Authorization”

INSERT BANK NAME and your client both sign the “Agreement for
CCB Accounts”

INSERT BANK NAME client signs the appropriate BMO
service agreement

INSERT BANK NAME to provide BMO with requisite account open
material

INSERT BANK NAME Bank completes the appropriate
BMO Implementation forms gathering input from the client

INSERT BANK NAME Bank completes the appropriate BMO
Implementation forms gathering input from the client

Forms submitted either using paper, either via email or mail

Forms submitted either using paper, either via email or mail

INSERT BANK NAME clients can operate on a pre-funded
or via credit lines carved from the INSERT BANK NAME
credit lines at BMO

INSERT BANK NAME clients always operate with credit support from
INSERT BANK NAME lines at BMO.

Prefunding is not supported

INSERT BANK NAME has access to real time activity on their clients
on BMO’s Correspondent Banking portal CDA Web

BMO can deliver MT940 or BAI file with previous day data to INSERT
BANK NAME
Account Structure
Documentation
Forms
Implementation
Forms
Credit Risk
Controls

Information
Reporting


INSERT BANK NAME clients have access to real time
information online
Online Banking for Business is slated for a private label
and single sign on capability in upcoming releases
BMO can deliver MT940 or BAI file with previous day data
to INSERT BANK NAME
BMO supports several models within our Banking Without Borders program
7
Team Approach with Dedicated Resources
Relationship &
Sales
Management
Program
Management
POD
Team

Team Model: Manage our relationship and the success of your
program

Partnership: Work closely with you to meet your needs

Program: Strategic focus on today and future

Expertise: Dedicated POD with Banking Without Borders
program training
Your Dedicated Team
Sales Manager: Marcia Cowan
Client Service: Munira Gohill, Brian Liu
Senior Sales Associate: Rebecca Patton
Help Desk: Adam Hewitt, Maria Kadomtseva, Yousouf
Mohoboob
Program Manager: Sarah Cairns
Implementation: Khatra Haji, Frank Morelli
Senior Product Manager: Jay Pickett
Documentation: Stephanie Chan
8
Program Support - Web Site
9

Pitch Book Template

White labelled marketing
materials

Fact sheets

Legal forms

Learning tools

Process Flows
Our End-to-End Program Management Approach
Strategic Alignment

A flexible program tailored to suit the needs of you and your clients

A collaborative relationship to deliver on your strategy and promise to your client’s
Program and Products

We work with you, our banking partner, to determine the ideal solution to offer your client

Our delivery model is customized based on your client delivery strategy

The entire BMO Treasury Management product suite is available to you
Sales Support and Training

Tailored training for your team

Dedicated sales support for complex deals and RFPs
Implementation

Dedicated implementation support

Dedicated documentation and account opening support

All your customer implementations are handled by people who understand your strategy and are aligned to our
partnership
After Sales Support

Dedicated Customer Service and Help Desk support

Dedicated 1-800 number and e-mail for our partner banks
10
Product Training
BWB: Full suite of world class treasury management solutions


BMO offers the full suite of treasury management services to our Correspondent Bank partners
There are no restrictions on what Canadian services we can offer
Receivables Solutions:
Lockbox
Incoming Wire Payments
12
Standard Product Suite

Account (CAD & USD)

Check writing capabilities
Information Solutions:

Online Banking for Business Platform

White Label Capabilities

File Connectivity

MT940/BAI solutions
Payables Solutions:

Directcheque + Enhanced Positive Pay

Electronic Funds Transfer

Tax and Bill Payments
Receivables Solutions:

Wholesale Lockbox (WLBX)
Note: Although this is our standard offering, all
products and services are available to your clients
13
Other Product Offerings

FirstBank Automated Clearing Services (FACS)

Wire Payments

FirstBank Cash Concentrator Service (FCCS)

Credit Cards – Referral, not through the program
As our offering includes all products and services available our team is readily available to assist
with RFP’s that you may receive from your clients. We can offer assistance with responding to
questions or can also participate in calls with the prospective client as needed.
14
Current Accounts
Current Account Characteristics

Available on BMO’s International platform (CBDS Accounts) or Domestic platform (Mech
accounts)

Provides access to Canadian banking services

Both available in Canadian and US Dollars (domestic)

Credit and Terms and Conditions

On default, no overdraft limits will be made available on the checking accounts, i.e. operations take place on
a “pre-funded” basis

Accounts will be interest bearing, however interest paying arrangements should be typically offered to
customers on a defensive basis
16
Account Features
Feature
Credit Interest on balances
Explanation
BMO pays interest on demand deposit accounts. It
is up to you whether or not you want to promote
this feature.
Interest paid is a negotiated rate and is typically
only paid up to a certain level of balances.
Statements
Your customers will receive a detailed statement of
account activity from BMO through you
Will contain images (front and back of checks)
Delivery via MT940 or Paper
Statement Cut-Off times
Special cut-off times can only be for fixed dates
(e.g., 15th of the month, weekly -- Friday only).
17
Account Features
Feature
Explanation
Pre-dated, post-dated and stale checks
Pre-dated, post-dated and stale dated checks
typically go unnoticed (but if a customer identifies
a check, they have recourse. That is, they can
return a check up to the date indicated on the
check.
Insurance on deposit balances
This feature is offered by the Canadian Deposit
Insurance Corporation (CDIC) and the cost is not
passed on to the customer. Further details are
available on the CDIC website at www.cdic.ca
18
Block Account Agreements
Similarities:



Standard Agreements will be discussed and agreed upon by BMO and yourselves
Changes to the standard forms are not allowed
Blocked Account Agreement between all respective parties is duly executed
Agreements With Trigger
Agreements Without Trigger

Lender retains complete authority and control over
the operation of the Blocked Account

Borrower is not allowed to debit account

End of Business day all balances will be transferred
to the Collection Account
19

Blocked Account operates within the normal parameters
established within the Agreement.

Borrower maintains authority on Blocked Account

Written notice in the form of Trigger Notice from Lender is supplied
to Bank of Montreal

Upon receipt of Trigger Notice, Bank of Montreal will require up to
two (2) business days – as per Section 4. of Blocked Account
Agreement- to implement the necessary changes required by the
Trigger Notice. Accordingly Bank of Montreal will act upon the
received notice and instruct their processing center to block all
debit transactions relating to the Blocked account

Processing center will block all debit transactions and allow credit
transactions to the Blocked Account

Bank of Montreal will transfer account balance to Collection
Account.

Client waives all authority to Debit Blocked Account

Borrower loses authority on the operational management of the
Blocked Account and Lender acquires operational authority and
control
Concentrator Deposit
Receivables Services
(CDRS)
Concentrator Deposit Receivable Services (CDRS):
Features

Deposits to the account available through SWIFT MT 940 statements or via the Client Direct
Access (CDA) site

Information can flow from field locations through the use of 16 character alpha-numeric customer
ID and 35 character alpha-numeric customer description field.

Specialized deposit forms (CR 72) allow for the deposit at any BMO branch location in Canada
21
Concentrator Deposit Receivable Services (CDRS):
Benefits
Improved cash flow

Provide immediate access to funds

Enable businesses to minimize excess balances and streamline reconciliation
Detailed, online information reporting

Provides transaction details online via CDA

Allow businesses to monitor each of their outlet’s daily deposits
Increased security and control

Allow businesses to monitor each of their outlet’s deposit activity
22
FirstBank® Cash
Concentrator Services
(FCCS)
FCCS: Features

Daily reports identify the office making the deposit, division number, branch transit numbers,
value date, amounts deposited and a message field

Data File available in both 80 and 1464 bit files

Reports are available via our Online Banking for Business platform or through hard copy with at
the branch of account

Information can flow from field locations through the use of 25 character alpha-numeric message
field

A special concentrator number is assigned for making deposits and generating reports
24
FCCS: Benefits
Improved cash flow

Provide immediate access to funds

Enable businesses to minimize excess balances and streamline reconciliation
Detailed, online information reporting

Provide real-time transaction details online via our Online Banking for Business platform

Allow businesses to monitor each of their outlet’s daily deposits
Increased security and control

Allow customers to monitor each outlet’s deposit activity

Prevent outlets from having access to sensitive account information
25
FCCS: Complimentary Service

Drawcheque Service

A deposit management and transfer service

Canadian dollar deposits made at any Canadian FI can be transferred to the customers BMO
consolidation account and receive same day value

Can be used as a complimentary service to FCCS or as a payment collection service

Online

IVR
26
Online Banking for Business
Online Banking for Business: Product 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

A modular platform: your customers can choose the
services they need today and add modules as their
business needs change
OLBB supports full single sign on and private label functionality enhancing the end client experience
28
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 the 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
29
Online Banking for Business: Features
STANDARD MODULES
OPTIONAL MODULES

Image Search

Electronic fund transfers (EFT)

Customer Self Administration

File Transfer Facility (FTF)

DirectCheque Inquiries & Stop Payments

Wholesale Lockbox

Lockbox Imaging

Tax and Bill Payments

Wire Payments
30
Electronic Funds Transfer
(EFT/ACH)
EFT – Product Overview

EFT is an electronic funds transfer service that provides our customers the ability to electronically
process transactions in CAD or USD through any Canadian financial institution.

EFT is of benefit to any customers that need to be able to process debit or credit transactions
electronically for collections or disbursements could be interested in EFT. The higher the
transaction volume your customer has, the more cost effective EFT’s are (versus issuing checks).
It is for customers who need to:
 Pay employees
 Pay suppliers, utilities, etc.
 Receive payments from customers via pre-authorized debits (PAD)
 Improve security by eliminating lost, stolen and forged checks
 Eliminate reliance on the postal system
 Eliminate embarrassing late payments and associated charges
32
EFT: Features

Payment Files
– Customer Released
– Fixed Frequency

File creation and transmission
Option 1
Option 2
File Creation
Payment files – customer
release or fixed frequency
Accounting Software package
File Transmission
Online Banking for Business –
EFT module
Online Banking for Business – File
Transfer Facility (FTF) module or GXS
Post Delivery
Functions
Online Banking for Business – EFT module
Reporting
Online Banking for Business – File Transfer Facility (FTF) module
33
EFT: Features

Post delivery functions
–
Corrections
–
Resubmissions
–
Recall
–
Verify
–
Tracing
–
File Status
34
EFT: Features
Feature
Explanation
Remittance Information
EFT is regulated by CPA (Canadian Payments Association) and supports corporate to
corporate, corporate to consumer and consumer to corporate type payments.
However EFT does not support remittance data.
Remittance Information
EFT is regulated by CPA (Canadian Payments Association) and supports corporate to
corporate, corporate to consumer and consumer to corporate type payments.
However EFT does not support remittance data.
Settlement
CPA Standards establishes the lead time to post funds based on serviceability codes.
97% of banks are code 1 which means the funds are available to the customer the
next business day.
Settlement
CPA Standards establishes the lead time to post funds based on serviceability codes.
97% of banks are code 1 which means the funds are available to the customer the
next business day.
35
EFT: Benefits

Reduced Costs

Enhanced Customer/Vendor Relations

Improved Cash Management

Reduced risk of check fraud
36
Wholesale
Lockbox (WLBX)
Wholesale Lockbox (WLBX)

BMO has a Wholesale Lockbox solution with national coverage. We have processing centres
located in Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver

Enables businesses to receive mail payments at strategically located post office boxes for sameday processing and deposit into their BMO Bank of Montreal account

Wholesale Lockbox is one of the most efficient ways to collect, process and consolidate paperbased deposits into a single account

Cash flow and cash application process enhanced by increasing the speed of the collection of
receivables and the flow of information

Primary targets are larger Commercial and Corporate customers, although smaller companies
also find value in the Wholesale Lockbox service

Any customer with the following needs could be interested in Wholesale Lockbox:

They receive low-volume, high-dollar paper payments from customers

They wish to maximize cash flow and funds availability, and improve the speed with which
information is received
38
Wholesale Lockbox (WLBX)

Wholesale Lockbox allows customer’s customers to mail invoice payments directly to a
strategically located lockbox. The lockboxes are cleared daily and credits are made to the
customer’s account

Wholesale Lockbox typically handles a low transaction volume, with a relatively high dollar
value per transaction

They are usually business-to-business payments and the paper invoices processed could
vary in size and format

Wholesale Lockbox is an extremely manual process, that results in a lot of keystrokes
39
Wholesale Lockbox - Features

The deposit advice package (may include original invoice, check copies, envelopes, and
detail deposit listing) is mailed directly to the customer's office

A duplicate deposit advice can be dispatched to an alternative customer addresses

A copy of each check deposited can be provided with the deposit advice and a second
copy can be included with the duplicate advice

Specialized sorts and match and staple combinations of the invoice, check images and
envelopes can be provided

Imaging available through Online Banking for Business or via CD-ROM and bulk file
image delivery

Notification and payment details can be provided via fax report or data transmission. Data
entry of invoice information and capture of check MICR line is available. Standard
reporting time is at end of day (16:00 ET)

Lockboxes are offered in Canadian or USD currency

Lockboxes offer a post date feature up to 365 days
40
Wholesale Lockbox: Features
Feature
Explanation
Lockbox Processing Times
Wholesale lockbox provides a standard 4 p.m. ET cutoff. customers are charged extra for earlier cut-off
times given the need to prioritize their work over
others. No charge for later cut-off times.
Bulk Imaging Solutions
We offer a bulk image delivery solution for wholesale
lockbox (checks, invoices, envelopes, etc)
Deposit of lockbox proceeds to account
Canadian wholesale lockbox service has one deposit
per day (8 p.m. ET) for current day ledger credit.
Deposits are made via an EFT file.
41
Wholesale Lockbox - Imaging

WLBX Imaging via Online Banking for Business allows your customers to access images and
view lockbox documents including all correspondence (envelopes, invoices, etc.)

Web
 Search and view lockbox documents
- End-of-day
- Intraday
- Specified date
 View Lockbox deposit activity report
 Up to 90 day history

CD-ROM

Lockbox images available via CD-ROM and can be provided daily, weekly, monthly after 48
hours of the end of processing

CDs are encrypted to provide enhanced security

Lockbox document images from all lockboxes can be consolidated into one CD or a separate
CD can be created for each lockbox

Software used for CD-ROM viewing is loaded onto each and every CD and is automatically
launched from the disk when loaded into the CD-ROM drive

Alternatively we are able to deliver lockbox images via bulk file image delivery
42
DirectCheque (DCH)
DirectCheque - Product Overview

DirectCheque is a low cost, fully automated check processing and reconciliation service designed
for high volume check issuers

DirectCheque provides consistent, readily accessible disbursement information, including a
computer-generated printout of cancelled checks coinciding with a statement cycle

The service lowers check processing costs, while providing automatic tracing and the flexibility to
quickly issue stop payments

This account reconcilement product is ideal for any small, mid-market, commercial and corporate
businesses that issue a considerable volume of checks.

Any customer with the following needs could be interested in DirectCheque (DCH):
 Customers who are looking for an economical and flexible check processing and reconciliation
solution
 Customers who require processing and reporting of paid checks based on their preferred
accounting or statement cycle
 Customers who wish to manage check fraud risk
 Customers who issue a significant volume of checks (i.e., a minimum 500 checks per account,
per reconciliation)
 Customers who want to save time, money or resources internally reconciling checks cashed
with check issued
44
DirectCheque - Basics
Pseudo Accounts
A unique number assigned to a DirectCheque customer. Pseudo accounts cannot be accessed
through Online Banking for Business for account information and transfers.
Posting Accounts
A BMO internal suspense account used for posting and balancing.
Funding Accounts
Account is owned by the customer and is used to fund the check cleared the previous day. A zero
balancing transaction is automatically established between the posting account and funding
account as required
45
DirectCheque - Basics

A unique branch number is
encoded on the checks.

Funded through the
customer’s account

Electronic Reports are
available.

Online check status inquiry
and stop payment
placement/removal is
available via Online
Banking for Business.

Check images for
DirectCheque accounts are
available online (Online
Banking for Business), CDROMs, DVD-ROMs and
Bulk File Image Delivery.
46
DirectCheque - Benefits and Features
Benefits

Reduced Costs

Increased Control

Faster, More Reliable Data Exchange

Fraud Risk Reduction with Check Validation service which can include option of payee name verification.
Features

Two basic reconciliation plans

Return of paid checks

Bypass branch processing

Daily status of stop payments

Optional critical value report

Online check status inquiry

Check Validation service with the option of payee name verification
47
DirectCheque - Reconciliation Plans

DirectCheque (DCH) is specifically designed for high volume check issuers.

Two basic reconciliation plans are available:

Partial Reconciliation - Paid check list
– A hard copy reconciliation report is provided. The report lists paid checks in serial number
order, showing serial number, dollar amount and paid date. Paid checks are sorted and
returned to the customer in convenient storage boxes.

Full Reconciliation
– Includes the features of the plan listed above

The customer supplies BMO with check issue data via electronic transmission for MICR Positive
Pay or Payee name verification. customer to send honour/dishonour instructions to Symcor prior
to 2:00 pm Eastern Standard Time.

Options for Positive Pay:

Match to Issue MICR

Payee Name Verification

Critical Value
48
DirectCheque - Reconciliation Plans
Account Plan
Sort
Returned
Account
Reconciliation Report
Paid check
Data
Plan 1



Paper
Plan 2



FTF






Plan 5
Plan 2 & 5
Positive Pay
Match to Issue
FTF
49
Print-out of all
issued and paid
checks
Customer supplied
check issue
information
Hard copy
FTF
Hard copy
FTF
DirectCheque - Issue Files - Plan 2 & 5

Check issue file must be concurrent with each physical issuance. Issue files can be sent with
one or many items contained in the file.

Issue files can be submitted to BMO via the following transmission methods
 File Transfer Facility: a web enabled file transfer method. Each user with SEND file
capability requires a secure ID device
 GXS

Issue files can be received anytime prior to 11:00 p.m. for same day processing.

Issue file specifications are included in the DirectCheque Manual

Issue Files must be successfully tested prior to production

Issue file confirmation is available; indicates file has been successfully received by BMO

All pay-no-pay decisions need to be received by BMO no later then 2:00p.m EST.
50
DirectCheque - Issue Files - Plan 2 & 5 cont’d
*Best Practice Tips*

Changes to the issue file or file creation method should always be tested; this can be
coordinated by contacting the Customer Service or Implementation Teams

Issue files should be sent early in the day to ensure ample time is available to address any
production support requirements

More than one user should be assigned with the capability to SEND files to BMO to
accommodate for vacations/absences
51
DirectCheque - Output Reports
CRP 92003-13
Daily Paid Reject Report
CRP 92005-32
Recap of Posted Items
CRP 92005-35
Diagnostic Summary Report
15021
Balance Sheet
Pay No Issue Report – Available for MICR Positive
PNI Report
Pay customers only
CVT Report
Critical Value Transaction Report
52
DirectCheque - Imaging Solutions

Available through Online Banking for Business, CR-ROM, DVD-ROM or via Bulk File Image
Delivery

Your customers can search, view, download and print images of their processed checks any time
of the day. Search criteria includes:

Transit/Account Number (mandatory)

Process date range (mandatory)

Check serial number (optional)

Check dollar amount (optional)

Item Sequence Number (optional)

Images can be retrieved in batches for convenience

Images are available the day after they are processed

The online image retention extends back 100 calendar days

Images are presented in JPEG file format
53
DirectCheque: Features
Feature
Explanation
Positive Pay Decisioning Timeline
The decision deadline is 2pm EST, regardless of customer location.
Imaging Solutions
Customers are able to access images archives via Online Banking for
Business up to 100 days history.
Image Archives
Bank of Montreal has a 7 year internal archive. Should an image past 100
calendar days be required this can be obtained by contacting the Client
Service Team.
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Tax and Bill Payments
Tax and Bill Payments: Product Overview

The Tax and Bill Payments module enables your client to pay and file Federal and Provincial
business taxes as well as utility and other corporate bills over the Internet

Any Online Banking for Business user can be enrolled in the Tax and Bill Payments module

In order to submit a payment, the Online Banking for Business user specifies the recipient, the
amount, and the date on which a payment is to be made

The payment information is forwarded to any internal approvers that have been set up, and the
amount will automatically be debited from the payment account once the payment is fully
approved.
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Tax and Bill Payment: Features

Allows customers to arrange payment of their taxes and bill payments online when it’s convenient
for them, 24 hours a day, 7 days a week

Control their cash flow by future-dating their payments up to one year in advance in most cases
and help prevent late payment charges

Tailor payment approvals by specifying:
 The number of approvals required to approve a payment
 User and company transaction limits

Once a payment is approved, the payment is considered complete and will be released on the
value date specified by the user who initiated the payment

Allows customers to minimize paperwork by filing and paying electronically; saving them time and
money

Simplifies their record keeping with confirmation numbers for each payment that appears on their
statement, making reconciliation quick and easy

There is a one-time self-registration for the service, with no enrolment costs
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File Connectivity
Connecting to the Bank – High Speed Connectivity

BMO launched new high speed connectivity options to exchange files with our customer. 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
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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)
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GXS vs. FTF
Features
High Speed Internet
Access
Server to Server
Transmission
FTF via Online
Banking for
Business
GXS
Available
Available
Not Available
Available
Scripted Automated File
Exchange
Not Available
Available
Encryption
Available
Available
128 Bit Encryption
No - Manual Operator
required to process
files
128 Bit to VPN IPsec
Encryption
Yes – Encrypted,
Automated, and can be
Scripted
Not designed to
transfer large files
Able
Technology Support /
Maintenance
Supported and
updated
Supported and updated
Image Transfer (Future)
Not Available
Available
Security
Compliance Component
e.g. SOX
Ability to Transfer Large
Files
(Over 10 Mega Bytes)
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Thank you!
For more information on how this program can benefit you and your customers
please contact us anytime
Marcia Cowan – Sales Manager
Sarah Cairns - Program Manager
Global Treasury Management
Global Treasury Management
BMO Capital Markets
BMO Capital Markets
T. 416-867-2796
T. 416-643-4342
Marcia.Cowan@bmo.com
Sarah.Cairns@bmo.com
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Appendices
Canadian vs. U.S. Banking Systems
Banking in Canada
Banking in the U.S.

Consolidated - 6 major financial institutions

Fragmented – thousands of financial institutions

Cross-country branch network

No interstate banking

Post-dated checks allowed

No post-dating of checks

Same-day value for checks

Processing float

Single mail delivery per day

Multiple mail deliveries per day

Pre-dating of clearing transactions

Controlled disbursement accounts

Credit interest

Sweep accounts

Service charges

Earnings credit

EFT (CPA 005)

ACH

EDI

EDI

Decreasing check volumes

Check volumes decreasing since 2004

Consumer debit transactions exceed credit card transactions

Check preferred consumer payment method

Consumer PAD accepted and utilized extensively

Coupon model

Wires – large value payments

Wires – common payment method

Check Images cannot be used to make deposits

Remote Image Capture Common
Our unique North American footprint helps you bridge the gap
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Check Fraud

Twenty-five percent (25%) of all fraud committed in Canada is check-related (CBA)

Major types of check fraud:
 Forged checks: one of the most common types of check fraud; forged drawer or endorsement
 Altered checks: original check (date, amount and/or payee) is changed without knowledge or consent of issuer
 Counterfeit checks: reproduction of an original, legitimate check
Altered date
Altered
amount
Altered payee
Forged drawer
Understanding check fraud techniques
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CPA Rules Regarding Check Fraud
Reason
Time Frame to Return Via Clearing
Altered item:
Original check (amount, payee, and/or date) has been
changed without the knowledge or consent of the
issuer
90 days
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
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E-Payments as a Target for Fraud
Transmission
Initiation / Approval
Processing
Payment file/account
Identity/passwords
information
Bank systems/services/payment
compromised at
compromised
information compromised
initiation/approval points
during transmission
during processing
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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
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
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
Safe and Secure E-Commerce
Initiation/Approval
Processing
Transmission
What BMO does for you:
 Strong encryption

Digital certificates
Automatic log out after 10 minutes

of inactivity
Complex security architecture

Latest security patches

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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
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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
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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.
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