Product Training BMO Capital Markets by alicejenny


									Banking Without Borders
       Product Training

          Last Revised: June 2012
   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

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

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

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

Value Proposition –
Differentiation Based on Relationship and Convenience

       For You – Deeper Relationships                          For Your Clients – Convenience

   More Capabilities: Protected and enhanced              Convenience: Maintain their banking
    relationships with your clients                         relationship with you – their trusted banker
                                                             Seamless access to robust Canadian cash
   More Resources: Minimal investment and effort
                                                               management and treasury solutions
   More Solutions: Provide leading edge cross-              Improved cash management
    border cash management and treasury solutions
    to your clients                                        Value: Reduced cost and complexity

   New sources of Revenue                                 Service: Reduced complexity associated with
                                                            other international banking relationships

Overview of Different Models

                                   Mutual Corporate Client (MCC)                                      Client Of Correspondent Banking (CCB)

                       Bank to bank agreement                                            Account are jointly owned/controlled by INSERT BANK NAME and
Account Structure
                       Client signs with BMO directly                                     your client

                       INSERT BANK NAME client signs the “Mutual Corporate               INSERT BANK NAME and your client both sign the “Agreement for
 Documentation          client (MCC) Authorization”                                        CCB Accounts”
    Forms              INSERT BANK NAME client signs the appropriate BMO                 INSERT BANK NAME to provide BMO with requisite account open
                        service agreement                                                  material

                       INSERT BANK NAME Bank completes the appropriate                   INSERT BANK NAME Bank completes the appropriate BMO
 Implementation         BMO Implementation forms gathering input from the client           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              INSERT BANK NAME clients always operate with credit support from
   Credit Risk                                                                             INSERT BANK NAME lines at BMO.
                        or via credit lines carved from the INSERT BANK NAME
                        credit lines at BMO                                               Prefunding is not supported

                       INSERT BANK NAME clients have access to real time
                        information online                                                INSERT BANK NAME has access to real time activity on their clients
   Information         Online Banking for Business is slated for a private label          on BMO’s Correspondent Banking portal CDA Web
    Reporting           and single sign on capability in upcoming releases                BMO can deliver MT940 or BAI file with previous day data to INSERT
                       BMO can deliver MT940 or BAI file with previous day data           BANK NAME
                        to INSERT BANK NAME

                    BMO supports several models within our Banking Without Borders program

Team Approach with Dedicated Resources

                                             Team Model: Manage our relationship and the success of your
           Relationship &                     program
            Management                       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
    Program              POD
   Management            Team

                                          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
 Program Manager: Sarah Cairns
                                                      Implementation: Khatra Haji, Frank Morelli
 Senior Product Manager: Jay Pickett
                                                      Documentation: Stephanie Chan

Program Support - Web Site

                                    Pitch Book Template
                                    White labelled marketing
                                    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

   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

After Sales Support
   Dedicated Customer Service and Help Desk support
   Dedicated 1-800 number and e-mail for our partner banks

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:

                                         Incoming Wire Payments

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

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.

Current Accounts
Current Account Characteristics

   Available on BMO’s International platform (CBDS Accounts) or Domestic platform (Mech

   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

Account Features

                    Feature                         Explanation

Credit Interest on balances    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).

 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

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

Block Account Agreements
   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 Without Trigger                                      Agreements With Trigger
                                                                   Blocked Account operates within the normal parameters
   Lender retains complete authority and control over              established within the Agreement.
    the operation of the Blocked Account
                                                                   Borrower maintains authority on Blocked Account
   Borrower is not allowed to debit account                       Written notice in the form of Trigger Notice from Lender is supplied
                                                                    to Bank of Montreal
   End of Business day all balances will be transferred
    to the Collection Account                                      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

                                                                   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

Concentrator Deposit
Receivables Services
Concentrator Deposit Receivable Services (CDRS):

   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

Concentrator Deposit Receivable Services (CDRS):

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

    FirstBank® Cash
Concentrator Services
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

   A special concentrator number is assigned for making deposits and generating reports

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

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

Online Banking for
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

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
   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
   Tailor services to match their specific needs
   Choose only the modules they need today and add modules as their business grows
   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: 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

Electronic Funds Transfer
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

EFT: Features

     Payment Files
        – Customer Released
        – Fixed Frequency

     File creation and transmission

                                       Option 1                              Option 2

     File Creation        Payment files – customer           Accounting Software package
                          release or fixed frequency
     File Transmission    Online Banking for Business –      Online Banking for Business – File
                          EFT module                         Transfer Facility (FTF) module or GXS
     Post Delivery        Online Banking for Business – EFT module
     Reporting            Online Banking for Business – File Transfer Facility (FTF) module

EFT: Features

   Post delivery functions
    –   Corrections
    –   Resubmissions
    –   Recall
    –   Verify
    –   Tracing
    –   File Status

 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.

EFT: Benefits

   Reduced Costs

   Enhanced Customer/Vendor Relations

   Improved Cash Management

   Reduced risk of check fraud

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 same-
    day processing and deposit into their BMO Bank of Montreal account

   Wholesale Lockbox is one of the most efficient ways to collect, process and consolidate paper-
    based 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

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

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

Wholesale Lockbox: Features

                Feature                                       Explanation

Lockbox Processing Times                 Wholesale lockbox provides a standard 4 p.m. ET cut-
                                         off. 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.

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

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
     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

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

DirectCheque - Basics

   A unique branch number is
    encoded on the checks.

   Funded through the
    customer’s account

   Electronic Reports are

   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), CD-
    ROMs, DVD-ROMs and
    Bulk File Image Delivery.

DirectCheque - Benefits and Features


   Reduced Costs

   Increased Control

   Faster, More Reliable Data Exchange

   Fraud Risk Reduction with Check Validation service which can include option of payee name verification.


   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

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

DirectCheque - Reconciliation Plans

                                                                          Print-out of all   Customer supplied
                                         Account            Paid check
 Account Plan     Sort   Returned                                        issued and paid        check issue
                                    Reconciliation Report      Data
                                                                              checks            information

    Plan 1                                                 Paper

    Plan 2                                                 FTF

    Plan 5
                                                                        Hard copy               FTF

   Plan 2 & 5
                                                                        Hard copy               FTF
  Positive Pay
 Match to Issue

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.

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

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

DirectCheque - Imaging Solutions

   Available through Online Banking for Business, CR-ROM, DVD-ROM or via Bulk File Image

   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

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.

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

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
   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

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


   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


                                 FTF via Online
                                  Banking for
          Features                 Business                     GXS
 High Speed Internet
 Access                      Available              Available
 Server to Server
 Transmission                Not Available          Available
 Scripted Automated File
 Exchange                    Not Available          Available
 Encryption                  Available              Available

                                                    128 Bit to VPN IPsec
 Security                    128 Bit Encryption     Encryption
                             No - Manual Operator   Yes – Encrypted,
 Compliance Component        required to process    Automated, and can be
 e.g. SOX                    files                  Scripted
 Ability to Transfer Large
 Files                       Not designed to
 (Over 10 Mega Bytes)        transfer large files   Able
 Technology Support /        Supported and
 Maintenance                 updated                Supported and updated
 Image Transfer (Future)     Not Available          Available

                                       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


    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

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 payee
                                                                                 Forged drawer

                                      Understanding check fraud techniques

CPA Rules Regarding Check Fraud

Reason                                                      Time Frame to Return Via Clearing
Altered item:

Original check (amount, payee, and/or date) has been        90 days
changed without the knowledge or consent of the
                                                            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          Next business day
check) has been forged
Forged endorsement:                                         Unlimited (CPA)

Signature/endorsement of payee has been forged              Bills of Exchange Act requires drawer to notify drawee
                                                            bank within 12 months

E-Payments as a Target for Fraud


             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

 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


                                                   3 Business days after the date the funds are to be
                                                    made available of the original transaction (e.g. late

                                                   *It should be noted that both recourses are contingent
                                                    on the funds being available to retrieve

Safe and Secure E-Commerce

    Initiation/Approval   Transmission                          Processing

                                         What BMO does for you:
                                          Strong encryption

                                            Digital certificates
                                            Automatic log out after 10 minutes
                                             of inactivity
                                            Complex security architecture
                                            Latest security patches

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


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


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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