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Getting The Job Done For Our Clients

Banking Services – Treasury Management

GFOA Conference

October 6, 2011

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Talking Points

Assessing your Transactional Environment

Treasury Management Products/Services

Fraud Protection

Creating Efficiencies

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Assessing Your Transactional Environment

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5 Major Areas of Concern

1.Receivables

2.Payables

3.Timeliness of Information

4.Reconciliation

5.Fraud

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Receivables Fact Finding

Key Questions to Consider What process do you use to collect funds or receipts? What is the average amount? How many checks do you receive on a monthly basis? How often do you go to the bank? How do you update your receivables? What does it cost you to process your collections? What challenges are you experiencing with your collections process? What are the current options to submit payments? Describe the payments you typically receive (check, ACH, etc.)? If you could, what would you change or improve about your collections

process? Do you hold onto check deposits? Do you photocopy your checks before making deposits? How often do you need coin? How do you manage the delivery of cash to the bank? Have you experienced any internal or external fraud relating to your cash

processing?

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Payables Fact Finding

Key Questions to Consider How many checks do you currently write per month? What challenges are you experiencing with your disbursements? What process and controls do you use to make disbursements? What is the average payment amount? How much time are you spending dealing with reconciling your accounts? Does your company have any “Green” initiatives? If applicable, have you experienced fraud in relation to the way you process

your check or ACH payments? How do you determine your daily cash position? How long does it take? What challenges are you experiencing with funding your daily disbursements? What systems have you used in the past to monitor checks clearing or checks

being returned on your accounts? What process do you use to make international disbursements? What’s the

associated cost?

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Information Reporting Fact Finding

Key Questions to Consider

How have you monitored account balances and activity in the past?

How do you get the information when you need to know your exact cash position?

How do you prefer to receive the information about your accounts?

What challenges are you encountering with your day-to-day bank accounts?

Have you experienced any internal or external fraud due to online banking access, or not enough account information?

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Treasury Management Solutions

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Automated Clearing House (ACH) Services – expedite collection of receivables by originating direct electronic debit and credit transactions through a secure national network.

Remote Deposit – Client scans checks and securely transmits the check images to Capital One Bank right from their place of business – as late as 9:00 pm ET for same day credit.

Vault Services – provide a secure, consistent method to pool cash from multiple collection points to a Capital One Bank vault, or from the bank to a business location.

Lockbox – accelerates the collection of remittance payments by sending them to a unique post office box managed by Capital One Bank.

SafeBank – allows clients to insert currency deposits into a Loomis-supported “smart” safe/bill counter – with same-day credit.

Merchant Services – through our extensive partnership with Govolution we can offer a customer portal for customers to log directly into an extension of our clients website for billing detail and payment options – in addition to the point of service merchant terminals.

Remote Payment Service – automates electronic payments made through consumer banking portals with a replacement to the check into an electronic ACH transaction that settles within 1-2 business days as oppose to the 5-7 business days for traditional check processing.

Cash Concentration - Consolidate funds from multiple bank accounts held at financial institutions across the country into one, central Capital One Bank deposit account. Gain more control over cash flows and processes with automated funds transfer solutions. Maximize the use of idle balances and use extra cash to invest or pay down loans.

Receivables Solutions

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Commercial Card – simplifies procurement, expense and fleet management.

ACH – enables the origination of electronic payments, such as Direct Deposit, Vendor Payments and Online Tax Payments through a secure national network.

Wire Transfer – initiate online via Treasury Optimizer, funds can be sent in US dollars or in one of 28 foreign currencies.

Controlled Disbursement – provides early check and ACH clearing totals; funds are automatically transferred from the designated funding account to the Controlled Disbursement account to fund all checks cleared for the day.

Positive Pay – helps protect against potential check fraud by matching check issue information against checks presented for payment.

Account Reconciliation – provides a reconciliation of checks paid to checks issued to determine outstanding checks.

Payables Solutions

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Fraud Protection

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ACH Online Check Disbursement Wires

With fraud continuing to rise in the financial industry, most banks are implementing a new policy to minimize client & Bank’s fraud risks

• Required to implement Dual Control on ACH Transaction

OR

• Sign Waiver form

• Required to enroll in Positive Pay Service

OR

• Sign Indemnification form

• Required to implement Dual Control on Wire transactions

OR

• Sign Waiver form to protect Bank against Fraud

Note: Strategy was presented through TM-IDM on May 19th and was approved by Sr. Leaders from Ops, IT and TM

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Check fraud continues to grow annually

• $10 B + in annual losses as a result of check fraud

Added protection to your checking account through the comparison of each presented check to the bank against your electronic check issued file

Bank will notify you of any mismatched items on a daily basis

• We ask that a decision is made between the hours of 10:00 AM – 3:30 PM ET

• Items can be viewed online through Treasury Optimizer or automatically applied against your default decision (Pay/Return)

Positive Pay

Positive Pay Benefits

Reduction in exposure for check fraud

Added Control of being able to view rejected transactions presented against your account and having the ability to return or pay the items

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Positive Pay/Account Reconciliation Flow

ARP/Positive PayChecks Issued

FileChecks Paid

Checks Paid

PPAY EXCEPTIONS

Payment Decision

Default Decision Applied

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How to Manage Risk on the ACH side

Definition – theft via ACH

• 2 options – selective vs. block all

• Dollar Thresholds for select ACH debit filters

• Set- up a one-time authorization for trading partner payment

What is Electronic Debit Protection?

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Creating Efficiencies

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Process Efficiencies

Challenges Enhancement Benefit

Account Structure Treasury Key Improve reconciliation

Maximize use of available funds

Minimize research of deposits and return items

Cash/Check Collection Process Lockbox Centralize Collections

Increased Availability by 2 days

Reduction in potential check fraud

Automate cash application process and improve accuracy

Improve cash positioning with added benefit to invest excess cash.

Reduction in back office work

Access client information more readily from any area within the company

Cash/Check Collection Process ACH Automate and Control payment process – same day every month

Reduced opportunity of check fraud

Improve efficiency and accuracy of accounts receivables record keeping

Improve Return Item notification sooner and begin collection sooner

Improve cash forecasting by controlling timing of payments with known settlement date

Reduce expenses – ACH transactions reduce the costs associated with paper-based payments (i.e check storage, paper processing, bank clearing fees.)

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Process Efficiencies

Challenges Enhancement Benefit

Cash/Check Collection Process

Remote Deposit Service Increased availability

Increased fraud controls

Extended processing and depositing deadlines

Reduction in branch visits – make deposits at local office

Web processing shortens the reconciliation process and timeline

Enhanced reporting options – ability to export, print and save reports in multiple formats

Manual Reconciliation Process

BAI File Automate Reconciliation

BAI File Acceptance

Perform Daily vs. Weekly Reconciliation

Eliminate manual and paper intensive account reconciliation

Payables Commercial Card Streamline purchasing transactions – T&E, Supplies, Conferences, etc

Reducing paperwork, with potential to eliminate or reduce purchase orders, paper invoices, and checks

Strategic Sourcing: management reports to analyze category and merchant spend to negotiate vendor discounts and rebates

Data integration with accounting software

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Normal credit qualifications and other terms and conditions may apply. Ask us for details.

This document provides information about and access to financial services offered by the Capital One family of companies, including Capital One, N.A., Member FDIC. ©2010 Capital One. All rights reserved.