Focus on Regional Banking: Meeting the Connectivity Needs of Commercial Clients

1. Patricia Hines, CTP Director, Financial Services Industry Marketing, GXS Focus on Regional Banking: Meeting the Connectivity Needs of Increasingly Sophisticated Commercial Clients

3. September 5, 2013 | Slide 3 © 2013 GXS, Inc. Treasury & Cash Management Card Issuing & Merchant Services Trade & Commercial Finance • Integrated Payables • Consolidated Receivables • SWIFT Connectivity • Multi-Bank Payments • Merchant Enablement & File Integration • PCI Compliance • ERP Integration • Factoring • Supply Chain Finance • Inventory Finance • Dealer Floor Planning GXS in the Financial Services Sector Enabling Connectivity and STP Across Industry Segments Securities • Connectivity for Counterparties • Order to Settlement Lifecycle Management • Post-Trade Exceptions Group Benefits & Employer Services • Client Integration for Group Insurance • Payroll File Transmission • Claims Payment Remittances

5. September 5, 2013 | Slide 5 © 2013 GXS, Inc. • Maintaining Liquidity: Ensuring the company is able to meet current and future financial obligations • Optimizing Cash Resources: Minimizing non-earning cash balances while providing adequate liquidity, and maximizing use of excess cash balances • Maintaining Access to Financing: Establishing financing alternatives for working capital (short-term borrowing) and capital raising (medium to long term debit or equity) • Managing Controls and Risk: Monitoring and controlling exposure to interest rate, foreign exchange and other financial risks • Managing Bank Relationships: Selecting financial services providers, monitoring provider performance, managing day-to-day operations Treasury Managers Wear Lots of Hats

6. September 5, 2013 | Slide 6 © 2013 GXS, Inc. How do Corporates Connect to their Banks? ERP Systems – SAP, Oracle Treasury Management Work Stations (TWS/TMS) File Formats Multiple Banking Relationships Payments Leased Line Web Portal Internet FTP B2B Gateway Connectivity Options Corporate-to-Bank Connectivity (C2B) Cloud-Based ERP and Accounting Solutions Business Accounting Software

7. September 5, 2013 | Slide 7 © 2013 GXS, Inc. Corporate Treasury Technology Spectrum Implications for Corporate-to-Bank Integration Note: SaaS = software as a service, eBAM = electronic bank account management. Exhibit #: 66:07W-E1  Heavy use of specialized treasury technology and ERP solutions  Use of intraday bank feeds for cash position, liquidity management  Multibank payment initiation files and use of online for exceptions  Emerging need for frequent status updates  Increasing use of integration for trade finance activity Large Corporate  Use of statements/ online banking reports to reconcile with accounting system  Initiation of payments online or through service bureau  Heavy reliance on spreadsheets  Minimal use of bank data files to update accounting package Basic Cash Management Operations (SMEs)  Growing adoption of technology for cash management and forecasting (SaaS)  Use of daily bank feeds for reconciliation (online and/or B2Bank connectivity)  Initiate payments (online and/or B2Bank)  Reliance on lead bank for multibank reporting Middle-Market Treasury with Primarily Domestic Operations  Multibank integration  Many banking relationships across multiple regions  Focus on managing global liquidity positions  Demand for consistent use of global standards  Reliance on treasury system for controls, workflow, and “single source of truth”  Demand for eBAM  Integration for more complex services (e.g., trade confirmations) Complex Global Treasury Customers’ Increasing Sophistication and Needs Source: TowerGroup, B2Bank Integration: Ignore One-to-One Connectivity at Your Peril, Susan Feinberg, 01/31/11, Ref # V66:07W

8. September 5, 2013 | Slide 8 © 2013 GXS, Inc. 22,110 3,575 968 617 475 82 17 Number of US Firms (Thousands) Non-Employer Firms 0 to 4 5 to 9 10 to 19 20 to 99 100 to 499 500 or more (large businesses) 5,9266,359 8,288 18,554 15,869 54,997 Number of Employees Small Businesses Are More Plentiful, but Larger Businesses Dominate

9. September 5, 2013 | Slide 9 © 2013 GXS, Inc. Middle-Market and Small Business Clients Drive Revenue for Tier 2 Banks Large Corporate Middle Market Small Business Top 5 29% 27% 13% Next 15 26% 32% 18% Peers 2 & 3 13% 40% 35% 2011 Total 26% 30% 17% Share of fee-equivalent revenue by customer segment Source: Ernst & Young 29th Annual Cash Management Services Survey Source: GE Reports

10. September 5, 2013 | Slide 10 © 2013 GXS, Inc. Revenue from Electronic Products driving Cash Management Growth 11.0% -6.0% -3.0% -2.5% 0.5% -0.5% 0.5% 1.5% 3.5% 6.0% 11.0% -9.0% -6.0% -3.0% 0.0% 3.0% 6.0% 9.0% 12.0% Check CDA DDA RLBX C&C WLBX ARP Info Rpt ACH/EDI Wire P Card Source: Ernst & Young 29th Annual Cash Management Services Survey Revenue growth rates for cash management products

11. September 5, 2013 | Slide 11 © 2013 GXS, Inc. Payment Products Used in North America Corporates with less than $1B in revenue 6% 15% 16% 17% 18% 27% 30% 32% 32% 34% 43% 53% 58% 90% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Mobile payments SEPA direct debit Other local or niche products Bankers drafts Online payment services providers Bank checks Same day ACH Travel & entertainment cards Purchasing cards SEPA credit transfers ACH debits Checks ACH credits Bank wire transfers Source: gtnews 2013 Payments Survey

13. September 5, 2013 | Slide 13 © 2013 GXS, Inc. What are the Challenges? Backlog & Slow Client On-Boarding Multiple File Formats Complex Connectivity Aging In-House Technology New Product Development An external service provider can easily adapt to changing business conditions such as new clients, technologies, acquisitions, transaction types, etc. Data integration is challenging, complex and costly to implement and maintain. We shield this complexity and reduce overall costs, while improving business performance Clients with unique file formats, communications protocols, security needs and testing requirements require integration experts to handle complex onboarding. Managing clients across industry segments and geographies results in multiple file formats and transaction types with different business rules. Connecting and on-boarding new clients takes months, often resulting in backlogs. We can help to accelerate time-to-revenue.

14. September 5, 2013 | Slide 14 © 2013 GXS, Inc. Challenges with Bank Interfaces Treasury Organizations Want Real Time Information & Payment Execution Traditional Bank Interfaces Unique connection and file format for each banking relationships Connectivity, testing and certification required for each bank Leased Line Web Portal Internet FTP Fax Standards Complexity • Inflexible file format options and lack of ERP integration (SAP, Oracle) • Limited internet protocol support for AS2, MQ, HTTPS, SFTP • Rigid security policies (encryption, firewalls, audits) Operational Constraints • Performance and capacity constraints • Lengthy implementation times • Limited knowledge of corporate ERP • Varying capabilities and support processes across differing regions (Asia-Pacific, Latin America) Lack of Integrated Interfaces • Reconciliation challenges • Limited visibility to cash and payment status • Distinct interfaces per product line (Cash, FX, Trade Finance, Securities Services )

15. September 5, 2013 | Slide 15 © 2013 GXS, Inc. Multiple C2B Integration Options Direct Integration (DIY) Concentration Bank Integration SWIFT Integration Hybrid: SWIFT & Direct Integration SWIFT Service Bureau C2Bank Integration Service Higher TCO, multiple standards Constrained by bank’s capabilities SWIFT bank data through concentration bank Bank neutral, limit is bank SWIFT readiness May use SWIFT Service Bureau Lower TCO, global reach Bank neutral, maximum flexibility

16. September 5, 2013 | Slide 16 © 2013 GXS, Inc. SWIFT Corporate Access A Single Global Standard Post Web Portal Internet FTP Fax FX Confirmations Investment Trade Confirmations ACH Payments Wire Payments Prior / Current Day Statements Prior Day Balances Company Financial Systems Treasury A/P A/ROther Multiple Connections & Formats Bank Mandates Signature Cards FX Confirmations Investment Trade Confirmations Bank Mandates Signature Cards Company Financial Systems Treasury A/P A/ROther Standard Connections & Formats ACH Payments Wire Payments Prior / Current Day Statements Prior Day Balances

17. September 5, 2013 | Slide 17 © 2013 GXS, Inc. What is SWIFT? Society for Worldwide Interbank Financial Telecommunications • Consortium of member financial institutions • Started in 1973 to automate the telex • Premier financial messaging standards body • Powers real-time gross settlement systems globally called “market infrastructures” • >2.5B messages exchanged between 10,000+ financial institutions and corporates in over 210 countries – largest financial messaging network and community in the world • SWIFT develops and defines messaging and standards for the financial services industry Source: SWIFT Standards Overview Market Infrastructures • Central Banks • Settlement Systems Customer Solutions • TRCO • MA-CUG • SCORE SWIFTNet • 10,416 Correspondents • 213 Countries SWIFT Solutions • FileAct • Accord • Trade Services Utility • … and more Secure Financial Messaging Global Financial Standards “The global provider of secure financial messaging services”

20. September 5, 2013 | Slide 20 © 2013 GXS, Inc. • Corporate Drivers – Increased SWIFT marketing – Growing adoption among corporates – Single network to streamline messaging and formats – Centralizing treasury operations – New products: AllianceLite2, 3SKey, eBAM, SWIFTRef, Watch Analytics Interest in SWIFT

21. September 5, 2013 | Slide 21 © 2013 GXS, Inc. • Corporate Drivers – Better visibility and more efficient deployment of cash – More frequent reconciliation of balances – Grow balances through interest rate, currency hedging, derivatives, etc. management Improved Cash Management

22. September 5, 2013 | Slide 22 © 2013 GXS, Inc. • Corporate Drivers – FIN MT to MX message standard evolution – ISO 15002 to ISO 20022 for Corporate Actions – European Union’s migration to SEPA compliant payments Emerging ISO 20022 XML Standards

23. September 5, 2013 | Slide 23 © 2013 GXS, Inc. • Corporate Drivers – Simplifying, optimizing, and/or diversifying banking relationships – Being more nimble to make changes – Sensitivity due to Global Financial Crisis of 2008 Better Risk Management

24. September 5, 2013 | Slide 24 © 2013 GXS, Inc. • Corporate Drivers – Upgrading or consolidating treasury technology infrastructure – Replacing Treasury Management System – Marketing influences from SWIFT (Alliance Lite2) and other Service Bureaus Infrastructure Changes

25. September 5, 2013 | Slide 25 © 2013 GXS, Inc. 187 282 402 579 726 902 1,035 2006 2007 2008 2009 2010 2011 2012 Growth Driven by Corporate Adoption of SWIFT Number of Registered Corporate Entities on SWIFT Source: SWIFT

27. September 5, 2013 | Slide 27 © 2013 GXS, Inc. 4.0 4.4 4.6 5.0 2010 2011 2012 2013 Est SWIFTNet FIN Annual Traffic Millions of messages Growth in SWIFT Messaging Driving Adoption by Corporates of All Sizes + 3.6% + 9.9% SWIFTNet FileAct Traffic Average daily kilocharacters Source: SWIFT in Figures 3.9 5.0 6.9 7.7 2010 2011 2012 2013 est + 28.8% + 76.4% + 8.7% + 53.9%

28. September 5, 2013 | Slide 28 © 2013 GXS, Inc. SWIFT for Corporates – Beyond Payments Business area Description Details Messages Payments High-value & bulk payments Local formats and FIN MT formats FIN MT 101 FileAct for all formats Bank Account Reporting Intraday and end-of-day statements Account statements available in MT or ISO20022 format FIN MT 9xx File Act for all formats Bank Account Management Account-opening, account-closing and reporting Electronic management with ISO20022 FileAct and ISO 20022 Exceptions & Investigations Processing of investigations STP and efficient processes FileAct and ISO 20022 Trade Finance LCs, Guarantees One message for all needs FIN MT 798 and/or FileAct Foreign exchange deals Deal confirmations Optional matching FIN MT 3xx Securities Orders, corporate actions, etc. All processes covered with FIN messages FIN MT 5xx Source: SWIFT

30. September 5, 2013 | Slide 30 © 2013 GXS, Inc. Alliance Access Alliance Access SWIFT Alliance Solution SetInstitutionSize/MessageVolumes Automation, Integration, Customization Alliance Lite2 Alliance Gateway SWIFTNet Link HSMs Alliance Messaging Hub (AMH) Alliance Access Integration Platform Source: SWIFT

31. September 5, 2013 | Slide 31 © 2013 GXS, Inc. SWIFT Connectivity Options • Customer-Owned – Specific security requirements – Full control over IT environment including data storage – Supports high traffic volumes • Outsourced “Off-the-Shelf” – Clear ramp-up path – "Peace-of-mind" solution – Scalable to your needs • Outsourced Tailored – IT environment managed by third party – Using a shared infrastructure is not critical – Traffic requires medium to high volume infrastructure Source: SWIFT

34. September 5, 2013 | Slide 34 © 2013 GXS, Inc. Leased Line Alliance Web Platform SWIFT Interface VPN Box SAA ALLIANCE ACCESS SAG SWIFT ALLIANCE GATEWAY HSM Box SNL SWIFT Net Link Visibility & Message Management / Monitoring SWIFT Alliance Access Solution Components Client Systems Licensed from SWIFT • Primary Dual leg HA • DR Infrastructure • Both have 2 leased lines to SWIFTNet SOAP

35. September 5, 2013 | Slide 35 © 2013 GXS, Inc. Choosing a SWIFT Service Bureau • Can be daunting – almost 120 organizations worldwide have service bureau offerings • SWIFT recently rolled out a new Shared Infrastructure Programme (SIP), to certify service bureaus that offer third-party connectivity to the SWIFT network • A list of SWIFT Service Bureau meeting the various operational levels defined by SIP can be found using SWIFT’s Partner Locator

37. September 5, 2013 | Slide 37 © 2013 GXS, Inc. Single-Sign On / Multi-Factor Authentication Portlet Large Regional Bank Extending Capabilities to Small/Medium Enterprises Messaging Service DataPool (Unisys) CIPG (EG) Customer Communication Facility (CCF) Bank Online Banking for Business Portal Business Issue • The bank wanted to extend the ability to upload payment files and download information reporting files to small to medium enterprises (SMEs) • Legacy solution called File Transfer Facility (FTF) no longer supported by vendor • Need for low-cost Internet solution for small to medium business customers not able to exchange files using machine-to-machine solutions • Multi-factor authentication required to comply with FFIEC standards for online security • Requirement for single sign-on to FTF solution through bank’s online business banking portal Solution Deployed • Deployed Intelligent Web Forms (IWF) and Trading Grid for Excel (TG4E) in the bank’s messaging service to provide SME client access for file transfer • Implemented multi-factor authentication and single-sign to allow the bank’s clients to access the new file transfer client access tools through the bank’s online cash management portal Bank Clients

38. September 5, 2013 | Slide 38 © 2013 GXS, Inc. Top Tier Global Bank Overcoming Legacy System Limitations Business Challenge • This global bank’s core deposit system can only generate information reporting (current/ prior day) in BAI2 format. • Multi-national corporate clients require SWIFT formatted files for integration with their back- office financial systems GXS Solution • Translation from BAI2 to MT940 / MT942 • Delivery to clients via SWIFT Service Bureau using SWIFTNet File Act Business Benefits • Outsourcing corporate on-boarding = faster time to revenue • Translation into global formats improves ability to win multi-national corporate business • External SWIFT solution eliminates need for in- house hardware, software and technical staff Corporate Clients Managed Services SWIFT Service Bureau BAI2 MT940 MT942 SWIFTNet File Act

39. September 5, 2013 | Slide 39 © 2013 GXS, Inc. US Regional Bank Winning Large Corporate Clients Business Challenge • Meeting SWIFTNet delivery and SWIFT format requirements of multi-national corporate clients for wire payments and balance reporting • Bank applications unable to consume SWIFT formats • Imminent go-live deadline GXS Solution • File translation  MT101 – EDI 820  BAI2 – MT940 / MT942 • Connectivity via SWIFT Service Bureau • Corporate on-boarding • Enables additional large corporate business Corporate Clients SWIFT Service Bureau MT101 Managed Services MT940 MT942 820 BAI2

40. September 5, 2013 | Slide 40 © 2013 GXS, Inc. Take-Aways • Middle market commercial and small business banking clientele have more sophisticated bank connectivity requirements • To meet these requirements, regional banks must be well- versed in the complexity of corporate-to-bank connectivity • Ever-evolving financial messaging standards increase the complexity on an ongoing basis

41. September 5, 2013 | Slide 41 © 2013 GXS, Inc. To Learn More General Information: • Corporate-to-Bank Connectivity: http://www.corporatetobank.com • SWIFT for Corporates: http://www.swift.com/corporates • gtnews SWIFT Service Bureau Buyer’s Guide: http://www.afponline.org/pdf/2013_gtnews_SWIFT_Buyers_Guide.pdf Formats: • ISO 20022 for Dummies: http://www.iso20022.ch/iso_dummies.pdf • SEPA Overview: http://www.europeanpaymentscouncil.eu • SWIFT Common Global Implementation (CGI): http://www.swift.com/corporates/cgi/index • Balance and Transaction Reporting Standard (BTRS): https://www.x9.org/btrs