Western States Users Group

1. Centrix Solutions Inc. www.centrixsolutions.com 402.488.3990 ACH Risk Management & Reg E ComplianceLet Centrix Simplify Western States Users Group Brad Johnson – Director of Business Development Email - bjohnson@centrixsolutions.com

2. Agenda • PRIZE DRAWING • Omaha Steaks Gift Certificate ($100) • ODFI - ACH risk management • RDFI • Check & ACH fraud detection • ACH reporting for corporate clients • Reg E Dispute Tracking • PRIZE DRAWING

3. Payments Fraud Protection & Risk Reporting Your Customers Originated ACH Payments Real-time File Monitoring Customer File Verification Submission Calendar / File Scheduling Data Validation Account White Lists CENTRIX Protecting the ODFI & Originators • Task: Insure Originated ACH Activity is Valid • Risks: • Financial loss • Customer relationships • Reputation • Compliance • Challenges: • Multiple delivery channels (on-line / FTP) • Procedures are outdated (lack of automation) • Lack of diligence for security by clients • Smart, Smart Bad Guys! • Solution: • Layers of technology • Automation

4. Payments Fraud Protection & Risk Reporting The Fed Incoming Payments ACH Positive Pay ACH Filter/Block Check / Payee / Teller Positive Pay EDI Translation Customer Returns Notification CENTRIX Protecting the RDFI & Clients • Task: Insure check & ACH activity is valid • Risks: • Customer retention & acquisition • Financial loss • Reputation • Challenges: • Customer apathy  “The bank will cover it” • Solution: • Technology • Automation

5. Payments Fraud Protection & Risk Reporting Your Customers Your Financial Institution The Fed Originated ACH Payments Incoming Payments Bank Reporting Bank Operations Real-time File Monitoring ACH Positive Pay Board Reporting Chargeback Processing ACH Filter/Block Customer File Verification Risk Assessment ACH Billing Check / Payee / Teller Positive Pay Returns Analysis NOC Processing Submission Calendar / File Scheduling EDI Translation Relationship Manager Reporting IAT / DNR Reports Data Validation Customer Returns Notification Reg E Dispute Tracking Exposure Reporting Account White Lists Payments Data Warehouse

6. ACH Risk ManagementLet Centrix Simplify Protecting the ODFI & Originators

7. Payments Fraud Protection & Risk Reporting Your Customers Originated ACH Payments Real-time File Monitoring Customer File Verification Submission Calendar / File Scheduling Data Validation Account White Lists Protecting the ODFI & Originators • Centrix Payments I.Q. System • Origination file validation • ACH Risk Reporting • Relationship Manager Dashboard • ACH Calendaring • Detect fraud • Enforce originator agreements • Originator activity reports • Risk Assessment reports • Exposure positions

8. Centrix PIQS Processing Flow Corporate Clients Validated Originated ACH Files Originated Files Received Passed to PIQS Workflow Incoming Fed File(s) VALIDATION RULES Warnings or Errors Payments Data Warehouse Statistical Metrics Exception Reporting Originator Reporting Alerts & Overrides Company or Business Unit Limits Is it Scheduled? SEC Codes White List

9. ACH File Validation Protecting the ODFI & Originators

10. Payments Fraud Protection & Risk Reporting Your Customers Originated ACH Payments Real-time File Monitoring Customer File Verification Submission Calendar / File Scheduling Data Validation Account White Lists • Centrix Payments I.Q. System • File Validation • Multi-day exposure monitoring • Temporal risk • White list (valid receivers) • ACH calendaring • SEC codes • Duplicate file check • File integrity checks • Auto balance control totals

11. ACH Risk Reporting Protecting the ODFI & Originators

12. ACH Risk Reporting • Reporting Considerations Relative to • OCC 2006-39 | FFIEC Guidance | NACHA Rules • Metrics and trend analysis on ACH volume, returns, operational losses and transaction types • Summary of return rates by originator • Unauthorized returns that exceed threshold  1% • Metrics and trend analysis by originator • Capital adequacy reporting

13. ACH Risk Reporting • REPORTING • DEMO

14. ACH Risk Reporting Daily Origination Activity Daily Inbound ACH Activity Payments Data Warehouse Sample Report (OCC | FFIEC) Originators who have an unauthorized return rate greater than X% (1%)

15. ACH Risk Reporting Sample Report (OCC | FFIEC)

16. ACH Risk Reporting Sample Report (OCC | FFIEC)

17. ACH Risk Reporting Sample Report (OCC | FFIEC)

18. ACH Risk Reporting Summarizing origination activity by customer (files/items/dollars)

19. ACH Risk Reporting • Risk Assessment Features • Coming Q3 2012 • Risk assessment worksheet… beyond ACH • ACH, Deposits, Loans, RDC, etc… • Auto calculate exposure limit adjustments • Approval workflow for risk limit adjustments • Relationship manager dashboard

20. Payments Fraud Protection & Risk Reporting The Fed Incoming Payments Check Positive Pay ACH Positive Pay Client ACH Reporting ACH Positive Pay ACH Filter/Block Exact/TMS Check / Payee / Teller Positive Pay EDI Translation by Centrix Solutions, Inc. Customer Returns Notification Protecting the RDFI & Clients 90+ Banks

21. Payments Fraud Protection & Risk Reporting The Fed Incoming Payments ACH Positive Pay ACH Filter/Block Check / Payee / Teller Positive Pay EDI Translation Customer Returns Notification • Centrix Exact/TMS™ • Check Positive Pay • Payee match • Teller positive pay • Internal exception scrub • On-line decisioning of exceptions • Single signon from cash management

22. Payments Fraud Protection & Risk Reporting The Fed Incoming Payments ACH Positive Pay ACH Filter/Block Check / Payee / Teller Positive Pay EDI Translation Customer Returns Notification • Centrix Exact/TMS™ • ACH Positive Pay • Pre-authorized originators (white list) • Valid SEC codes • Maximum amount • Filter/block rules (black list) • Originator • SEC Codes • Transaction type rules (DR/CR) • On-line decisioning of exceptions

23. Payments Fraud Protection & Risk Reporting The Fed Incoming Payments ACH Positive Pay ACH Filter/Block Check / Payee / Teller Positive Pay EDI Translation Customer Returns Notification • Centrix Exact/TMS™ • ACH Reporting for Clients • EDI / Returns / NOC • Auto delivery (web pickup) or automated email attachment

24. Reg E Dispute ManagementDebit Card | ACH | ATM Centrix Solutions Inc. www.centrixsolutions.com 402.488.3990 Eliminate Spreadsheets Automate the Back Office Simplify Compliance

25. How would you define your dispute management process? • …Clunky, you say? What would you like to do better? • Simplify, streamline, automate • Eliminate paper, file folders & spreadsheets • Incorporate an audit trail

26. Centrix Dispute Tracking • Browser user interface for CSR input • Select disputed transaction and reason (no manual entry) • Transaction and customer data feed from core • Integrated dispute form(s) • Back Office Review Queue • Produce form to submit to card processor or Visa/MC • Timeline Management • Track dispute timeline for each type of transaction • Debit card | ACH | ATM

27. Centrix Dispute Tracking • Auto post transactions • Provisional Credit | Charge Back | Charge off • Customer Letters • Contact notes (case management) • Full audit trail

28. Centrix Solutions Inc. www.centrixsolutions.com 402.488.3990 PRIZE DRAWING$100 Gift Certificate to Omaha Steaks

29. Centrix Solutions Inc. www.centrixsolutions.com 402.488.3990 ACH Risk Management & Reg E ComplianceLet Centrix Simplify Western States Users Group Brad Johnson – Director of Business Development Email - bjohnson@centrixsolutions.com