It's Alive – Bringing a
Payment Strategy to Life
Presentation for:
May 24, 2016
Adrienne D. Terpak, CTP
Corporate and Specialty Banking Segment Manager
Treasury Management Services
Agenda
 Strategic
Thinking
 Payment
Strategy
 Current environment
 Looking forward
 Change management
 Bring your strategy to life
 Measure success
 Payment
 Parting
Trends & Innovation
Thoughts
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Strategic Thinking
Where are
we?
How shall
we
measure
progress?
Where do
we want
to go?
Strategy
"Sound strategy
starts with having
the right goal."
― Michael Porter,
How
should
changes
be made?
What
changes
have to be
made?
University Professor,
Institute for Strategy &
Competitiveness,
Harvard Business
School
3
Payment Strategy
4
Where are we now?
Drivers for Change
The Status Quo has been challenged
Rapid innovation
New Players
Changing behaviors and expectations
Value creation
5
Where do we want to go?
Forming a Strategy
Payment Policy
Payment Strategy
Make Timely Payments
Electronify Payments
Minimize Costs
Migrate to STP
Basic Efficiency
Enhanced Efficiency
Contract Compliance
Technology / Integration
Reporting
Visibility / MIS
Mitigate Risk
Optimize Economic Value
6
What needs to change?
Payment Strategy Design
1. Roles and Responsibilities
• Available resources, job functions, segregation of duties, approvals
• Payment type, amount and purpose
2. Supplier Segmentation
• Type, frequency, dollar amounts, contractual terms, goals
• Help to determine the payment type and channel used
3. Payment Formats and their Utility
• Cash, check, ACH, wire, card
• Cost, technology, speed, convenience, security, reporting, preferences
4. Delivery Channel
• Manual vs. automated - in-person, phone, fax, online, file transfer
• Cost, technology, speed, convenience, security, reporting, preferences
5. Fraud Protection and Company Liability
• Segregation of duties, security, authentication, audits
• Bank solutions – Positive Pay, ACH Blocks/Filters
Source: AFP Payments Decision Guide to Creating a Payables Strategy, Part 1, 2013
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Roles & Responsibilities

Job Functions & Responsibilities
Procurement
– Functional areas
– Clearly defined titles and roles
– Initiation, Approval, Exceptions

Accounts
Payable
Accounts
Receivable
Payment Controls
Payments
– Segregation of Duties
– Approval Levels
– Vary by payment type / purpose?
Finance/
Accounting
Treasury
– Information Access
Source: AFP Payments Decision Guide to Creating a Payables Strategy, Part 1, 2013
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Supplier Segmentation
Supplier Type

Frequency

Spend

Supplier Contract
Supplier Type Matrix Example
Preferred
Strategic
Commodity
Competitive
Risk

– Price
– SLAs
– Payment Terms
– Payment Type

Experience / Relationship
Source: AFP Payments Decision Guide to Creating a Payables Strategy, Part 1, 2013
Value
9
Payment Formats & Their Utility
Amount
Remittances
Recon &
Posting
Risk
Speed
Assess buyer &
seller needs
Analyze payment
type trade-offs
Transparency
Timing
Finality
Convenience
Cost
Source: AFP Payments Decision Guide to Creating a Payables Strategy, Part 1, 2013
10
Delivery Channel

Channel Considerations
Channel - consumer v. business
Payment Direction
EXAMPLE:
Payment Initiation Channel Alignment
Infrastructure
Channel
Payment Types Supported
Cost to use
In-person
Cash, Check, Card, ACH
Convenience
Mail
Check, Card
Interfaces (v. Integration)
Online
ACH, Card, Wire
Mobile
Check, Card, ACH, Wire (ltd.)
Secure File Transfer
Check, ACH, Wire, Card
EDI
ACH, Wire, Card
Channel Security
Speed to make payment
Remittance Details
Trading Partner ability to
receive payment
Source: AFP Payments Decision Guide to Creating a Payables Strategy, Part 1, 2013
11
Fraud Protection & Company Liability

Fraud Prevention
Segregation of Duties
Dual Authorizations
Multi-factor Authentication
Documented Procedures
Formal Audits
Employee Checks
Separate or Standalone Computers
IT Security
Fraud Prevention Software/Solutions
Automation with Controls
Rules & Regs
Fed Regs
NACHA
UCC
Card Networks
OFAC
FDIC
FinCEN
SOX
Culture
Source: AFP Payments Decision Guide to Creating a Payables Strategy, Part 1, 2013
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How should changes be made?
Engagement
Good
• Top Down
• C-Level Direction
Better
• Bottom Up – Grass Roots
• WIIFM?
Best
• Engage and get buy-in at every
level!
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How do we bring it to life?
Managing the Change
Source: John Kotter's 8-step organizational change model
14
How do we measure success?
Best Practices / Considerations

Trends – Macro and Micro

Industry Standard Formats

Organizational Culture

Trading Partner Preferences

Goals (Interim / Long-Term) with Timeline

Communications / Awareness / Reporting

Administration & Oversight
KEEP THE PAYMENT STRATEGY ALIVE!
15
Payment Trends and
Innovation
16
CFOs Looking Ahead
17
Real-Time Payments
18
Innovation & Fintech
19
Innovation & Fintech
20
Parting Thoughts - Resources

Bankers

Peers

AFP

Fed, NACHA, etc.

Search Engines
– Studies
– Surveys
– White Papers
– Reports
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Parting Thoughts
“A good plan today is better than a perfect plan
tomorrow.”
George S. Patton
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Thank You
Questions?
ADRIENNE D. TERPAK, CTP
Corporate and Specialty Banking Segment Manager
Treasury Management Services
TD Bank, America's Most Convenient Bank
Phone: 551-777-0563
Email: Adrienne. [email protected]
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Appendix
Industry Resources
"2015 Payments Fraud and Control Survey Report." Association for Financial Professionals (AFP).
AFP, 19 May 2015. Web. <http://www.afponline.org/search.aspx?q=fraud+survey>.
"Executive Order 13636: Cybersecurity Framework." Cybersecurity Framework. The National Institute
of Standards and Technology, 12 Nov. 2013. Web. http://www.nist.gov/cyberframework.
"Innovation in Payments: The Future Is Fintech." BNY Mellon, 08 Oct. 2015. Web.
https://www.bnymellon.com/_global-assets/pdf/our-thinking/innovation-in-payments-the-future-isfintech.pdf.
"Payments Decisions Guide - Creating a Payables Strategy, Part 1." AFP Payments Guides.
Association for Financial Professionals, 2013. Web. http://www.afponline.org/PaymentsGuides.
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