ABC Bank GCM Curriculum

GCM Product Course #1: abc-globalPASS

Aggregate Script for Stakeholder Review

Course Outline

1: Market Overview
2: The GCM Approach
3: Process Workflow
4: Product Features and Benefits
5: Technical Tour
6: Sales Overview
7: Implementation Overview
Conclusion

This course covers the following learning objectives:

1. Describe how the market shapes GCM’s abc-globalPASS product and how abc-globalPASS fits into
today’s market.
• Describe the market in which abc-globalPASS is being positioned, the service it provides and
into which GCM category it fits.
• Explain specific business expectations for abc-globalPASS in the industry and why
organizations need the service provided.
• Explain how abc-globalPASS addresses the key problems in the existing business process and
meets or exceeds expectations.
• Identify key regional differences, if applicable.
• Identify key competitors and their offerings.
• Describe the strengths and weaknesses of abc-globalPASS.

2. Explain how abc-globalPASS fits into GCM’s overall strategy.

• Describe how abc-globalPASS fits into the overall GCM strategy and the suite of GCM products,
as well as why it is important to GCM.

3. Describe the product process workflow with abc-globalPASS.

• Present how abc-globalPASS fits into the process workflow and how it maps to the client
environment.
• Identify key regional differences, if applicable.

4. Define the features and benefits of abc-globalPASS that customers value.

• Describe the features of abc-globalPASS and the benefits these features have for clients.
• Identify key regional differences, if applicable.

5. Explain the technical architecture of abc-globalPASS.

• Explain the high-level technical aspects of the product, including security and prerequisite
client systems.
• Provide a basic technical description or diagram of how abc-globalPASS works.
• Identify the various technology tools that support abc-globalPASS.
• Explain what technology is required by clients.
• Identify key regional differences, if applicable.

6. Describe how abc-globalPASS is sold to GCM customers.

Part A: Provide an overview of the sales process.
• Explain the revenue model and pricing components.
• Describe key sales points.

-1-
ABC Bank GCM Curriculum

• Answer the question: Why choose abc-globalPASS from ABC Bank?

Part B: Explain how to work with key decision-makers.

• Identify the key decision-makers that Sales Team members will encounter and the order in
which they will meet with them.
• For each key decision-maker:
 State their needs.
 Define how abc-globalPASS addresses their needs.
 List important questions to ask.

7. Explain how GCM implements abc-globalPASS with customers.

• List and define the steps involved in delivering and implementing abc-globalPASS, including
the estimated timeframes and the GCM services required.
• From both the clients’ and ABC Bank’s perspective, describe the various roles, responsibilities
and specific tasks required for implementing abc-globalPASS.

8. Describe where to find out more information about abc-globalPASS.

• Present future developments planned for abc-globalPASS.
• List from whom and where to get further information for abc-globalPASS, including Resources
and Job Tools within the GCM e-Learning System.

<Note: This document has not been copyedited. Copyediting will be done after the
content is finalized. >

-2-
ABC Bank GCM Curriculum

Lesson 1: Market Overview

<Start page text>

ABC Bank's abc-globalPASS service provides a cost-effective means of accessing local payment
systems around the world. Originally developed in the early 1990's, abc-globalPASS is now a market-
leading solution for processing global payments and collections.

Although the sequence represented in the graphic is recommended, you can choose to click any
hotspot.

<Screen 1:> Describe the market in which abc-globalPASS is being positioned, the service it provides
and into which GCM category it fits. <SME: In this screen we provide a broad overview of how abc-
globalPASS fits into the Payables and Receivables market that it belongs to. >
Advances in technology mean that it is possible to manage the treasury function of even the most
multinational companies from one location. In theory, a treasurer can receive data feeds providing
real-time information on all the company's worldwide cash flows. It is also technically possible for that
same treasurer to make and receive payments from bank accounts all around the world. This has led
many companies to review their payment and collection processes and pursue the benefits of
centralization in various forms. Treasurers of these companies are seeking a solution to achieve the
following objectives:
• Reduce costs and increase processing efficiency by centralizing transaction and reconciliation
activities into structures such as Shared Services Center (SSC), Treasury Center (TC)/Inhouse
Bank (IHB) and Payment Factory.
• Consolidate banking relationships to just one or two payment providers in each region.
• Increase straight-through processing (STP) rates by streamlining and automating the data
exchange process with trading partners, e.g. transaction initiation and reporting as well as
using industry standards for file format, communication and security.

In practice, managing cash from a centralized location remains a complicated process. Each country—
even in the Eurozone retains its own local payment systems. These systems all use different
messaging protocols and standards. So, if the gains of centralization are not to be offset by the
inefficiencies of the banking system, there needs to be an effective way of making payments
and collections. That is what abc-globalPASS does.

The target market for abc-globalPASS, part of GCM’s Payables and Receivables category, comprises
multinational Corporates that have installed an Enterprise Resource Planning (ERP) and/or a Treasury
Management System (TMS) – together called ETS – for their accounts payable and receivable and/or
treasury operations. These Corporates generate substantial amounts of payment and/or collection
activities, which require using multiple transaction types like ACH, Check or Money Transfer via
accounts in multiple countries.

<Screen 2: > Explain specific business expectations for abc-globalPASS in the industry and why
organizations need the service provided. <SME: This screen provides an overview of the
business/market expectations from abc-globalPASS. >
Multinational Corporates are challenged with managing cross-border payments and collections and
maximizing control over cash and working capital. Corporates require banking partners who can
reduce cross-border charges and expenses related to paper receipts and centralize cash management
activities via SSCs.

Because implementing ERP and TMS systems is so costly and lengthy, Corporates are looking for ways
to make most use of these systems by integrating them with banking partners for transaction
initiation and information reporting.

-3-
ABC Bank GCM Curriculum

<Screen 3: > Explain how abc-globalPASS addresses the key problems in the existing business
process and meets or exceeds expectations. <SME: This screen explains the how abc-globalPASS
addresses market expectations given in screen #2. >
abc-globalPASS addresses key problems in clients’ existing business processes as described earlier
with the following features:
• Single point of delivery in the Bank's EDI Centers in Eschborn near Frankfurt, Singapore and
New York.
• More than 35 countries covered worldwide.
• Multiple access channel options, ranging from host-to-host, db-bankline, db-direct 6.1, db-
directMC, db-direct internet, db-gateway, SWIFT and the Internet.
• Multiple file format options, including EDIFACT, IDOC, CSV, ANSI X.12 and some local formats.
• Multiple transaction type options such as Money Transfer, ACH, Check payments and country-
specific collection types, such as French LCR and Italian RIBA.
• Detailed return information that allows clients to automatically initiate subsequent action, e.g.,
a letter is generated to the debtor informing him of the returned direct debit as a result of
incorrect account number.

Solutions offered by abc-globalPASS address requirements where the Corporates leverage on familiar
ERP and TMS interfaces. Additionally, the solution supports an easy access to accounts in multiple
countries, and thus, access to inexpensive local, mass payment systems. ABC Bank is one of the few
global banks offering this sort of facility.

<Screen 4: > Identify the key competitors and their offerings.

The key competitors to abc-globalPASS are:
• ABN AMRO
• Bank of America
• Citibank
• HSBC
• JP Morgan Chase
• Wells Fargo

Click here to view the product offerings of each competitor.

<Screen 5: > Describe the strengths and challenges of abc-globalPASS.

Strengths
abc-globalPASS supports global integration of bulk payment and collection processes within the clients’
group of affiliated companies’ systems, processes and work flows. This integration reduces complexity
and allows for end-to-end secure transmission and increased STP. In addition, abc-globalPASS offers
local support through regional customer service teams. There is also regional support for system-to-
system integration—host-to-host (H2H) and server-to-server (S2S)

Challenges
Despite having a global presence, ABC Bank’s service still has regional differences. These may not
meet clients’ expectations for receiving consistent client references — especially the way information
is laid out in their electronic account statements. Our comprehensive remittance information is not
always carried through to the beneficiary, as the low-value national payment clearing systems for
each country are different. This restricts the details that can be processed with the payment resulting
in additional client reconciliation effort. ABC Bank recognizes these challenges and is taking concrete
steps to create a consistent processing service level across all regions.

-4-
ABC Bank GCM Curriculum

Quiz for Lesson 1.1

Question 1:
How does abc-globalPASS address its multinational clients’ business process expectations? Select ALL
that apply.
Answer A: Provides a single point of delivery in the Bank's EDI Centers. <<Correct>>
Answer B: Provides global service. <<Correct>>
Answer C: Provides access across multiple channels.
Answer D: Allows multiple file format options. <<Correct>>

Question 2:
Which of the following is true for abc-globalPASS? Select ALL that apply.
Answer A: Supports integrating bulk payment and collection processes. <<Correct>>
Answer B: Supports easy access to inexpensive and local mass-payment systems. <<Correct>>
Answer C: Provides regional support for system-to-system integration. <<Correct>>
Answer D: Allows comprehensive remittance information to be carried via low-value national payment
clearing systems.

-5-
ABC Bank GCM Curriculum

Lesson 2: The GCM Approach

<Screen 1: > abc-globalPASS

abc-globalPASS benefits the entire GCM product offering by adding value to all categories and
products as an umbrella service. Through abc-globalPASS, ABC Bank provides multinational
Corporates with a global network infrastructure that builds an efficient account structure, supporting
state-of-the-art cash management services for payments, collections and liquidity management.

Based on this account structure, multinational Corporates can submit all payments – domestic or
international – and collection instructions in the countries covered by abc-globalPASS. abc-globalPASS
clients are provided elevated conversion capabilities to file formats required by the B/E systems and
extensive validation of payment instructions to guarantee a high STP rate in B/E systems. This
provides interoperability and auto-reconciliation of large volumes of accounts payable and receivable
transactions in the Corporate’s business sector, such as insurers for premium collection, utilities for
accounts receivable, retail companies for supplier payments and e-marketplaces for transaction
payments and collections. In addition, other GCM products – such as Cash Pool Engine or db-eBills –
use the abc-globalPASS infrastructure when deploying their solutions.

<Screen 2: > Customer Access applications

Globally, db-direct internet uses abc-globalPASS’ current infrastructure and options for uploading files.
Also, ABC Bank’s Information Technology Infrastructure (ITI) has successfully combined a FTP drop-
box with abc-globalPASS’ product offering. These applications secure file and data exchange between
ABC Bank and its trading partners via a variety of industry standard communication and security
protocols.

As part of the global Accounts Payable/Accounts Receivable (AP/AR) Client Integration (CI) team
strategy, CI has created an ETS Integration Program to support and influence ABC Bank client system
vendors for end-to-end integration purposes. Key activities are centered on developing close and
strategic links between the major ETS vendors and ABC Bank’s global payment and collection products
— ACH, Check and Money Transfer — using existing and future Customer Access channels and file
formats. The strategic partnership includes not only format exchanges but also a business process
alignment that supports STP and system-to-system integration.

For example, by having these vendors integrate mutually agreed-upon cryptography – such as
authentication, encryption and digital signatures – and communication protocol requirements within
their applications, business processes are streamlined. This integration results in less risk from
reduced handling for ABC Bank and its clients. Additionally, tighter integration increases STP within a
complete end-to-end solution and provides quicker implementation timeframes.

<Screen 3: > Check Services

abc-globalPASS supports db-cheque/db-check and enables ABC Bank clients to consolidate their
worldwide check generation business through a single provider. abc-globalPASS provides a secure,
single point of access to the Bank’s leading Check Disbursement services.

<Screen 4: > Payables and Receivables

abc-globalPASS enables clients to issue payment and direct debit instructions in a single format,
including that of the clients’ ERP or TMS system. abc-globalPASS makes cross-border payment and
direct debiting activity as simple as dealing on a single-country basis. In turn, abc-globalPASS’
converter technology automatically directs these instructions through appropriate domestic clearing
systems and settlement cycles.

Clients receive structured reporting on the status of all transactions from a single source. For example,
clients might receive detailed electronic information of rejected direct debits. By offering a generic list
of reject reason codes, Corporates do not have to worry about a multitude of different country-specific
codes. This return information is as important to clients as the instructions themselves because it
provides the tools for auto-reconciliation.

-6-
ABC Bank GCM Curriculum

-7-
ABC Bank GCM Curriculum

<Screen 5: > Money Transfer/Clearing

abc-globalPASS provides a convenient way for clients to initiate multiple transactions with a single file
that contains information about a variety of payment instruments. Since payments in abc-globalPASS
are entered as local items, it turns out to be the least expensive clearing option for most clients.

<Screen 6: > Liquidity Management

The concept of moving liquidity from group entities that are in credit to those which are short of cash
is well established. Using a service like abc-globalPASS alongside these techniques allows a treasurer
to centralize cash and yet distribute payments and collections using cheaper local payment systems.

In addition, when coupled with Liquidity Management solutions, abc-globalPASS reduces float and idle
funds. Once transactions are settled in multiple accounts, the balances can be consolidated
automatically at the end of the day into a single location by using ABC Bank’s db-CashSweep. This
way, db-CashSweep helps Corporates to concentrate foreign exchange (FX) exposure at a central
point to minimize intracompany payments and FX activity.

Quiz for Lesson 2.1

Question 1:
Key activities include developing strategic links between ETS vendors and global payment and
collection products. With which GCM category is abc-globalPASS interacting? Select the correct
answer.

Answer A: Customer Access applications <<Correct>>

Answer B: Liquidity Management
Answer C: Payables and Receivables
Answer D: Check Services

Question 2:
Match how abc-globalPASS interacts with each product category: <Note: Although the terms below
are matched with the correct answers, both will be presented in random order within the actual
course. >
• Payables and Receivables: Enables clients to issue direct debit instructions in a single format.
• Liquidity Management: Consolidates balances of multiple accounts into a single location.
• Money Transfer/Clearing: Provides clients with a way to initiate a variety of payment
instruments with a single file.

• Check Services: Provides a secure, single point of access to paper-based payment services.

-8-
 ABC Bank GCM Curriculum

Lesson 3: Process Workflow

<Note: In this section, the learner clicks on each part of the diagram to learn more. Note that the
chart will be redesigned to match the look and feel of the course.>

Client SSC 2
Client Subsidiary
Client Subsidiary
Payments and Collections

Client Subsidiary ANSI X12 &

EDIFACT
IDOC

6
ABC Bank Entities 3
Asia America
Hong Kong US
Europe India
Austria Indonesia
Belgium Japan Partner Banks
Czech Republic Malaysia Australia
France Philippines Canada
Germany Singapore EDIFACT local EDIFACT local China
8
Hungary South Korea format via format SWIFT Denmark
Italy Sri Lanka internal Finland
Netherlands Taiwan network Greece
Poland Thailand Ireland
Portugal Luxemburg
Spain New Zealand
Switzerland 5 7 Norway
UK Pakistan
Sweden
Vietnam
4
ABC Bank

1. <Pop-up text when the learner clicks Client:>

Clients send bulk payment and collection instructions in their choice of file formats to ABC Bank. These
instructions are then converted, routed and processed via the designated local account(s) of the client
or its subsidiaries. The transactions are settled through the associated local clearing system(s), where
every payment becomes a domestic payment and cross-border payments are no longer needed. This
process centralizes initiating payments and collections, as well as prevents clients from facing the
obstacles of multiple file formats and electronic banking systems between different countries.

2. <Pop-up text when the learner clicks Client subsidiary:> Clients might have operations via its
subsidiaries in multiple global locations.

3. <Pop-up text when the learner clicks Payments and Collections ANSI, X12, EDIFACT:>
abc-globalPASS supports certain global file formats, such as EDIFACT, IDOC and CSV, as well as
certain local file formats, like ASC X12, NACHA, DTAUS and CFONB, as the inbound format into our
global conversion and routing platform.

Various Customer Access solutions can connect Corporate clients with ABC Bank:
• H2H connection: This is an option for EDIFACT-capable clients, where the ABC Bank
mainframe computer exchanges information directly with those of the client.

• db-direct internet: This electronic banking tool uses the external upload feature to securely
authorize and transmit payment instructions via the Internet to the EDI Centers. This interface
supports multiple global and local file formats.

• ETS Interface: The db-direct internet or a H2H connection provides a seamless

integration with clients’ ETS. This option no longer requires integrating different software
programs into db-direct internet and H2H solutions to convert the ETS proprietary file format
to one that ABC Bank could accept.

-9-
ABC Bank GCM Curriculum

• SWIFTNet FileAct: This is the latest SWIFT development that allows secure and reliable
file transfer. ABC Bank clients can now use SWIFTNet FileAct to transmit payment instructions
and retrieve balance and transaction information in batches of structured financial messages
or large reports.

4. <Pop-up text when the learner clicks ABC Bank:> abc-globalPASS allows clients to access accounts
in multiple countries. Clients are provided with a single entry point – one file format, one security
protocol, one interface and one counterpart – into ABC Bank to initiate their transactions. This
conversion and routing functionality is carried out in the EDI Centers in Eschborn, Singapore or New
York.

5. <Pop-up text when the learner clicks EDIFACT local format via internal network:>
All payment and collection instructions need to be converted to the file formats agreed to with the
back-end ABC Bank branches. Currently, the EDI Center in Eschborn converts 24 different inbound file
formats into 77 different outbound file formats. While urgent payments are often converted into
SWIFT MT101 messages, ACH-type payments are often converted to the country-specific file format
for ACH transactions.

6. <Pop-up text when the learner clicks ABC Bank Entities:> ABC Bank is currently connected to 25
ABC Bank operational offices worldwide.

7. <Pop-up text when the learner clicks EDIFACT local format SWIFT:>
SWIFT MT101 messages are often used as a general and relatively easy-to-implement solution for
communication with partner banks. Where ABC Bank has a closer relationship – for example, due to
substantial transaction volumes or because of the need for greater differentiation between various
transaction types – other file formats, such as EDIFACT, are chosen.

8. <Pop-up text when the learner clicks Partner Banks:> In 13 countries where ABC Bank has no
operational offices, we use services provided by partner banks. Partner banking is an arrangement
between two banks where one bank has clients who need services in the other bank's country. Partner
banks act as ABC Bank's correspondent by opening accounts and offering to ABC Bank clients local
cash management and payment services. Partner banks transmit electronic statements for the
accounts to ABC Bank and allow funds to be moved between customer accounts held at the two banks
on mutually advantageous terms.

Quiz for Lesson 3.1

Question 1:
Match each term with its function: <Note: Although the terms below are matched with the correct
answers, both will be presented in random order within the actual course. >

• H2H connection: Provides a Customer Access channel for EDIFACT capable clients.
• db-direct internet: Securely authorizes and transmits payment instructions over the Internet.
• ERP Interface: Integrates with ETS through db-direct internet or a H2H connection.
• EDI Center: Converts different inbound file formats to appropriate outbound file formats.

• Partner banks: Allow funds to be moved between customer accounts on mutually

advantageous terms.
• SWIFT MT101: Allows easy-to-implement solutions for communication with partner banks.

- 10 -
ABC Bank GCM Curriculum

Lesson 4: Product Features and Benefits

<Feature 1: > Full range of payment and collection services

abc-globalPASS enables clients to increase their processing efficiencies and reduce risks with access to
a complete suite of transaction types that include:
• Bulk payments and direct debits that are settled via local low-value clearing systems, such as
ACH.
• Urgent domestic payments settled locally via same-day clearing systems.
• Urgent international transfers settled via CHIPS, EBA or TARGET through correspondent banks
or ABC Bank’s own branches.
• Standard international payments in any currency settled through correspondent banks or the
Bank’s own branches.
• Collection items together with country-specific items, such as French LCR and Italian RIBA.
• Check payments, such as bank drafts and customer checks; note that slight differences in
regional services might occur because this service is not supported by all three EDI Centers.
• Electronic bills of exchange, if applicable.
• One file format for various transaction types.

<Feature 2: > Flexible end-to-end solution

abc-globalPASS provides clients with a convenient and cost-effective solution by handling their entire
transaction business based on state-of-the-art technology and related services, including:
• Global EDI technology.
• One access point.
• One transmission channel.
• One file format for any type of transaction; clients can choose from EDIFACT, ASC X12, SAP
IDOC, CSV or local formats. Note that slight differences in regional service might occur
because the three EDI Centers handle different file formats and not all perform transaction
validation.
• One contract.
• One communication standard.
• One security standard.
• High conversion capability into domestic formats.
• All major currencies, facilitating international transfers.
• Multiple access channel options, including H2H and ABC Bank’s electronic banking products.
• Seamless implementation using pre-tested interfaces with ERP and TMS applications.
• Support of Central Bank Reporting information; the agreed-upon file format allows information
to be given to the Bank as a download from the customer’s ERP system, facilitating Central
Bank Reporting.

<Feature 3: > Value-added services

In addition to global mass payment and collection services, abc-globalPASS offers an extensive range
of value-added options that provide qualitative benefits to clients:
• Clients receive detailed and timely information about the status and result of their processed
payments and collections.
• Transaction cancellation requests and comprehensive remittance advices are available to the
client and can be sent electronically or by fax. Note that since remittance advices are not
supported by all three EDI Centers, slight differences in regional service might occur.
• The warehousing feature gives the convenient option of sending transaction instructions for
future execution up to 30 days in advance. Certain direct debit types can be sent even up to
600 days in advance.
• Archiving and audit trail of processed transactions allows clients to keep track of the history of
any transaction for future reference.

- 11 -
ABC Bank GCM Curriculum

<Feature 4: > Customer support

In addition to the payment and collection service of abc-globalPASS, ABC Bank provides the following
benefits to its clients globally:
• A dedicated team of ABC Bank specialists assists clients in finding the optimal solution for their
companies with regard to file formats, such as EDIFACT, ASC X12, SAP IDOC, CSV or local
formats, as well as technical connectivity, such as system-to-system integration.
• The Bank has built reliable relationships with global ERP and TMS system providers. By
seamlessly integrating with their systems, clients benefit from a complete end-to-end solution.
• ABC Bank is actively working with clients in industry initiatives to create standardized global
file formats by providing transaction, processing and file format expertise.
• The Bank provides uniform customer service in each region with a dedicated hotline for
tracking instructions.

Quiz for Lesson 4.1

Question 1:
Match each feature with its corresponding attribute: <Note: Although the terms below are matched
with the correct answers, both will be presented in random order within the actual course. >

• Comprehensive service: Global solutions for bulk, Money Transfer, domestic and international
transactions.
• Flexible solution: One access point, transmission and file format for any global transaction
type.
• Value-added service: Audit trail and archival of processed transactions.

• Customer support: Uniform in each region.

- 12 -
ABC Bank GCM Curriculum

Lesson 5: Technical Tour

<SMEs: In this interactivity, the learner clicks each hotspot to learn more. Note that the chart will be
redesigned to match the look and feel of the course. >

Step 1: Convert to ABC Bank’s internal format

2 Transactions are
1 converted to ABC Bank’s
File with client internal format
transactions
Transactions are written to a
Step 2: Validate 3 database

OK transactions Reject
5 Invalidated transactions

4
6
8
Back-end

1. Pop-up text when the learner clicks File with client transactions:
A file can be received through any of the Customer Access channels supported by ABC Bank, e.g., db-
direct internet, db-direct 6.x, host-to-host, server-to-server and SWIFT.

Once a file has been received, the Customer Access server identifies and verifies that the sender can
transmit the kind of message contained in the file. Once this test is positive, the signatures are
verified by checking whether the users – who have electronically signed the file – are actually entitled
to do so based on the account, transaction types and total amount.

If the verification process fails, then the sender is informed using the instructions that were
established during implementation. For example, the system implements the instructions to inform a
dedicated security officer in the company, if that is what the client has specified during set-up.

2. Pop-up text when the learner clicks Transactions are converted to ABC Bank’s internal format:
To streamline processing, ABC Bank converts all incoming files to a generic data format and writes
transaction details to a database.

3. Pop-up text when the learner clicks Transactions are written into a database:
All validations are performed on each transaction individually based on a comprehensive set of rules
that take into account:
• The transaction type, e.g., payment vs. direct debit.
• The transaction urgency, e.g., urgent vs. non-urgent.
• The country of the orderer.
• The country of the beneficiary.
• Whether an FX deal needs to occur at the back-end.
• The requested value or execution date.

4. Pop-up text when the learner clicks OK transactions:

Transactions that pass validation are marked “ready to send.” Another process runs at regular
intervals to collect all transactions marked for conversion to the outbound file format. Once this
process is completed, the program routinely establishes contact with its relevant back-end entity, such
as ABC Bank branches, partner banks or third-party banks, and uploads the in-process transactions.

5. Pop-up text when the learner clicks Not OK transactions:

- 13 -
ABC Bank GCM Curriculum

Transactions that have failed the validation are rejected.

6. Pop-up text when the learner clicks Database server:

The system consults tables and compares what has been received.

7. Pop-up text when the learner clicks Back-end

The transactions that were passed on to the back-ends are processed by the back-end systems that
process payment instructions as if they were received directly.

8. Pop-up text when the learner clicks Reject: Clients receive error reports for rejected transactions.
These reports specify which transaction was rejected and why, thus enabling clients to repair the
original transaction and send it again.

Quiz for Lesson 5.1

Question 1:
How does abc-globalPASS handle transactions that fail validation? Select the correct answer.
Answer A: The system consults tables and compares what has been received.
Answer B: The system rejects the transactions and then offers the option to repair and resend.
<<Correct>>
Answer C: The system collects all transactions marked for conversion to the outbound file format.
Answer D: The system identifies the sender from the signature.

Question 2:
Match each technical element with its function: <Note: Although the terms below are matched with
the correct answers, both will be in random order within the actual course. >
• Customer Access server: Verifies that the sender can send a certain kind of message.
• Database server: Revalidates what has been received by the system.
• Validated transactions: Marks transactions for conversion to outbound format.
• Back-end system: Processes payment instructions as if they were received directly.

- 14 -
ABC Bank GCM Curriculum

Lesson 6: Sales Overview

6.1 Provide an overview of the sales process.

<SMEs: In this interactivity, the learner clicks each topic area to learn more. >

<Screen 1: > Revenue model and pricing components

The commercial value of abc-globalPASS is defined by the value it adds to the customers’ value chain.
Compared to domestic structures, customers are prepared to pay a premium since they do not need
to bother with domestic standards, bank relationships, formats and pricing. Based on this, they will be
able to streamline their operations and technical infrastructure. The basic pricing components are:
• Set-up fee - reflecting the complexity of the solution set-up
• Fixed maintenance fee for the ongoing support
• Premium on the transaction charges compared to domestic pricing
All of these components are modular and enable the Bank to structure individual pricing that
accurately reflects the value added to the customers’ processes.

Based on the high degree of systems integration, once implemented, the customers find it difficult to
move the business to other providers. abc-globalPASS therefore provides the Bank with a constant
revenue stream.

In addition abc-globalPASS enables the Bank to concentrate transaction volume on to the ABC Bank
platform across different countries and cross-sell related GCM and other Corporate and Investment
Bank (CIB) products.

<Screen 2: > Key sales points

In 2003, abc-globalPASS served approximately 3,200 clients from various industries and processed
over 20 million transactions, valued at almost 1.6 billion euro. This compares to only 3 million
transactions in 1999 with less than 150 clients globally. The strong growth in the number of abc-
globalPASS clients and their related transaction activity testifies to the business success of abc-
globalPASS. Recently, ABC Bank identified new opportunities to market and position its transaction
banking services for the entire trading chain.

Key sales points include:

• Flexible solution that integrates seamlessly with client environments. By focusing on the
fundamental needs of current and potential clients – seamless integration, high STP and auto-
reconciliation – we are viewed as valuable partners in the financial supply chain.
• Preferred integration partner because of the Bank’s CI capability.
• Timely and complete information exchange that supports auto-reconciliation and STP of client
processes.
• Competitive pricing resulting from lower processing costs and efficiencies resulting from global
transaction processing capabilities.

<Screen 3: > Why choose abc-globalPASS?

abc-globalPASS is not the only solution available but it does have the benefit of being a proven robust
system that is already handling a healthy volume of payments from major multinational customers, as
well as many others. ABC Bank distinguishes itself from competitors with its capability to provide both
overlay banking and embedded domestic banking services. Clients choose abc-globalPASS because of
its capacity for high-volume transaction processing and effective account reconciliation. As a result,
abc-globalPASS significantly reduces Corporate expenses by outsourcing maintenance and operational
costs associated with multiple transaction types in various countries.

Additionally, abc-globalPASS provides Corporates with access to low-cost, in-country clearing systems,
thereby significantly reducing transaction costs. Finally, using industry-standard formats in tandem
with the Integration Program provides ABC Bank client ERP and TMS vendors with standard formats
and technical connectivity that the Bank can support. This strategy leads to decreased implementation
timeframes by drastically reducing format and connectivity testing during the implementation process,
thereby providing quicker sales-to-revenue cycles for GCM and faster implementations for our clients.

- 15 -
ABC Bank GCM Curriculum

Overall, ABC Bank's global reach and local format knowledge ensure comprehensive and consistent
support, product reliability and service quality.

Quiz for Lesson 6.1

Question 1:
Steven Ross is a fictional ABC Bank Sales Team member. Steven is scheduled to meet a prospective
abc-globalPASS client. What are the key sales points that Steven needs to include in his presentation
to the client? Select ALL that apply.
Answer A: Seamless integration within client environments. <<Correct>>
Answer B: Reliable information exchange. <<Correct>>
Answer C: Global transaction processing capabilities. <<Correct>>
Answer D: Companion linkages of associated data.

Question 2:
After much deliberation, fictional client GHJ, Inc. has decided to implement a abc-globalPASS solution.
What specific points likely influenced this decision? Select ALL that apply.
Answer A: Overlay banking. <<Correct>>
Answer B: Embedded domestic banking services. <<Correct>>
Answer C: Complete stand-alone solution.
Answer D: High-volume transaction processing capacity. <<Correct>>

- 16 -
ABC Bank GCM Curriculum

6.2 Explain how to work with key decision-makers.

<SMEs: This lesson should address the following objectives:
1: Identify the key decision-makers that Sales Team members will encounter and the order in which
he or she will meet with them.
2: For each key decision-maker:
o State their needs.
o Define how abc-globalPASS addresses their needs.
o List important questions to ask.
Please confirm if the content below successfully addresses the above objectives. >

A fictitious multinational Corporate, CBZ, Inc., headquartered in Berlin, Germany, has offices in
Barcelona, Naples, Singapore, Beijing, Perth and Los Angeles. Based on preliminary leads, Angela
Sanchez, a GCM Sales Team member, recognizes a potential need for abc-globalPASS for this
Corporate client.

Angela knows that to create a positive impact, she first needs to meet the client’s Treasurer to
understand the organization’s security concerns. Next, she needs to meet the Accounts Payable and
Accounts Receivable Managers to improve her understanding of the payables and receivables
processes within the organization. These discussions provide opportunities for Angela to present how
abc-globalPASS can effectively address client needs.

1. Angela Sanchez: With offices in many global locations, how do you forecast operational cash
needs?
Winsor McCay, Treasurer: It hasn’t been easy. We need convenient access to daily cash balance
information.
Angela Sanchez: With abc-globalPASS, statements are automatically uploaded to your treasury
system on a daily basis.

2. Angela Sanchez: Once the payments have been initiated and debited to your bank account, how
do you reconcile the debits against your payables?
Laurie Yun, Manager, Accounts Payable: Currently our accounts payable reconciliation process is
manual, at least to a large extent. Because of this, we are not always as up-to-date as we’d like to
be.
Angela Smith: Using abc-globalPASS, you can automatically match your debit entries to your
payables in the ERP system.

3. Angela Sanchez: How do you cope with rejected direct debits and the multitude of return reason
codes across the various countries CBZ, Inc. operates?
Mervyn Remeika, Manager, Accounts Receivable: Currently, our reconciliation process is manual.
Rejected items appear as debits on our electronic account statements and have to be tied to the
original transaction to identify the debtor. The reject reason is presented as text in the statement.
Angela Sanchez: Using abc-globalPASS you will receive an electronic file with standard return
reason codes. Since the return information will bear your reference, you will be able to
automatically link the returned item to the correct receivables account and automatically initiate
subsequent action.

Click here to view which abc-globalPASS features you can sell for a specific target market.

- 17 -
ABC Bank GCM Curriculum

Lesson 7: Implementation Overview

<Introduction>
The implementation process for abc-globalPASS is standardized and structured, with each phase
clearly defined. The individual Implementation Managers (IM), and the abc-globalPASS solution
specialists within the in-country Implementation Teams know and understand the various formats,
security and delivery methods available. Accompanied with the Implementation Guide, the IM
possesses an overall understanding of the steps required to implement the abc-globalPASS solution.
In each region, the Bank has solution specialists who focus on smooth integration of the customers’
TMS or ERP systems with ABC Bank’s EDI Centers.

<Screen 1: > Implementation Scope

An external kick-off meeting is held with the client where the client is introduced to the solution IM
and the rest of the ABC Bank project team. The following are the main topics discussed and agreed
upon by all parties at the external kick-off meeting:
• Validate information disseminated in the proposal.
• Validate the solution to be implemented.
• Establish client contacts, i.e., Project Manager, as well as contacts for IT, Quality
Assurance (QA), Legal Documentation and project sponsors – all with partners on the
Bank’s team.
• Validate project phases and milestones, together with client expectations, including
the desired implementation timeframe and anticipated live-date.
• Arrange for follow-up, bilateral discussions between the subject matter experts if
required.

The IM then creates detailed minutes of the external kick-off meeting and the overall project plan
based on the data confirmed by the client. The client is asked to confirm all details as part of the
external kick-off meeting follow-up, prior to the beginning of solution implementation.

<Screen 2: > abc-globalPASS Technical Guides

The client specifies the file formats for implementation based upon the client ERP system output. The
IM provides a technical guide for the appropriate ABC Bank standards, along with
respective sample files. If the clients has questions on using the standards or sample
files, the IM coordinates communication between the client and the Global Integration
Product Manager to address them. If the client requests customization, then the Global
Integration Product Manager evaluates the request and advises the IM whether the
request can be supported. The IM acts as the Bank’s central interface to the client at all
times using the testing template to record all testing progress. This template is used as
the single conduit for all testing-related communication throughout the implementation.

<Screen 3: > abc-globalPASS Standards

ASC X12: The ASC X12 is a group of standards for exchanging data between trading partners. This
format is used by ABC Bank to facilitate transaction information for both payments and
collections throughout North America. This is the recommended format when clients want to
exchange US dollar-based payment and collection requests of differing types, such as for ACH,
Check and Money Transfer.

1. EDIFACT: Like ANSI ASC X12, EDIFACT is a set of standards defining the rules for electronic data
exchange between trading partners. This format is used by ABC Bank to facilitate transaction
information throughout Europe and Asia. EDIFACT is the recommended format when clients want
to exchange multicountry-based payment and collection requests of differing types, e.g., ACH,
Money Transfer or Corporate Check.

2. IDOC: IDOC is a proprietary outbound format generated by SAP’s ERP system. ABC Bank was one
of the first banks that could accept this native file format without needing to convert it to another
format that is more common with banks, such as EDIFACT.

- 18 -
ABC Bank GCM Curriculum

3. CSV: CSV is a comma-separated value or “flat” text file. This file format is often used as an
alternative if none of the above file formats can be produced by either the ERP system or TMS.

- 19 -
ABC Bank GCM Curriculum

<Screen 4: > Test Plan Development

Client testing involves creating and executing the test plan, as well as determining the various testing
methods necessary before moving clients to production. If no customizations are made to abc-
globalPASS, the following tests are necessary:
1. Format testing: Performed to ensure that the file delivered meets the syntactic and semantic
checks when processed through the abc-globalPASS system.
2. Communication testing: Performed to ensure that clients can deliver a properly authenticated file.
3. End-to-end testing: Performed to ensure that a properly authenticated file can be moved to the
respective back office system, processed and return the respective acknowledgements to clients.

Once the test plan and User Acceptance Testing (UAT) are completed, QA, Operations and IT meet to
present and discuss the test results with the client. As soon as the group completes a satisfactory
review, pre-live production starts. Pre-live production involves end-to-end processing of a series of
small denomination test payments and collections to ensure that the solution is robust and reliable.
After satisfactory completion of this phase for both Bank and client, the solution is ready to go live.

<Screen 5: > Authentication and Encryption

ABC Bank clients can be assured that any sensitive information delivered through a regional abc-
globalPASS solution is secured through a proprietary authentication and encryption procedure. For
example, in the US, this is performed using a Private Key Infrastructure (PKI). PKI consists of three
primary components: data encryption algorithm, file origination authentication and digital signature.

For the data encryption algorithm, ABC Bank requires that data information deemed sensitive in
nature, such as a data file containing account numbers, must be encrypted using the Triple Data
Encryption Standard commonly known as Triple DES. The second component, file origination
authentication, uses SHA1 for abc-globalPASS-formatted data and MD5 for non-abc-globalPASS data.
Finally, the data file must be signed with a digital signature, which uses the X509 version 3 certificate
standard.

By adhering to these standards, ABC Bank clients are assured that their files are secure, that they
were not tampered with en route to ABC Bank and that they bear the signatures of the senders. These
standards allow ABC Bank to state that this process provides complete end-to-end data security.

In the current environment, ABC Bank uses bTrade software to provide ease of data authentication
and encryption. While not required, ABC Bank encourages its clients to take advantage of the suite of
bTrade software products. If clients decide to use a different method of authentication and data
encryption, then it must be compatible with bTrade standards.

<Screen 6: > Client Set-Up on FTP Gateway

In this phase, the IM together with the Bank’s Product Management team coordinates the test and
production environment set up on the client side. The set-up consists of establishing user identification
(ID), password and folder structure for both the test and production environment.

As an example, the process followed in the US is given below:

1. FTP Gateway Access Set-Up Procedures and Test Environment: Client set-up for the test
environment on the FTP Gateway server consists of establishing the user ID and password, as well
as creating the folder in which data are exchanged. This is accomplished by sending an e-mail
request to the FTP Gateway support area.

2. FTP Gateway Access Set-Up Procedures and Production Environment: Client set-up for the test
environment on the FTP Gateway server consists of establishing the user ID and password, as well
as creating the folder in which data are exchanged. In addition, this set-up requires establishing
the job names that generate an automated notification to the PEX system that a file exists in
clients FTP Gateway folders. The set-up is then verified with ID Administration Team of FTP
Gateway. Typically, this set-up process takes two to three business days.

- 20 -
ABC Bank GCM Curriculum

<Screen 7: > VAN Communication Set-Up

A value-added network (VAN) is a third-party network provider offering information exchange services
between trading partners. Clients can connect to the VAN via a leased line.

<Screen 8: > Legal Documentation

For clients using abc-globalPASS in connection with a H2H solution, the Automated File Transfer
Agreement (AFTA) applies along with the respective agreement for the system on which the
transaction requests are processed. For example, if clients deliver ACH payments via the X12 820
Payment Order, then they are required to sign the ACH Service Agreement and the AFTA. This is true
only for FTP Gateway but not for the other access channels. Each access channel has its own contract.

Quiz for Lesson 7.1

Question 1: The following items are discussed during the pre-implementation meeting. Select ALL
that apply.
Answer A: Preferred formats. <<Correct>>
Answer B: Payment types. <<Correct>>
Answer C: Anticipated monthly volume and any peak delivery periods. <<Correct>>
Answer D: Any abc-globalPASS solution customization. <<Correct>>

Question 2: Which tests have to be performed to ensure successful abc-globalPASS implementation?

Select ALL that apply.
Answer A: Format testing. <<Correct>>
Answer B: Communication testing. <<Correct>>
Answer C: End-to-end testing. <<Correct>>
Answer D: New service testing.

Question 3: Which abc-globalPASS file format is used to facilitate transactions throughout Europe?
Select the correct answer.
Answer A: ASC X12.
Answer B: EDIFACT. <<Correct>>

Question 4: Which of the following sentences is correct? Select the correct answer.
Answer A: Client set-up on FTP Gateway involves establishing user ID and password for both the test
and production environment.
Answer B: Client set-up on FTP Gateway involves establishing user ID, password and folder structure
for the test environment.
Answer C: Client set-up on FTP Gateway involves establishing user ID, password and folder structure
for the production environment.
Answer D: Client set-up on FTP Gateway involves establishing user ID, password and folder structure
for both the test and production environment. <<Correct>>

- 21 -
ABC Bank GCM Curriculum

Conclusion

<Screen 1: >
Congratulations! You have completed the abc-globalPASS Product Course.

You should now have an understanding of:

• How the market shapes GCM’s abc-globalPASS solution and how abc-globalPASS fit into
today’s market.
• How abc-globalPASS fits into GCM’s overall strategy.
• The solution process workflow.
• Features and benefits that customers value.
• The technical architecture.
• How abc-globalPASS is sold to GCM customers.
• The implementation process.

Be sure to visit the Resources section of this course by clicking the Resources button at the top of the
page. You will find more detailed information about abc-globalPASS, as well as the content of this
course, available as printable Job Tools for ready reference.

Additionally, you can click the Scores button to view your progress and print a certificate of completion
for this course.

<Screen 3: >
What Did You Think?

Please take a moment to tell us about your experience with the abc-globalPASS course by clicking the
forward arrow at the top of the page. Your responses will be used to improve both this course and
future courses.

Thank you!

- 22 -
ABC Bank GCM Curriculum

Glossary

Account structure: The account structure describes the types of accounts that need to be opened at
the back-end to support the implementation of a cash management solution. Typical aspects to be
considered for an account structure are:
• Countries: The countries where accounts need to be operated.
• Residential status of the account owner: Whether the account is or is not registered as a legal
entity in the back end’s country.
• Currency: Whether the currency is domestic or foreign.
• Underlying activity: Are there commercial accounts for payment initiation or concentration
accounts to centralize liquidity.

ACH: Automated Clearing House (ACH) is a clearing system for processing generally low-value items
in large volumes and in a fully automated manner. This system usually handles credit transfers and
direct debits and can also handle truncated checks, debit-card payments and bills of exchange. Note
that, although this product is known regionally as “bulk payments” or “low-value payments,” the term
“ACH” is used throughout all GCM e-Learning courses.

ANSI: American National Standards Institute (ANSI) was founded in 1918 as the national coordinator
of voluntary standards in the US, including those related to communications, programming and
data management.

ASC X12: In 1979, ANSI chartered the Accredited Standards Committee (ASC) X12 to develop uniform
standards for inter-industry electronic exchange of business transactions. ASC X12 is the
coordinating body of ANSI that develops and maintains cross-industry EDI standards for North
America. Also see ANSI, EDI technology.

ASCII: American Standard Code for Information Interchange (ASCII) is the most common format for
text files in computers and on the Internet. In an ASCII file, each alphabetic, numeric or special
character is represented with a 7-bit binary number (a string of seven 0s or 1s). In ASCII, 128
possible characters are defined. UNIX and DOS-based operating systems, except for Microsoft
Windows NT, use ASCII for text files. Windows NT uses a newer code, Unicode.

Auto-reconciliation: An automatic process of identifying an open item within a Corporate’s accounts

payable or receivable system and matching the item with the associated payment or collection item
received via a bank advice or statement.

B/E systems: Back-end systems, i.e. ABC Bank branches, partner banks or third-party banks that
provide access to local clearing and transaction processing systems.

BACS: Bank Automated Clearance System (BACS) is an organization established and owned by the
major UK Banks that handles credit transfers in the British pound and a small volume of euro, as well
as direct debits in the British pound.

bTrade: Third-party software used to encrypt or decrypt, authenticate and digitally sign files sent to
and from Corporate clients. This software is used by ABC Bank and is interoperable with all open
standards-driven software packages. Although ABC Bank’s clients are not required to use this
software, the software chosen must meet the Bank’s minimum security requirements.

Cash Pool Engine: A notional pooling service that affords balance compensation across a group of
same-currency accounts held with ABC Bank with full interest-offset.

Chase Trader: Allows trading in spot and forwarding FX as well as Chase’s data, analytics, research
and market commentary. Chase FX enables users to upload portfolio/block trade details for
simultaneous execution.

- 23 -
ABC Bank GCM Curriculum

Click here: <Note: This Click here glossary term is called out in Lesson 1> Competitors. >
Competitor Product Features
Name
ABN AMRO Global • Web-based browser.
Gateway • Direct debits and payments allowed.
• Extensive customer self-service options provided.
• ANSI, EDIFACT and CSV file formats.
The • Web-based application.
Bank of Payment • All global payment instructions can be sent in a single
America Network transmission; multiple file formats accepted.
• Connected with over 60 in-country clearing systems.
• Outsourcing check production and distribution.
• Providing remittance data via the Web.
Foreign • Web-based application.
exchange • Central check- and draft-printing center in the US.
(FX) Money • Real-time rates fed by automated dealing room.
Transfer • Margin spreads with tiered pricing.
and Draft • Debit-only US dollar accounts.
• Limited to Money Transfers and drafts, i.e., no ACH
Wanda • PC Windows-based.
• STP.
• Real-time rates, same feed as FX, Money Transfer and Draft.
• Margin spreads with tiered pricing.
• Rate lock-in capability: 90 seconds.
• Ceiling of US $100,000 online; for amounts greater than
$100,000, clients must call traders.
• All currency accounts debited.
• Limited to Money Transfers and drafts, i.e., no ACH.
Citibank Wordlink • Web-based application and phone and fax available.
• Money Transfers, drafts and forward contracts.
• Dedicated trading desk in Singapore, Buffalo, NY and New York
City.
• No limit on transaction amount.
• Citibank account not mandatory.
• For non-account holders, pre-fund account options exist.
• Margin spreads with tiered pricing.
• Live traders.
• Limited to Money Transfers and drafts, i.e., no ACH.
HSBC Hexagon • Web-based browser.
• Direct debits and payments allowed.
• Inquiry and static customer data.
• ANSI and EDIFACT file formats only.
JP Morgan Chase- • PC Windows-based.
Chase trader • Real-time rates.
• Rates for 68 currencies.
• On-site and off-site draft printing.
• Trade-bundle availability.
• Margin spreads with tiered pricing.
• Debit client on value date instead of trade date.
Paysource • Host-to-host via Internet, dial-up, leased line, VAN and electronic
banking product, e.g., Chase Insight.
• EDIFACT, ANSI X.12 and SWIFT file formats.
• Money Transfers, drafts and ACH.
• Can be linked to Chase-Trader.

- 24 -
ABC Bank GCM Curriculum

Wells Fargo FX online • Web-based browser.

• Money Transfers and drafts that include on-site printing and book
transfers.
• Repetitive payment set-up available.
• Flexible, customized reporting with rate information.
• Incoming credit processing.
• Automatic error checking on calculations.

- 25 -
ABC Bank GCM Curriculum

Click here: <Note: This Click here glossary term is called out in Lesson 6.2> Last line. >
Target market File formats
US client making payments and ASC X12, NACHA and SWIFT.
collections locally.
US client requiring local advices, ASC X12 and SWIFT.
statements, controlled disbursement
access or lockbox information.
US client making payments and EDIFACT and IDOC.
collections abroad.
Non-US client making payments and ASC X12, EDIFACT and
collections in the US. EUROGIRO.
European and global clients making Country-specific local file format, EDIFACT, IDOC
payments and collections locally. and CSV.
European and global clients making EDIFACT, IDOC and CSV.
payments and collections in Europe or
globally.

Client integration (CI): Drives the development and maintains the global capability for global standard
formats, e.g., EDIFACT, ASC X12, SAP IDOC and XML. It also drives business processes, as related to
commercial payments and collections, such as client’s accounts payable and receivable needs. These
formats and processes facilitate electronic business driven by STP, S2S integration and end-to-end
auto-reconciliation. Also see: Integration Program, EDIFACT, ASC X12, SAP IDOC, XML, STP and
System-to-system (S2S).

Correspondent: A bank used by another bank to receive or pay money on transactions where the
correspondent bank is a clearer for the transaction type whereas the user bank is not. This is
necessary when either the correspondent bank is in the currency center or the user bank is smaller
and does not have the scale to be allowed to be a direct clearer.

CSV: Comma separated value (CSV) contains values in a table as a series of ASCII text lines,
organized so that each column value is separated by a comma from the next column's value
and each row starts a new line. Also see ASCII.

Data re-association: Circumnavigates national clearing system restrictions by stripping out the
remittance detail before the payment is sent for clearing and then re-associating it back to the
payment after the data returns.

db-cheque/db-check: Expands the range of products delivered through abc-globalPASS. With solutions
existing in each of the regions – Europe, Asia and the US – GCM’s db-cheque/db-check is a truly
global paper-based payment service that enables ABC Bank customers to consolidate their worldwide
check generation business through a single provider.

db-CashSweep: Allows Corporates to manage a single currency position by physically concentrating

the group's liquidity. For this service, ABC Bank provides cross-border automated funds transfers in
Europe. This solution combines the advantage of a decentralized account structure in different
European countries, supporting domestic payment and receivables business with a centralized
treasury structure, thus allowing an effective management of the group's liquidity position.

db-eBills: A global solution for online invoicing and payments delivered through ABC Bank’s worldwide
network. db-eBills provides a complete business solution for electronic billing and invoicing.

- 26 -
ABC Bank GCM Curriculum

Different payment types for different systems:

• Treasury systems for high-value urgent payments—e.g., payments from FX deals, merger and
acquisitions and large scale financing—where the timeframe is same day and settlement must
be same day and irrevocable.
• Enterprise Resource Planning (ERP) systems for low-value, non-urgent payment needs—e.g.,
small, recurring timeframe predictable and non-urgent payments to pay pensions, salaries,
subscriptions and small vendor payments.

DTAUS: DatenTrägerAustausch (DTAUS) is a file format used by German credit institutes in order to
manage money exchanges between accounts. This format is used for exchanges between two
banks, as well as banks and their customers.

EBA: Euro Banking Association (EBA) has two phases of the pan-European central clearing initiative
for the euro. The first phase involved centralized clearing for same-day value pan-European
euro transactions and the second phase is for pan-European euro clearing for bulk transactions
or next-day clearing.

EDIFACT: Electronic Data Interchange for Administration, Commerce and Transport (EDIFACT) is the
international EDI standard, which is backed by the United Nations. The first EDIFACT standard was the
international invoice that was approved in March of 1988.

EDI technology: Electronic Data Interchange (EDI) represents the transfer of structured, machine-
processed data between different trading partners via formalized computer-to-computer
communication using networks, such as the Internet, a VAN or other transmission means,
including leased lines or dial-up modem. Typically, EDI is meant for routine business transactions
and takes place applying an approved set of standards developed and published by organizations.
These include ANSI, known as ASC X12 standards, or the United Nations-backed EDIFACT
standards. ABC Bank’s EDI Center applications dispose of sophisticated translator functionalities,
enabling the Bank to accept multiple formats from business partners and translate them into the
respective back-end (clearing system) formats for processing. Also see VAN, ANSI, ASC X12.

EDI Center: The EDI Centers in Germany, Singapore and New York can receive ABC Bank client files in
one file format and convert the payment transactions to another file format that can be understood by
the transaction processing system in the back-end. Before converting the instructions received, the
EDI Center checks whether the contents of the transaction are correct and sufficient to allow for STP
in the back-end. Also see STP.

Electronic bills of exchange: An electronic version of a bill of exchange is a written, dated and signed
third-party instrument containing an unconditional order by a drawer that directs a drawee to pay a
definite sum of money to a payee on demand or at a specific future date; this is also known as a draft.
The face value of the electronic version of the bill of exchange can be collected electronically via local
ACH. Also see ACH.

Electronic deposit box: This is another term used for FTP drop-box and FTP Gateway. Also see FTP
drop-box and FTP Gateway.

Enterprise Resource Planning Systems (ERP): Fully integrated, company-wide accounting and
management systems that use sophisticated database software to provide reports and
information. Most modern ERP systems provide interfaces to electronic data interface and e-
commerce formats, as well as protocols that allow e-commerce practices to be easily
implemented within the organization. ERP providers include SAP, Oracle, PeopleSoft, Lawson and
JD Edwards.

ETS: Enterprise Treasury System.

EUROGIRO: A European ACH system used by the postal banks in Europe for clearing transactions. Also
see ACH.

- 27 -
ABC Bank GCM Curriculum

External upload: The process of uploading a file from an external source, i.e., outside the application.

File/data: Payments, purchase orders, invoices and other business documents.

Financial supply chain: Range of activities or tasks related to financial processes, starting with the
invoice and ending with reconciling and reporting.

Foreign exchange (FX): A banking operation to exchange one currency for another – either at once,
known as “spot” – or in the future, known as ”forward.”

FTP drop-box: File transfer protocol (FTP) is a globally accepted standard for file-based transfers. A
drop-box is a physical server with a specific uniform resource locator (URL) where files can be
deposited or retrieved up. Typically, a user identification and password are needed to enter the server.

FTP Gateway: Another term used for FTP drop-box and Electronic drop-box. Also see FTP drop-box.

Global formats: IDOC, EDIFACT, EDI and CSV. Also see IDOC, EDIFACT, EDI and CSV.

Hash value: A shortened unique identifier for a string of text, generated by applying a formula to the
string in such a way that is extremely unlikely that some other string will produce the same hash
value.

Host-to-host (H2H): Provides a direct connection to the ABC Bank mainframe from client mainframes.
The direct connection into ABC Bank is typically established via leased lines ensuring high-speed
transmission performance. This solution caters for the ability to process transactions in a real-time
environment. H2H connection is available for both EDIFACT and domestic ANSI ASC X12 clients. Also
see EDIFACT, ANSI ASC X12.

IDOC: SAP’s Intermediary Document (IDOC) is a structured set of electronic information that is
exchanged between two independently existing partners and must adhere to some well-defined format
or language. These conventions should be acceptable to both the sender and receiver. SAP uses IDOC
PEXR2001 as an output format, e.g., to be used for the transmission of payment instructions to banks.
Also see IDOC PEXR2001, SAP.

IDOC PEXR2001: IDOC was created by SAP in the early 1990s as a standard format based on the
EDIFACT standard of that time, i.e., PAYEXT, and is used as an export format representing
data held within SAP databases. Also see EDIFACT, IDOC and SAP.

Information Technology Infrastructure: A group that standardizes ABC Bank business lines including
GCM, Global Markets and Private Client and Asset Management (PCAM).

In-country: The 12 countries participating in the European Monetary Union (EMU): Austria, Belgium,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain.

Integration Program: The computer program written to transfer data into and out of client-owned
information technology (IT) applications and into and out of IT applications supplied by banks or
independent vendors. The key client-owned IT applications relevant to GCM are Treasury Management
and ERP systems. Also see Treasury Management System (TMS) and Enterprise Resource Planning
(ERP).

LCR: The “Lettre de Change Releve” (LCR) is a commercial draft or electronic bill of exchange in
France. It is also the most common commercial instrument in France because it is a means for the
drawer to raise short-term financing at marginally cheaper rates than straight borrowing, i.e., the
draft beneficiary can present the draft to a bank and receive the amount due in advance with a
discount.

- 28 -
ABC Bank GCM Curriculum

Local file formats: File formats used in particular national clearing systems for settlement between two
domestic accounts, for example NACHA in the US, BACS in the UK and DTAUS in Germany. Also
see NACHA, BACS and DTAUS.

MD5: Message-digest algorithm 5 (MD5) is a type of hashing algorithm used to digitally sign a
message.

Money Transfer: Although this GCM Category of products is also known regionally as “high-value
payments (HVP),” “individual payments,” “Money Transfer” or “electronic funds transfer (EFT),” the
term “Money Transfer” is used throughout all GCM e-Learning courses when referring to Corporates.
The corresponding global term for FIs is “clearing.”

Multiple payment instruments: These include:

• Bank draft issuance
• Customer checks printing
• Domestic direct debits
• Domestic mass payments
• Domestic treasury and urgent payments
• Electronic bills of exchange
• International transfers in any major international currencies
• Payments with Central Bank reporting requirements
• Urgent international transfers

NACHA: The National Automated Clearing House Association (NACHA) establishes rules, industry
standards and procedures governing the exchange of commercial ACH payments. NACHA format
refers to ACH record format specifications that are accepted and warranted standards for payments
delivered via the ACH network. Also see ACH.

OFAC: The Office of Foreign Assets Control (OFAC) administers and enforces economic and trade
sanctions against targeted foreign countries, terrorism-sponsoring organizations and international
narcotics traffickers based on US foreign policy and national security goals. OFAC has the authority to
impose controls on financial transactions and to freeze foreign assets under US jurisdiction.

Overlay banking: Developed in the 1980s for use by US multinationals that were establishing treasury
centers in Europe. Most of these companies used one major cash management bank in
each country to provide local services and in-country cash pools for all subsidiaries. The
overlay bank’s job was to coordinate this structure and to link the local cash pools. In each
country, the treasury center held an account(s) at the local branch of the overlay bank that
could be used to pull out any surplus funds from the local cash pool or to fund cash pool
shortages. Funds were moved between the overlay bank and the domestic bank for same-
day value using the national high-value clearing systems. All movements were established
to ensure that there were no lifting charges and that resident-to-nonresident movements
occurred within the overlay bank. Likewise, any Central Bank reporting necessary would be
the job of the overlay bank. Surpluses in one currency could be swapped for currencies
where there were shortages, debiting or crediting the appropriate overlay accounts.

Payment Factory: An SSC in its own right or it could function within a shared facility that also provides
other services to a Corporate. Often a Payment Factory is linked to a Corporate’s IHB or group TC and
provides a service for processing payments – and often collections – from one central location.

PEX: Payment Exchange (PEX) is the name of the ABC Bank EDI Center in the US. It fulfills the same
functionality as the EDI Center in Eschborn.

RIBA: Payment instrument in Italy. Data is routinely submitted to the collecting banks by direct
transmission or via diskette. This “automated” instrument is known as “ricevuta bancaria
automatizzata” or RIBA.

- 29 -
ABC Bank GCM Curriculum

RTGS: In a real-time gross settlement system (RTGS), the value transfer occurs on a real-time basis,
with the paying bank being debited and the receiving bank being credited. Each transaction
results in an immediate settlement and value transfer, rather than a net settlement system
where a number of transactions are combined on a periodic basis and only then are the net
amount of the transactions settled with a value transfer.

Server-to-server (S2S): Direct connection of one midrange computer, such as a server, to another
one. Examples of servers are UNIX and LINUX.

SAP: With over 25 percent market share, System Analysis Program (SAP) is the number one
enterprise resource planning (ERP) system provider.

SHA1: An algorithm used to produce a hash value of some piece of data, such as a message or
session key to digitally sign a message. Also see Hash value.

SSC: Shared Service Center (SSC) is a company or department established by a parent Corporate
servicing several subsidiaries and/or affiliates, which carries out administrative work on behalf of and
in the name of the subsidiaries, as opposed to the subsidiaries maintaining staff and information
technology (IT) applications to manage the work themselves. The SSC, which is paid an administrative
fee by each subsidiary, usually performs accounting, reconciliation, travel expenses, invoicing and
accounts payable and receivable processes, although it could also perform non-financial activities.

Straight-through processing (STP): Any end-to-end electronic automated process that is completely
free of manual or human intervention.

SWIFT: The Society for Worldwide Interbank Telecommunication (SWIFT) is a cooperative organization
owned by the world's banks that provide a secure communication network for interbank messaging
relating to financial transactions. SWIFT also sets standards for those messages in the form of specific
series of messages, e.g., 1nn series for customer payments, 2nn for interbank payments and 3nn for
treasury transaction confirmations.

SWIFTNet FileAct: Allows secure and reliable transfer of files and is typically used to exchange batches
of structured financial messages and large reports.

TARGET: The Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET)
system allows member institutions to make and receive same-day large-value euro payments on their
own behalf and on behalf of their customers to and from all other European Union (EU) countries,
linking together the European RTGS systems. Also see RTGS.

TC/IHB: Depending on the Corporate’s management, the Treasury Center (TC) might act as a central
agent operating all financial transactions on behalf of the group companies and be compensated on a
cost-plus basis. Conversely, TC might also act as the Corporate’s central in-house clearing bank (IHB)
operating the group’s financial management as its own business—either on an SSC basis where the
group entities have direct relations with the TC or in competition with third-party banks.

Treasury Management System (TMS): Systems used by Corporates to manage foreign currency
positions and trading, interest rates and liquidity management. The treasury management system
providers that are part of ABC Bank’s Integration Program include Bottomline Technologies, Evare,
Gateway Systems, IT/2 Choice, Integrity, Selkirk Financial Technologies, SunGard Treasury Systems -
Resource IQ, Quantum, ICMS and GTM, Wall Street Systems, Trema and XRT.

Value-added network (VAN) connection: Provides ABC Bank clients with an option access via a third-
party network provider. Data are exchanged with the trading partner using an individual mailbox
and/or class within the mailbox. The Bank currently uses the IBM Advantis VAN. Clients might have
this VAN or any number of others. As long as the client VAN and ABC Bank VAN are interoperable,
data exchange can occur.

- 30 -
ABC Bank GCM Curriculum

X.509 version 3: An International Telecommunication Union (ITU) standard defined for a digital
certificate used in Public Key Infrastructure (PKI) to identify a particular entity for example, people,
computers, printers, etc. X.500 is a database of named entities that are intended for global entity
identification. The X.509 was first published in 1988 as part of the ITU X.500 directory services
standard. The latest version 3.0 was released in 1996. While the X.500 directory services have failed
to take hold, the use to X.509 certificates has become the leading framework for certificate services.

X12 820 Payment Order: EDI format type that clients use to deliver ACH payments, payment order or
remittance advice.

- 31 -