Remittance Processing Disaster Recovery Are You Prepared? Michael Lindsey SVP 3 Point Alliance Jon Gage Product Manager Cloud Processing Creditron

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1 Remittance Processing Disaster Recovery Are You Prepared? Michael Lindsey SVP 3 Point Alliance Jon Gage Product Manager Cloud Processing Creditron

2 AGENDA Risk Analysis Best Practices our Top Ten list A Creditron / 3 Point Solution

3 RISK ANALYSIS Financial Risk Customer Service Risk How much should we be willing to spend on a DR solution?

4 FINANCIAL RISK Remittance revenue stream what % of the revenue stream is from mailed payments? Payments Hub does the remittance system function as a payments hub? Cashflow, funding, use of funds what level of tolerance does our Treasury department have for cashflow interruptions?

5 FINANCIAL RISK Receivables management does a delay in A/R posting result in late fees or delinquency notices to customers? Compliance does a delay in A/R posting result in compliance issues (e.g. credit card and insurance payment posting regulations)?

6 CUSTOMER SERVICE RISK Customer goodwill what level of customer payment disruption is acceptable? Customer service costs What is the cost of call center volume increases due to payment delays? What is the cost of as of adjustments and late fee waivers due to A/R posting delays?

7 RISK ANALYSIS Given all of the hard and soft costs of a receivables posting disruption, how much should we be willing to spend annually on a DR solution?

8 AGENDA Risk Analysis Best Practices our Top Ten list

9 TOP TEN BEST PRACTICES 1. Develop a comprehensive DR Plan Failing to plan is planning to fail Use a certified (CBCP) consultant. Identify and involve all stakeholders in the DR Plan (IS, IT, Treasury, A/R, Ops, Compliance, etc.).

10 TOP TEN BEST PRACTICES Consider degrees of disasters how long will it last? Acceptable costs how much are we willing to spend annually for DR? Consider the scope of DR payment processing Process all payments in DR mode? Process only large or only clean payments? Process check payments or e payments only? Alter the scope periodically. Keep the DR Plan current review and update the plan at least annually and following any significant systems change.

11 TOP TEN BEST PRACTICES 2. Examine all DR provider alternatives DR Vendor BPO Vendor Corporate partner Dedicated internal DR site Separate internal processing site Consider DR for the DR of each provider / solution What if the primary solution fails?

12 TOP TEN BEST PRACTICES 3. Select the DR approach that fits your needs Cold DR initiate plan, ship payments to DR site. Mobile DR initiate DR plan, provider brings resources to the company site. Hot DR DR processor regularly handles a portion of company payments. DR is initiated and payments are shipped from company to provider.

13 TOP TEN BEST PRACTICES 4. Watch the geography The primary DR site should be in a different region than the company processing site. The secondary DR site should be located in a third region.

14 TOP TEN BEST PRACTICES 5. Develop a DR Statement of Work Prepare an SOW prior to establishing a dialogue with potential DR providers. The SOW should be utilized like an RFP to prospective providers.

15 TOP TEN BEST PRACTICES 6. Make sure that the DR agreement establishes your Right to Use priority Where does your company fit into the pecking order should several of the DR provider s clients declare a disaster? Right to Use should be a factor in negotiating the DR Fees.

16 TOP TEN BEST PRACTICES 7. Negotiate Service Levels to fit your cost/needs criteria Optimize cost vs. SLA metrics Fees may be lower if the processing window for the DR provider is longer Is 48 or 72 hour processing acceptable? Less frequent ICL and A/R files may be more cost effective than daily transmissions.

17 TOP TEN BEST PRACTICES 8. Keep the solution current Incorporate version control for the software and business rules into the DR plan. Incorporate into the DR plan a methodology for keeping Databases and tables current. Validate workflow against any production or DR hardware changes. Validate DR site connectivity to data endpoints following production changes.

18 TOP TEN BEST PRACTICES 9. Consider the cloud! Accessibility A cloud hosted archive provides uninterrupted customer servicing, regardless of the DR scenario. Ease of update Transaction information can be easily uploaded to a cloud hosted archive from any DR processing site. Information integrity a cloud hosted archive eliminates post disaster archive merging and reduces the potential of lost or duplicated data.

19 TOP TEN BEST PRACTICES 10. And the number 10 Best Practice is Test & Modify, Test & Modify At least semi annually. Conduct a Lessons Learned de briefing session following each test then update the plan. The DR coordinator should develop a follow up plan to remediate any failed aspect of the DR exercise. Start each DR test planning exercise with a review of successes and failures from the previous exercise.

20 AGENDA Risk Analysis Best Practices our Top Ten list A Creditron / 3 Point Solution

21 A CREDITRON / 3 POINT SOLUTION Applicable to users of Creditron ItemAge Express (IAX) remittance processing software. 3 Point uses IAX for client processing at our three production sites. DR processing utilizes existing excess capacity and 3 Point employees that regularly use IAX for processing 3 Point client payments.

22 A CREDITRON / 3 POINT SOLUTION Implementation The processing specifications are built around the customer s DR plan and SOW. A DR SOW is developed that outlines the responsibilities of the customer, Creditron and 3 Point, as well as the SLAs and Service Fees. The application software is installed at 3 Point by Creditron and tested by both. 3 Point and the customer conduct a User Acceptance Test.

23 A CREDITRON / 3 POINT SOLUTION Maintenance Creditron will update the application software whenever there is a change. Customer will send updates to 3 Point periodically for validation files, tables, etc.

24 A CREDITRON / 3 POINT SOLUTION The Value Proposition Creditron + 3 Point Low cost to establish DR uses existing software. Timeliness of implementation no development, so the establishment of DR can be accomplished quickly relative to other alternatives. Ease of administration service agreements and fees through your existing licensing and maintenance agreements with Creditron.

25 A CREDITRON / 3 POINT SOLUTION Hot DR advantages You only have to redirect mail during a disaster. All work types processed. Normal daily outputs for ICL and A/R files. No periodic testing required. No issues of application version control, validation files/tables updates. Production volumes at 3 Point can be varied, providing for load leveling during customer payment volume cycles. Lowest cost alternative; avoids opex and capex of other solutions.

26 Next Steps We would be happy to discuss DR solutions in greater detail with your company. For more information please contact: Michael Lindsey 3 Point Alliance [email protected] Jon Gage Creditron [email protected]

27 About Us About 3 Point Alliance 3 Point Alliance is a pioneer in the development and deployment of vertically integrated remittance processing software and hardware, business continuity services and financing for insourced and out sourced payment applications. Our four companies 3 Point Payment Processing, Qwinstar Corporation, Equipment Leasing Organization and Business Continuity Services create innovative, efficient and cost effective accounts receivable solutions for our customers. Our wholesale and retail remittance service centers provide flexible, scalable solutions across many business categories including finance, utilities and cable companies. 3 Point processes millions of payments each month for some of the largest companies in the US and has clients in more than 40 US states and Canada. 3 Point Alliance is based in Clifton, NJ, and has facilities in Philadelphia, PA, Seattle, WA, Saint Paul, MN, and Chicago, IL. To learn more, visit About Creditron Creditron is a leading provider of payment processing, distributed capture, receivables management and electronic billing and payment solutions. Its solutions combine industry standard operating systems and advanced imaging, scanning and data recognition technology to help financial institutions, businesses and other entities optimize operations performance and improve customer service. The company s over 400 North American customers process more than 400 million transactions annually, representing more than $100 billion. To learn more, visit