Federal Reserve System Secure Payments Task Force March 2-3, 2016 Kansas City

Welcome Remarks Esther George 2

Accomplishments, Task Force Objectives and Work Plan Todd Aadland 3

Accomplishments To-Date Collaborated on the Effectiveness Criteria Ongoing Support of the Evolution and Adoption of Standards Expanded Payment Security Research Identified Areas of Focus for Future Action 4

Secure Payments Task Force March 2-3, 2016 Meeting Objectives Celebrate the launch of the initial Secure Payments work efforts and foster relationship building across the Secure Payments Task Force Continue to advance deliverables associated with the Secure Payments Task Force Define a Decision-Making Framework for the Secure Payments Task Force Outline efforts for how best to sustain Secure Payment Task Force engagement Gain common understanding of key components with the Faster Payments Initiative and interaction with the Secure Payments Task Force 5

Secure Payments Task Force Agenda Day One March 2-3, 2016 Time Topic Speaker 10:00 10:10 AM Welcome Remarks Esther George 10:10 10:45 AM Accomplishments, Task Force Objectives and Work Plan 10:45 11:15 AM Work Group Update 11:15 AM 12:30 PM Task Force and Broader Stakeholders Engagement Plan and Discussions Todd Aadland Tammy Hornsby-Fink Connie Theien 12:30 1:30 PM 1:00 1:30 PM LUNCH OPTIONAL: Payment Identity Management Work Group Feb 16-17 In-Person Meeting Debrief 1:30 2:00 PM Information Sharing Case Study 2:00 2:15 PM Introduction to Working Sessions Brian Peretti Courtney Kidd 2:15 2:30 PM BREAK 2:30 5:00 PM Working Sessions Payment Identity Management Information Sharing for the Mitigation of Payment Risk/Fraud Standards Assessment Team 5:00 5:15 PM Day One Wrap Up and Day Two Preview Nancy O Malley Glen Ulrich Stephen Mott Todd Aadland 5:15 7:00 PM Reception 6

Secure Payments Task Force March 2-3, 2016 Agenda Day Two Faster Payments Initiative Agenda Item Time Topic Speaker 8:30 8:45 AM Welcome and Day Two Overview Todd Aadland 8:45 9:45 AM Faster Payments Initiative Work Plan Effectiveness Criteria Capability Showcase Qualified Independent Assessment Team (QIAT) Process 9:45 10:00 AM SPTF / FPTF Interaction Plan Updates Sean Rodriguez Dan Gonzalez Todd Aadland 10:00 10:15 AM BREAK 10:15 11:15 AM Day One Working Sessions Report Out Panel 11:15 AM 12:15 PM Decision-Making Framework 12:15 12:30 PM Closing Comments and Wrap Up Todd Aadland (Facilitator) Stephan Mott Nancy O Malley Glen Ulrich Ed O Neill Todd Aadland 12:30 1:30 PM LUNCH 7

Secure Payments Task Force March 2-3, 2016 Anti-Trust Compliance Statement Task Force Participants are expected to ensure that their participation and communications at Task Force meetings do not violate antitrust laws. This means that no activity or discussion at our meetings or other related functions may be engaged in for the purpose of bringing about any understanding or agreement among participants to do any of the following: (a) raise, stabilize, or set future prices; (b) regulate future production levels among individual participants; (c) allocate geographic markets or customers; (d) encourage boycotts or seek to exclude specific participants; or (e) aid in creating improper monopolies. In addition, participants should avoid discussing or revealing any individual participant s competitively sensitive information, including any participant s prices, discounts, costs, capacity, inventory, sales, future business plans, or bids for contracts. Any questions regarding the meaning or applicability of this statement, as well as any concerns regarding activities or discussions at Task Force meetings, should be promptly brought to the attention of counsel for the Federal Reserve Bank, present at the meeting. 8

Objectives and Work Plan Core Objectives Strategy #3 Work to reduce fraud risk and advance the safety, security and resiliency of the payment system Establish and lead a payment security task force to: Provide advice on payment security matters Coordinate with the faster payments task force to identify solutions for any new or modified payments infrastructure so that it is both fast and secure Determine areas of focus and priorities for future action to advance payment system safety, security and resiliency Support the evolution and adoption of appropriate payment security standards Explore potential improvements to the Federal Reserve s publicly available payment fraud data, conduct payment security research to inform industry and policy decisions, and share results with payment stakeholders Source: Strategies for Improving the U.S. Payment System (Jan. 15) 9

Objectives and Work Plan Work Plan Introduction Determine areas of focus for payment security and priorities for future action Advise the Fed on payment security matters Coordinate with the Faster Payments Task Force Other Aligned with Secure Payments objectives New Other category added for activities that do not align with primary categories Current focus is on 2016 activities Work Plan will be supported with detailed project plans for activities, where appropriate 10

Objectives and Work Plan Determine areas of focus for payment security and priorities for future action Initiative Payment Identity Management 1 Information Sharing for the Mitigation of Payment Risk/Fraud 1 Data Protection Law and Regulation Coordination Work Group Support: Standards Assessment Support Team 1 Work Group Support: Work Group Decision-Making Framework Status In Progress In Progress Not Started Not Started In Progress In Progress J F M A M J 2016 J A S O N D 1 Duration is a estimate to be updated after detailed planning is completed. 11

Objectives and Work Plan Advise the Fed on payment security matters Initiative Develop plan for Federal Reserve support for standards Identify and participate on industry standards efforts (based on perceived industry value) Expand existing Fraud Data collection within the Federal Reserve Payments Study Explore additional Fraud Data collection by Federal Reserve Develop Federal Reserve research agenda, including data collection and reporting, associated with industry and policy approaches for payment security Status In Progress In Progress In Progress Not Started Not Started J F M A M J 2016 J A S O N D 12

Objectives and Work Plan Coordinate with the Faster Payments Task Force Other Initiative Effectiveness Criteria Qualified Independent Assessment (QIA) Advisory Team Liaisons Final Work Product Status Complete In Progress Not Started J F M A M J 2016 J A S O N D Initiative Task Force Decision-Making Framework Expand use of FedPaymentsImprovement.org and Task Force Knowledge Central Collaboration Tool Status In Progress In Progress J F M A M J 2016 J A S O N D 13

Work Group Update Areas of Focus and Priorities for Action Tammy Hornsby-Fink 14

Work Group Update Areas of Focus and Priorities for Action Task Force Timeline AUGUST 15 OCTOBER 15 NOVEMBER 15 DECEMBER 15 Task Force Meeting Steering Committee Meeting Task Force Meeting Steering Committee Meeting Identified 12 payment security problem statements and work group concepts Reviewed, and refined problem statements Hosted task force segment calls Refined work group concepts Prioritized top four most valuable work group concepts Task force launches 1-2 high priority work groups 15

Work Group Update Planned 2016 Secure Payments Work Groups Work Group 1: Launch Date: January 2016 Payment Identity Management Chair: Nancy O Malley Chief Payment System Integrity Officer, MasterCard # Members: 41 Work Group 2: Information Sharing for the Mitigation of Payment Risk / Fraud Launch Date: March 2016 Chair: Glenn Ulrich Senior Vice President & Operations Executive, US Bank # Members: 17 16

Work Group Update Planned 2016 Secure Payments Work Groups Work Group 3: Data Protection Launch Date: 2Q 2016 Chair: Reed Luhtanen Senior Director Payments Strategy, Walmart # Members: TBD Work Group 4: Launch Date: Law and Regulation Coordination TBD Chair: Victoria Strayer Group Executive Enterprise Business Compliance, TSYS # Members: TBD 17

Work Group Update Payment Identity Management Work Group Launch Plan Activity Date Status Work Group Chair Selection December 2015 Complete Assignment of Federal Reserve Resources January 2016 Complete Work Group Sign-up December 22, 2015 January 8 2016 Complete Coordination Call with Chair January 14, 2016 Complete Kick-Off Call January 22, 2016 Complete Collaboration Tool Setup February 2016 Complete Initial Work Group Meeting February 16-17, 2016 Complete Post Launch Review March 2016 Not Started 18

Work Group Update Payment Identity Management High-level Composition 6 2 End User 7 Financial Institutions Non-Bank Providers 10 Other Stakeholders (Academics, Consultants, Others) 16 Other Stakeholders (Industry Trade Organization, Payment Rules and Standards) 19

Work Group Update Information Sharing for the Mitigation of Payment Risk/Fraud Work Group Launch Plan Activity Date Status Work Group Chair Selection December 2015 Complete Assignment of Federal Reserve Resources February 2016 Complete Work Group Sign-up February 8-19, 2016 Complete Coordination Call with Chair February 25, 2016 Complete Collaboration Tool Setup February 2016 Complete Kick-Off Call/Initial Work Group Meeting March 2, 2016 Scheduled Post Launch Review April 2016 Not Started 20

Work Group Update Information Sharing for the Mitigation of Payment Risk/Fraud High-level Composition End User (0) 5 Financial Institutions 7 Non-Bank Providers Other Stakeholders (Academics, Consultants, Others) 2 3 Other Stakeholders (Industry Trade Organization, Payment Rules and Standards) 21

Objective Work Group Update Standards Assessment Team Assess relevant industry standards, document standards gaps and identify opportunities to remediate in support of the Secure Payments Task Force work groups The team will consist of a group of security professionals led by Steering Committee member Stephen Mott and supported by staff from the Federal Reserve to coordinate efforts and manage communication tools The team will collaborate with the Payment Identity Management and the Information Sharing for the Mitigation of Payment Risk/Fraud work groups (as well as any future work groups) 22

Work Group Update Standards Assessment Team Launch Plan Activity Date Status Team Lead Selection January 2016 Complete Assignment of Federal Reserve Resources February 2016 Complete Team Sign-up February 8-19, 2016 Complete Coordination Call with Team Lead February 19, 2016 Complete Collaboration Tool Setup February 2016 Complete Kick-Off Call/Initial Meeting March 2, 2016 Scheduled Post Launch Review April 2016 Not Started 23

Work Group Update Standards Assessment Team High-level Composition End User (0) 2 2 Financial Institutions (0) Non-Bank Providers Other Stakeholders (Academics, Consultants, Others) 3 Other Stakeholders (Industry Trade Organization, Payment Rules and Standards) 24

Work Group Structure Task Force Chair + Steering Committee Payment Identity Management Information Sharing for Mitigation of Payment Risk / Fraud Data Protection Law and Regulation Coordination Chair Nancy O Malley Vice Chair Members - 41 FR Liaison Tammy Hornsby-Fink FR Support Beth Reynolds FR Mktg. / Comms. Angela Breshears Chair Glen Ulrich Vice Chair Members 17 FR Liaison Ed O Neill FR Support Aaron Rosenbaum FR Mktg. / Comms. Marissa Parker Chair Reed Luhtanen Vice Chair Members FR Liaison FR Support FR Mktg. / Comms. Chair Victoria Strayer Vice Chair Members FR Liaison FR Support FR Mktg. / Comms. Standards Assessment Team Team Lead Steve Mott (e.g. Industry Experts in Payment Standards) Federal Reserve Support Team (e.g. Research, Industry Relations) 25

Work Group Chair (Steering Committee Member) Work Group Roles and Responsibilities Primary "champion that supports and promotes the work group to other Steering Committee Members and the Task Force Responsible for delivering on work group objectives by planning and executing deliverables Presides over work group meetings ensuring full participation and relevant matters are discussed Provides high level guidance to the work group Communicates work group status to the Steering Committee and Task Force Chair Work Group Vice Chair (Task Force Member from a different Industry Segment than the Chair) Acts on behalf of Work Group Chair in the absence of the Work Group Chair and therefore has the same responsibilities Work Group Members Actively contributes to work group objectives Provides perspectives and expertise to achieve deliverables and outcomes 26

Federal Reserve Liaison Work Group Roles and Responsibilities Single point of contact to the work group for Federal Reserve resources (e.g. Research, Industry Relations) Coordinates additional Federal Reserve System resources on behalf of the work group Federal Reserve Support Manages agendas, meeting documentation and meeting notes Manages work group s documentation within the collaboration tool Federal Reserve Communications Provides scheduling and hosting of work group calls and meetings Manages the communications and messaging associated with work group activities (e.g., broader Task Force, community, etc.) Assists with actively soliciting engagement and input from the broader Task Force and community Administers work group s collaboration tool site 27

Work Group Update Charter Iteration To advance un-launched work groups, the Data Protection and Law and Regulation Coordination Work Group Chairs will utilize the collaboration tool to iterate on the charters with the full Secure Payments Task Force Draft Charters will be posted in the collaboration tool for comment by the full Task Force Federal Reserve support resources will work with the Work Group Chair to consolidate comments and suggestions for incorporation into Draft Charters Updated versions of Draft Charters will be posted to the Collaboration Tool for comment by the full Task Force Process may be repeated until the Work Group Chair believes the Draft Charter is sufficiently complete or work group is launched 28

Task Force and Broader Stakeholder Engagement Plan and Table Top Discussions Connie Theien 29

Secure Payments Task Force March 2-3, 2016 Anniversary Campaign Objectives The work of the Faster and Secure Payments Task Force are promoted in the context of a one-year progress report on the Strategies for Improving the U.S. Payment System Further expand awareness of the Federal Reserve payment system improvement plan and its benefits Highlight year one accomplishments across all strategies to demonstrate progress toward desired outcomes Preview initiative key next steps and opportunities for involvement Build support and engagement across all industry segments for the plan and active work efforts 30

Secure Payments Task Force March 2-3, 2016 Anniversary Campaign Audiences and Key Messages Audiences FedPayments Improvement Community Members of Task Forces, Remittance Coalition, Advisory Groups Financial institutions Trade associations Key influencers across all segments Payments industry stakeholders broadly through targeted media, social media and task force member outreach activities Accomplishments and Next Steps Key Messages Identified payment security issues for 2016 focus Counseled the Fed on securityrelated research and education activities Contributed to the development of the security-related Faster Payments Effectiveness Criteria Launched the Payment Identity Management work group Working to launch additional work groups in 2016 31

Secure Payments Task Force March 2-3, 2016 Esther Video Jerome Powell Federal Reserve Board Governor 32

Secure Payments Task Force March 2-3, 2016 Communication Toolkits Communication toolkits were distributed to task force members to support communication with external stakeholders. Key messages, target audiences and distribution guidelines FAQS from task force meetings and industry engagements Links to FedPaymentsImprovement.org content PowerPoint presentation with talking points Email/Blog/Newsletter template Social media messages Contact information for Fed staff and subject matter experts Progress report and Criteria fact sheet (digital on web; printed copies available by mid-feb) 33

Secure Payments Task Force March 2-3, 2016 Table Top Discussions Opportunity to Provide Feedback on Communication Toolkits How is the toolkit meeting your needs? What worked well? What can we improve? How have you personally influenced engagement efforts? What are you hearing? 34

Secure Payments Task Force March 2-3, 2016 Task Force Engagement Engagement on Work Groups efforts o Updates via Task Force Knowledge Central, meetings, calls o Input on deliverables via surveys, discussion boards, drop-in calls o Approval of work products and deliverables from the work groups Ongoing task force participation o Revised participation agreement o Business case for participation Collaboration via Task Force Knowledge Central 35

Secure Payments Task Force March 2-3, 2016 Task Force Engagement Task Force Knowledge Central Task Force Engagement Deliverable: Enhance process, tactics and tools for information dissemination and collaboration Task Force Knowledge Central Launched January 19 New collaboration tool will provide streamlined communications and organized content that will help you: Connect with task force members across both Faster and Secure Collaborate with task force members by posting documents, commenting on posts, asking a question or marking a post Like Locate communication toolkits to promote task force efforts Quickly find materials for upcoming or past task force meetings 36

Secure Payments Task Force Access all Communities including the Capabilities Showcase March 2-3, 2016 Task Force Knowledge Central Don t forget to Sign-up Today! Welcome/Descripti on section on each page will highlight key information you need to know Browse to Communities (i.e., Payment Task Forces) and Topics (i.e., 2015 meetings) within a community to find content Mark an entry as your Favorite Ask a question Add a comment, community event, document, video or new glossary term Edit Your Subscription (i.e., email notifications) Send an Email to a Task Force member Content posted by Fed Admins will include the Federal Reserve System symbol 37

Information Sharing Case Study Brian Peretti U.S. Treasury 38

Introduction to Working Sessions Courtney Kidd Deloitte 39

Introduction to Working Sessions Payment Identity Management Ozark Room Information Sharing for the Mitigation of Payment Risk/Fraud Rocky Mtn Room Standards Assessment Team Flint Hill Room 40

Day One Wrap Up and Day Two Preview Todd Aadland 41

Federal Reserve System Secure Payments Task Force March 2-3, 2016 Kansas City Day 2

Welcome and Day 2 Overview Todd Aadland 44

Faster Payments Initiative Sean Rodriguez Dan Gonzalez 45

Secure Payments Task Force March 2-3, 2016 Faster Payments Initiative Task Force Update High-level update on the Faster Payments Initiative Final Faster Payments Effectiveness Criteria Update on Qualified Independent Assessment Team (QIAT) Process Gain common understanding of key components within the Faster Payments Initiative and interaction with the Secure Payments Task Force 46

Secure Payments Task Force March 2-3, 2016 Faster Payments Initiative Task Force Mission and Objectives Identify and evaluate approach(es) for implementing a safe, ubiquitous, faster payments capability in the United States Represent views on future needs for a safe, ubiquitous faster payments solution Assess alternative approach(es) for faster payment capabilities Address other issues deemed important to the successful development of effective approaches 2015 Federal Reserve Banks. Materials are not to be used without consent. 47

Secure Payments Task Force March 2-3, 2016 Faster Payments Initiative Task Force Key Deliverables Decision Making Framework Phase 1 Completed in August Glossary of Terms Phase 1 Completed in September Effectiveness Criteria Phase 1 Complete Proposal Assessment Process Phase 2 In-Progress Final Work Product Deliverables Phase 3 In-Progress 2015 Federal Reserve Banks. Materials are not to be used without consent. 48

Secure Payments Task Force March 2-3, 2016 Faster Payments Initiative Task Force High-Level Work Plan and Timeline PHASE 1 May - Dec 2015 Development of process and criteria for identifying and evaluating approaches PHASE 2 Most of 2016 Iterative development and assessment of solution proposals PHASE 3 Complete Early 2017 Publication of assessment results Plan the work Do the work Document the work... 2015 Federal Reserve Banks. Materials are not to be used without consent. 49

Secure Payments Task Force March 2-3, 2016 Work Plan Summary: Baseline (1 of 2) High-level milestones and key activities outlined are subject to change but the following will serve as the baseline to assess program progress and timeline achievement Milestones End Date Phase 1: Plan Develop Community Engagement Plan Complete QIAT Approach Approved Complete Governance Model Complete Complete Capability Showcase Design Complete Complete Collaboration Tool Launched Complete Effectiveness Criteria Approved Complete Revised Participation Agreement Complete Feb 16 Proposer / Fed Engagement Approach Feb 16 Proposal Template Complete Mar 16 QIAT Selected Through RFP Process Mar 16 Program Work Plan Draft 1 Complete Complete Program Work Plan Draft 2 Complete Complete Program Work Plan Final Complete Today 2015 2016 2017 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun QIAT Selected Duration of phase Duration of major activities Activity has no set duration Milestones 50

Secure Payments Task Force March 2-3, 2016 Work Plan Summary: Baseline (2 of 2) High-level milestones and key activities outlined are subject to change but the following will serve as the baseline to assess program progress and timeline achievement Today 2015 2016 2017 Milestones End Date Phase 2: Execute Initial Intent to Propose Survey Complete Capability Showcase Portal Open Complete Hold Showcase Office Hours Feb 16 Final Paper Structure Outline Feb 16 Revised Participation Agreement Signed Mar 16 QIAT Process Design Complete Mar 16 Proposal Development and Submission Apr 16 QIAT Proposal Review and Q&A with Proposers Jun 16 Withdrawal Opportunity Before TF Review Jun 16 QIAT Assessment Draft 1 Complete Jul 16 FPTF Review, Discovery, & Comment Complete Sept 16 Proposer Responds to FPTF Comment Complete Oct 16 Final Proposer Withdrawal Opportunity Oct 16 QIAT Assessment of Each Proposal Complete Nov 16 QIAT Aggregate Analysis Complete Nov 16 Phase 3: Results Develop Final Paper Nov 16 Produce Final Paper Draft 1 Dec 16 SC/TF/Fed Iterate on Final Paper Draft 1 Feb 17 Publish Final Paper (milestone) Mar 17 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun QIAT Review Draft 1 Complete for each proposal Assessments Final Analysis Final Duration of phase Duration of major activities Activity has no set duration Milestones 51

Secure Payments Task Force March 2-3, 2016 Faster Payments Initiative Work Plan: Phase 2 Milestones In-Progress In-Progress Millstones/Activities Status (Date) Proposer/ Fed Engagement Approach Feb 16 Capability Showcase Office Hours Feb 16 Proposal Template Mar 16 QIAT Selected Mar 16 Revised Participation Agreement Signed Mar 16 QIAT Process Finalized Mar 16 Proposal Development and Submission Apr 16 Complete On-track Challenged At-risk 52

Faster Payments Effectiveness Criteria A Total of 248 Votes were Cast Friday, December 4, through Thursday, December 17 Achieved Overall Participation Rate of 77% Small Financial Institutions 86% Other Industry Segments 72% Non-Bank Providers 78% Medium Financial Institutions 82% Large Financial Institutions 70% Government-End User 50% Consumer Interest Organizations 88% Business End Users 77% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 53

Faster Payments Effectiveness Criteria Task Force Participants Consented to Approve Draft 5 of the Effectiveness Criteria Overall Consent Rate Overall Stand Aside Rate 97% 230/236 [Consent / (Consent + Object)] 5% 12/248 [(Stand Aside) / (Consent + Object + Stand Aside)] Small Financial Institutions 100% Other Industry Segments 99% 1% 5% Non-Bank Providers 100% 6% Medium Financial Institutions 100% Large Financial Institutions 100% 14% Government-End User 100% Consumer Interest Organizations 100% 29% Business End Users 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Final Vote - % Consent Final Vote (% Object) Final Vote (% Stand Aside) 54

Faster Payments Effectiveness Criteria The final Effectiveness Criteria was published on FedPaymentsImprovement.org on February 2, 2016 The Effectiveness Criteria will serve two important purposes: A description of stakeholder needs that can be used to assess faster payments solutions by the Faster Payments Task Force. A guide to payments solution developers on the desired attributes of future payment systems and a framework by which payments stakeholders can assess market offerings. 55

Faster Payments Capability Showcase Dan Gonzalez 56

Objectives Capability Showcase Background 1. Establish a forum where providers can showcase capabilities that could support faster payments solutions 2. Foster opportunities for providers to link capabilities to potentially create a proposal 3. Highlight providers areas of expertise in support of faster payments solutions to inform the task force as proposals develop Strong desire by task force members for a public capability Where submitters and viewers can be non-task force members, While still offering submitters a separate portal that is still semi private, and All submitters would have a choice on where videos/profiles are displayed (either publicly or privately) At the September in-person meeting 64% of the task force said anyone should be able to showcase 58% suggested an in-person meeting as a possible venue 2015 Federal Reserve Banks. Materials are not to be used without consent. 57

Secure Payments Task Force March 2-3, 2016 Capability Showcase Credentialed Portal in Knowledge Central Launched January 19 Accessible to task force members and members of the general public who elect to submit a capability (post credentialing process) All submissions reviewed by Federal Reserve before being published to ensure adherence to showcase user terms and guidelines Submitters can elect to post their capability submission in the Capability Showcase public YouTube channel as well 26 Capability Showcase submissions to date 58

Secure Payments Task Force March 2-3, 2016 Capability Showcase Public YouTube Channel Via FedPaymentsImprovement.org Launched January 19 Accessible to members of the general public Inclusive only of those submitters elected to be published publically No comments allowed on videos 22 Public Capability Showcase submissions thus far 59

josh@651media.com josh@651media.com Secure Payments Task Force March 2-3, 2016 Faster Payments Capability Showcase Completed Steps and Results Completed Tactics of Capability Showcase: Promotional Campaign Phase One October 2015 through January 2016 Pre-Showcase, intent to submit Promotional Campaign Phase Two January and February 2016 Promoted opening of the showcase Communicated user agreements, terms and guidelines as well as Office Hours opportunity Office Hours February 25 and 26 2016 Aligned with Faster Payments Task Force meeting 24 participants Task force members are encouraged to follow @FedPayImprove and re-tweet promotion of showcase and direct stakeholders to FedPaymentsImprovement.org for blog and webpage 60

Secure Payments Task Force March 2-3, 2016 Capability Showcase Live Demo Knowledge Central Faster Payments Capability Showcase 61

Faster Payments Task Force Qualified Independent Assessment Team (QIAT) Process Sean Rodriguez 62

Secure Payments Task Force March 2-3, 2016 Qualified Independent Assessment Team (QIAT) Deliverables The planned QIAT deliverables are not only designed to execute the proposal assessment process but also accelerate the development of the final paper focused on gaps, opportunities, and implications. We are currently engaged in the selection process for a firm to act as the QIAT and expect that process to conclude March. QIAT Deliverables (as outlined in the RFP) Delivery Date #1 Fully defined QIAT process April 2016 #2 Preliminary assessment for each proposal August 2016 #3 Final assessment for each proposal November 2016 #4 Report of the fully assessed proposals, including FPTF and Proposer responses November 2016 #5 Report of remaining strategic issues or gaps yet to be addressed for successful implementation and adoption of faster payments [optional work] February 2017 63

Secure Payments Task Force March 2-3, 2016 Faster Payments QIAT Process Development Approach The QIAT proposal assessment process is scheduled to be finalized by the selected QIAT; timeline constraints highlighted a need to accelerate the QIAT process development To meet truncated timelines and accelerate the process; a high-level QIAT process has been designed The objective of the high-level QIAT process is to define the QIAT process at a sufficient level detail, enabling acceleration of design efforts, while still allowing the selected QIAT to further define and add perspectives into the process Once onboard in March, the selected QIAT will be responsible for finalizing the QIAT process prior to the receipt of proposal submissions (4/1-4/15) A QIAT TF Advisory Group is to be established and will provide oversight throughout the duration of the QIAT process planning, design, and execution (to be discussed on subsequent slides) 64

L1 L0 Secure Payments Task Force March 2-3, 2016 Faster Payments QIAT Process Overview The high-level QIAT process steps are outlined below and the four L1 level process flows have been defined: Plan for QIAT Intake Proposals Review Proposals Assess Proposals Q4 15 Q1 16 Q1 16 Q2 16 Q2 16 Q3 16 Q4 16 Design and approve initial and formal intent to propose surveys Execute Initial Intent to propose survey Communicate proposal submission date and template Communicate QIAT process and interaction guidelines Ongoing Fed oversight and coordination of QIAT execution Review, triage, and disburse proposals to QIAT members Produce assessments by Criteria categories and across Criteria as an end-to-end assessment (Draft 1) - each proposal Define guidelines, requirements to propose Accept proposal submissions (logging, verification) Execute QIAT review and discovery process Draft 1 Reviewed by FPTF each proposal Execute second Intent to propose survey QIAT finalizes proposal assessments based on FPTF review/feedback each proposal Design and execute QIAT RFP Produce aggregate analysis on strengths and weaknesses across proposals Onboard and Train QIAT Modify QIAT process based on volume, first proposal (pilot), etc. Finalize QIAT Process Note: The selected QIAT will be responsible for building out and defining the detailed QIAT process flows based on the initial QIAT process design efforts 65

Secure Payments Task Force March 2-3, 2016 Faster Payments QIAT Process Advisory Group Proposed Description and Objectives The selected QIAT firm will manage, finalize, and execute the QIAT process. There is a need for a TF led QIAT Advisory Group. The following outlines the proposed structure for discussion: Description Objectives A subset of Faster and Secure Steering Committee members responsible for providing oversight and counsel to the QIAT in order to promote an unbiased, independent, and qualified proposal assessment process. The QIAT AG is not a decision making body. Promote a consistent, unbiased, and objective QIAT proposal in-take, review and assessment process Provide a voice on behalf of the Task Force to guide the QIAT proposal assessment process design and execution Promote transparency in the proposal assessment process Support consistent assessment of proposals against the approved Effectiveness Criteria Provide a channel for proposers, QIAT, and the Task Force to raise issues regarding the proposal assessment process and its execution Escalate concerns regarding the QIAT s independence and qualifications as needed Proactively identify, address, and/ or escalate issues that arise in the proposal assessment process to the Faster Payments Steering Committee, as appropriate Advise that QIAT deliverables are comprehensive and understandable prior to submission to the Task Force Represent to the Task Force whether or not the objectives of the proposal assessment process were achieved 66

Secure Payments Task Force Structure March 2-3, 2016 Qualified Independent Assessment Team (QIAT) Advisory Group Structure & Milestones A non-proposing representative from each of the 8 segments (if possible) Representatives will be selected from the Faster and Secure Steering Committees Two Secure Task Force Steering Committee members will be included Facilitation and administration resources will be provided by the FRB The QIAT AG will be chaired by a Faster Steering Committee member serving on the AG Milestones QIAT AG membership established/announced QIAT firm selected and onboarded QIAT firm and Advisory Group f-2-f meeting Proposal submission window open Proposal review and discovery between QIAT and proposer Proposer withdrawal opportunity, prior to TF review TF review of proposal assessments commentary period Proposer withdrawal opportunity, prior to public release Report of the fully assessed proposals, including FPTF and Proposer responses complete Date(s) 2/25 3/9 TBD 4/1 4/15 4/15 7/7 8/9 8/10 10/4 TBD 11/29 67

Qualified Independent Assessment Team Advisory Group Christina Tetreault (Chair) Gary Stein Tom Rea John Drechny Jim Reuter Wanda Chambers Jan Estep Mark Keeling Trent Addington (Secure TF) Stephen Mott (Secure TF) Kassi Quimby (Coordinator) 68

SPTF/FPTF Interaction Plan Updates Todd Aadland 69

CRITERIA Secure Payments Task Force March 2-3, 2016 Capabilities Phase (#2): FPTF and SPTF members are invited to participate in capability showcase with an interactive component portal to demonstrate existing and/or viable components to other proposers. For example, SPTF might have a security component to showcase FPTF and SPTF have the opportunity to informally provide feedback to capability providers SPTF/FPTF Interaction Plan Proposal Submission/Assessment Phase (#4): FPTF and SPTF will review QIA assessments and submit questions and comments to proposers for consideration during iteration/refinement stage. SPTF comments will be specific to the security aspect of proposals Finalized December 2015 Intent to submit due Full proposal due Draft 1 of QIA with proposer comments (proposers might opt out here) (proposers might opt out here) Full proposal due Final report Define criteria Capability Showcase Intent to submit Proposal development QIA review FPTF and SPTF comments Revised proposal Final assessment Planning Phase (#1): FPTF develops criteria; SPTF members and the Security Criteria work group provide input to security criteria FPSC and SPSC provide input into the QIA process Proposal Work Groups and full proposal development (#3): FPTF and SPTF members will have the opportunity to be invited to join work groups with other component providers by firms developing full proposals for a complete end-to-end Faster Payments Solution Final Work Product (#5): FPTF and SPTF review and comment on the FWP to identify and recommend ways to address strategic issues and/or barriers to implementing a Safe, Ubiquitous, and Faster Payments capability 70

SPTF/FPTF Interaction Plan Interaction Feedback from Secure Payments Task Force Meeting November 9-10 Launched Capability Showcase in collaboration site to support interactive feedback tools Hosted our first Joint Faster and Secure Task Force Steering Committee Meeting in January 2016 Added two members of the Secure Payments Task Force Steering Committee to the Qualified Independent Assessment (QIAT) Team as advisory liaisons Confirmed that the Secure Payments Task Force will provide input on all security related components of the full solution proposals Working to determine how the feedback loops will function between Faster and Secure during the proposal assessment phase and final work product phase 71

Day 1 Working Sessions Report Out Panel Todd Aadland Stephen Mott, Nancy O Malley and Glen Ulrich 72

Decision-Making Framework Ed O Neill 73

Decision-Making Framework Purpose Implement a structure for the Secure Payments Task Force to generate support for and approval of key Task Force processes, initiatives and work products Important to put in place as we continue to launch work groups and move forward with the development of key deliverables 74

Decision-Making Framework Objectives and Agenda Objective Provide an overview of the draft Secure Payments Task Force Decision-Making Framework Agenda Scope of the Decision-Making Framework Step 1: Origination of decision proposal Step 2: Review of decision proposal Step 3: Call for consent Step 4: Approve or withdraw the decision proposal Examples 75

Decision-Making Framework Intended Scope In Scope: Key Secure Payments Task Force processes, initiatives and work products ( decision proposals ) requiring super majority consensus Examples include: Decision-Making Framework Work products and deliverables produced by Task Force work groups Any other items the Task Force Chair believes would benefit from the Decision-Making Framework Out of Scope: Routine, administrative or other items as decided by the Task Force Chair Examples include: Sanctioning of a new Task Force work group or support team Selection of work group chair/vice-chair or support team lead 76

Decision-Making Framework Step 1: Origination of decision proposal. Task Force (TF) Chair, Steering Committee, Task Force makes proposal 77

Decision-Making Framework Step 2: Review of decision proposal The Task Force Chair will determine if the proposal is in scope for this framework Revisions may be requested prior to submitting proposal to the Task Force TF Chair: Need supermajority? Yes Proposal revised (if needed) and finalized No Subject to alternate decision rule Fully developed proposals will be shared with the Task Force for feedback No TF Chair: Proposal fully developed? Yes Task Force review and feedback Feedback from the Task Force will be reviewed and considered in the final proposal drafted for consent No TF Chair: Proposal ready for call for consent? Yes 78

Decision-Making Framework Step 3: Call for consent Task Force Chair submits decision proposal to Task Force Task Force votes Consent: Agree to proceed Stand Aside: Neither Consent nor Object Object: Do not accept proposal; must declare concerns and provide alternatives Voting results will be reviewed across the entire Task Force as well as the stakeholder segments and will be made public 1 Task Force votes on decision proposal Task Force approves proposal? 1 Results will be posted on fedpaymentsimprovement.org 79

Decision-Making Framework Step 4: Approve or Withdraw To be approved, proposals require consent from: Proposal revised (if needed) and finalized >67% of voting Task Force members; and, >50% of voting Task Force members in all participating stakeholder segments less one No Task Force approves? Yes Consent rate does not include Stand Asides and members that do not vote ( no response ) Yes TF Chair wants to amend proposal? TF Chair wants broader support? Yes No No Task Force Chair may request revisions to proposal based on results Withdraw proposal Approve proposal 80

Decision-Making Framework Examples (sample data) 71% of all Task Force members participated in the vote and the decision proposal received an 87% consent rate as well as majority consent from 5 of the 6 participating stakeholder segments indicating Task Force approval A B C D E F G H I Voting Segment # Members # No Response # Consent # Object # Stand Aside Participation Rate [(C+D+E) / A] Consent Rate [C / (C + D)] Object Rate [D / (C + D)] Stand Aside Rate [E / (C + D + E)] Business End-User 6 6 0 0 0 N/A N/A N/A N/A Consumer Interest Organization 3 0 1 0 2 100% 100% 0% 67% Government End-User 2 2 0 0 0 N/A N/A N/A N/A Large Financial Institution 15 5 4 6 0 67% 40% 60% 0% Medium Financial Institution 22 8 13 1 0 64% 93% 7% 0% Non-Bank Provider 61 15 40 3 3 75% 93% 7% 7% Other Stakeholders 57 12 35 6 4 79% 85% 15% 9% Small Financial Institution 21 6 12 0 3 71% 100% 0% 20% Total 187 54 105 16 12 71% 87% 13% 9% Note: "N/A" indicates there were not any task force members within this segment participating in this vote. Task Force super majority requirement: Did a super majority of participating Task Force members consent (Total Consent Rate greater than 67%) Majority consent from participating segment requirement: Total number of participating segments (segments with at least one "Consent" or "Object" vote) # of participating segments with majority consent ("50% + 1" or greater) Did a minimum of all participating segments less one have a majority consent rate? Task Force Outcome Yes 6 5 Yes Approve 81

Decision-Making Framework Examples (sample data) 74% of all Task Force members participated in the vote and the decision proposal received an 89% consent rate; however, majority consent was only obtained from 5 of the 7 participating stakeholder segments indicating the Task Force is not ready to approve A B C D E F G H I Voting Segment # Members # No Response # Consent # Object # Stand Aside Participation Rate [(C+D+E) / A] Consent Rate [C / (C + D)] Object Rate [D / (C + D)] Stand Aside Rate [E / (C + D + E)] Business End-User 6 6 0 0 0 N/A N/A N/A N/A Consumer Interest Organization 3 1 1 1 0 67% 50% 50% 0% Government End-User 2 0 0 1 1 100% 0% 100% 50% Large Financial Institution 15 0 6 4 5 100% 60% 40% 33% Medium Financial Institution 22 8 13 1 0 64% 93% 7% 0% Non-Bank Provider 61 15 40 3 3 75% 93% 7% 7% Other Stakeholders 57 12 38 4 3 79% 90% 10% 7% Small Financial Institution 21 6 12 0 3 71% 100% 0% 20% Total 187 48 110 14 15 74% 89% 11% 11% Note: "N/A" indicates there were not any task force members within this segment participating in this vote. Task Force super majority requirement: Did a super majority of participating Task Force members consent (Total Consent Rate greater than 67%) Majority consent from participating segment requirement: Total number of participating segments (segments with at least one "Consent" or "Object" vote) # of participating segments with majority consent ("50% + 1" or greater) Did a minimum of all participating segments less one have a majority consent rate? Task Force Outcome Yes 7 5 No Withdraw 82

Decision-Making Framework Working Session by Segment Task Force will meet with their segments to provide input Convene in general session room to leverage polling software to get a pulse on next steps 83

Polling Question 84

Closing Comments and Wrap Up Todd Aadland 85

Polling Question 86