Chart 78: What do you believe will be the structure of the payments industry in 5-7 years?

Chart 78: What do you believe will be the structure of the payments industry in 5-7 years? 80% 60% 40% 20% 0% Dominated by large Controlled by large Controlled bysavvy Dominated by dynamic incumbent payment incumbent institutions tech companies eco-system of savvy brands enable by innovative operating through tech companies tech companies traditional payments providers Source: BofA Merrill Lynch Global Research « Panelists highlighted that while recent innovations in faster payment transfers have been focused on P2P applications, the B2B opportunity is 7-10x larger. That said, panelists thought, based on experience in the UK, the cost of faster payments would likely have to be borne by the existing payment infrastructure as consumers have not been willing to pay for faster transfers. Additionally, panelists pointed out that in countries where faster payments have been implemented, it has mostly been a mandate by regulations suggesting the government has an important role to play. ¢ Panelists highlighted Security and Compliance as being essential for a new Fin Tech company to be admitted as part of the industry ecosystem. Incumbent payment companies will only partner with a new FinTech company that can meet the safety and regulatory standards that the incumbent is required to meet. none Advisors: Shedding Light on the Potential Opportunity Guest speakers in this panel included Eli Broverman (Co-Founder and President of Betterment), Randy Sternke (Vice President, Business Development at Alkanza), and Vaughn Bowman (Director, Managed Solutions Channel Management at BofAML). Each firm discussed the unique aspects of their individual business models and where they see the robo industry headed in the future. ¢ Broverman brought up several key points on how the independent robo advisor model came about and why it will continue to grow in the future. He believes that the main drivers include a lack of quality advice for investors with few assets, investors’ beliefs that financial institutions are not aligned with their interests or transparent, and the fact that people want financial services to work as well as the other technology in their lives. Broverman believes that the biggest opportunity going forward is in the mass affluent segment and the 401K space. « Alkanza is focused on providing robo capabilities to financial advisory firms through partnerships, rather than directly to consumers, with a focus on the platform as well as portfolio construction. « We surveyed the audience to gauge their views on the potential size of the robo advisor market and the most common answer was that assets will surpass $1T, followed by assets will hit S500B and then level out. Bankof America a 2016 Future of Financials Conference | 17 November 2016 53 Merrill Lynch HOUSE_OVERSIGHT_014367