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* Onamore cautious note, AXP said that Discount rate pressures are likely to remain elevated near-term as EU merchants renegotiate contracts post-interchange rules and the OptBlue program gains additional scale in the US. Strengthening in the USS will also lead to FX headwinds that will likely impact NT results, particularly from countries like Mexico where AXP has a large business. Conference Panels Top Takeaways Contact your BofA sales representative for additional information. Blockchain: Potential Transformation of Financial Markets With Blockchain one of the most talked about potential disruption in financial services and 71% polled noting that blockchain is a significant opportunity for financial service firms, we thought it was timely to host a panel on the potential impact of Blockchain on financial markets that included Co-founder & COO of R3 Todd McDonald and CEO of Axoni Greg Schvey. » Blockchain could lead to $60-80bn of annual potential cost savings for financial institutions. While it is still early days to know what the full impact of potential cost savings that blockchain technology could bring to financial institutions, the panelists believe that total savings could reach $60-80bn. ¢ Successful implementation of equity swaps. An area where Blockchain has shown to be successfully implemented is around equity swaps. Axoni had worked with multiple financial institutions to handle data reconciliation around its equity swaps record which drove efficiencies. « Trade finance viewed as most likely for success. When asked which part of the financial industry will be the first to successfully utilize blockchain technology, 38% of those polled cited trade finance/transaction banking as the most likely, with 28% citing capital markets & securities servicing. Chart 66: Which part of the financial industry do you believe will be the first to successfully utilize blockchain technology? 38% 40% 30% 20% 10% 0% Wholesale payments Trade Capital markets & Retail payments (cross-border F/X, fianance/transaction —_ securities servicing (parallel currency correspondent banking) banking (receivables (securities settlement, systems, remittances) finance, commodities asset documentation) trade finance) Source: BofA Merrill Lynch Global Research ¢ Implementation could be earlier than expected. While many investors are skeptical that blockchain will be broadly adopted in the near term, with none of the audience expecting it to be widely adopted within 12-24 months, the panelists were more optimistic and believes that there could be upside surprise in terms of the timing as proof points and implementation could happen more quickly than expected. BankofAmerica <2” 46 2016 Future of Financials Conference | 17 November 2016 Merrill Lynch HOUSE_OVERSIGHT_014360