A collection of observations, ruminations, predictions and random thoughts from Cornerstone Advisors.

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January 28, 2015 by Steve Williams Steve Williams

We Will Never Get to the Omni Promised Land

Banking today is one tough contact sport. Finding revenue growth, driving efficiencies, integrating mergers and improving the customer experience are all activities full of toil and thousands of execution details. Unfortunately, alongside the real gritty world of banking, our industry regularly creates buzzwords designed to bring a new sense of optimism and future promises of a land where managing a bank won’t be so damn stressful.

For the past two years, our industry’s favorite word has been omnichannel. Say that three times fast!

Omnichannel is everywhere in the trade press, blogosphere and vendor brochures. The snap, crackle and pop of this buzzword are evident in the rapid growth of web searches illustrated by Google Trends.


In a nutshell, omnichannel is defined by Search CIO as “a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store.” For a rapidly aging banker like me, “omnichannel” is just an idea designed to opiate our minds into thinking the complex, hard work of bank technology is easy.

150128bWhen a term like omnichannel emerges, the PowerPoints begin to crank up that illustrate breathtaking future visions of a seamlessly integrated technology environment. All of these slide decks show things like data warehouses, middleware and “enterprise buses” in the center of the page, promising that voilà! – a complete technology mess can be run through a blender to create the perfect customer experience. Bank executives have sat through thousands of presentations in the past 15 years hoping that their techies were serious about the promise of seamless integration. In many large banks, there are enterprise architects who spend most of their time going to meetings inside their organizations to share their wondrous future visions.

Here’s the rub, Gonzobankers. The blind hope in one technical solution is mostly a waste of time. Architecture and middleware are tools to help manage and improve the information technology environment, but their ability to create miracles is heavily oversold. One of the healthiest things bank executives can do is recognize that the promised land of seamless integration will likely never come in their careers. One of the greatest improvements in bank management would come if the sheer complexity of a bank IT environment was appreciated by those at the top. No matter what technology is employed, a totally seamless technology world will never be fully realized for the following reasons:

  • Technology changes quickly, and banks simply cannot change out systems as fast as technology evolves. The contemporary tools and technical specifications of today will be considered legacy five years from now.
  • Banks rely on hundreds of vendors that have no ability or interest in coordinating their technology architectures. The sheer complexity created by this diverse vendor environment is monumental.
  • Banks consistently overinvest in applications and underinvest in integration. It’s easy for executives to see a shiny new banking application and say, “Buy it!” It’s harder to direct resources toward the glue that holds the shiny banking toys together.
  • Constant regulatory compliance changes drown out resources in application development and often constrain just how the customer experience can be designed.

Today, chief information officers wake up every morning and do battle with dozens of critical applications that require updates, patches, error resolution and enhancements. With the resources tight, each day for the techie team is primarily a firefight, and there is little time to work on big picture integration tasks. In the name of career preservation, most technology groups resort to sharing an “omni” PowerPoint with their executives that will promise a future land of technology milk and honey. At least it buys them more time to fight more fires.

Embracing a Realistic Vision

My intent in blowing up the omni myth is not to depress bankers. Rather, I would encourage bank executives to change the way we think about and manage integration processes inside banks. Winners in the future will stop thinking of technology integration as a destination and more as a critical strategic process inside their organizations. Just as asset liability management is a daily process that never produces the perfect static balance sheet and investment portfolio, business integration must be an active and adequately resourced process inside the bank of the future.

Best practice banks will have the following key components to their business integration strategy:

  • A pragmatic future systems road map - Every bank should have a three-year plan that illustrates what application enhancements, replacements and integration initiatives require focus and resources. This process helps to coordinate vendor selections across business areas and provides opportunity to reduce complexity in the application environment.
  • Strong architectural standards for new system purchases - While technology standards change often, it is still important for a bank to enforce a requirement that vendors deliver solutions according to the bank’s technical specifications.
  • Heavy pressure on vendors to deliver integration capabilities - Banks are simply too passive in accepting empty promises from vendors about integration. CIOs need to become integration bulldogs, consistently putting pressures on vendors to deliver interfaces that use open web services frameworks and provide well-documented tool kits that allow for bank staff to integrate systems themselves. It’s amazing how slow these tools have progressed among the major core vendors over the past decade without invoking a riot among their user bases.
  • A dedicated business integration team – Banks often try to work on systems integration with part-time programming and database resources. Poor Jared and Zack in the basement group are working on database reports, intranet pages and a bit of programing between an ancillary system and the core system. Instead of this scarcity approach, banks need to staff their integration groups with a SWAT team consisting of a system architect, a database administrator, interface developers and business analysts. This group becomes a valued focal point for making systems “talk to each other” to create a more user friendly customer experience. Just as banks are building dedicated business intelligence teams, it’s time for further investment in business integration teams.
  • 150128cAn organizational focus on “Design Thinking” -  Sometimes in the rush to implement new channel and system capabilities, banks move with a “ready, fire, aim” approach. New web and mobile applications are often rolled out that are just plain clunky. In a world of slick Amazon and Uber interfaces, bank customers are saying “ho hum” to most self service capabilities. Industries outside of banking like software, retailing and consumer appliances spend a huge amount of resources and talent on designing long before the product is rolled out.Without getting too theoretical and cute, banks can bring design training to technology and business teams to enforce a better discipline in sweating all the tough details on new customer experiences. For a good crash course on design thinking, check out this great free offering from Stanford University.

Fight the Good Fight

The true Gonzobankers in our industry realize that buzzwords like omnichannel and promises of godlike tools such as middleware and enterprise service buses cannot address the complexity of our business alone. There is no technical panacea. The way forward to a more integrated customer experience is to get busy with pragmatic planning, frontal vendor management and the dedication of a talented SWAT team with a keen eye for design and detail. Those that stop thinking of omnichannel as an endpoint and instead focus on integration as a strategic skill set will find the real payoff in multimillion dollar technology and channel investments.

Time to turn ‘omnichannel’ thinking on its head.

A bank’s technology solutions play a major role in its growth and success. If your institution has been drinking the Omnichannel Kool-Aid, now is a good time for a Technology Assessment from Cornerstone Advisors.

Cornerstone’s Technology Assessment can help you determine if your systems and processes are supporting the organization’s strategic goals. We can help you stay competitive – and leave Omnichannel Lala Land in the rear-view mirror.

Contact Cornerstone Advisors today to learn more.



Filed under: Tags: ,
Commercial Banking, Information Technology, Retail Banking, Vendor Buzz, Web & Mobile Banking

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January 19, 2015 by Brian Hagan Brian Hagan

The Mobile Banking Triple Play

150119bCable and telecommunications companies are masters of marketing when it comes to selling their services to customers. The seemingly ubiquitous “triple play” is a clever and often convincing tactic to get us to bundle a bunch of services from a bunch of companies under one umbrella. The pitch, so to speak, is that if we pay for all these different services through one provider, the total cost is less than if we were to buy separate services from separate providers. In theory and, more often than not, in practice, this is true, but the end result is sometimes a mega dose of sticker shock followed by an enthusiastic, spittle-exchanging dispute over the play at home plate.

I’ve seen this gut-wrenching, wallet-clutching reaction in the mobile banking world, where community banks are learning the hard way that the best cure for triple-play sticker shock is careful management.

It is no surprise that mobile banking is used most often by younger and higher-income consumers, the same demographic most financial institutions are attempting to attract to their institutions. To be competitive, community banks are discovering that they need to provide e-banking access via the triple-delivery channels of PC, mobile phone and tablet. As FIs add delivery channels, vendors add expense. This is true whether the platforms are running in an in-house or outsourced environment. Most vendors have added mobile and tablet to the backbone of their base Internet or e-banking platforms, so customers typically have to start with the base product even if they don’t want to offer access via a PC.

The historical methodology of charging for e-banking by the major core vendors has been on a per-user basis, which is where FIs can incur significant cost increases as they add mobile and/or tablet channels. The use of cell phones and tablets to access financial and other information is rapidly expanding, and customers are expecting their financial institutions to provide competitive channel experiences.

When a customer accesses the bank with his phone or tablet, the vendor typically charges the bank a per-user fee for the app to be resident on the customer’s device. Banks need to conduct a thorough business plan before implementing mobile or tablet delivery channels. If penetration is high, the per-user fees can add up quickly. There are other significant areas for due diligence that can assist in managing ongoing expense since not all mobile applications are created equal. It is imperative that banks determine how they will be charged. If it is on a per-user basis, is there a way to easily delete customers who have downloaded the app but are not using it? Is there a lower fee for inactive users? Banks should ask their vendors how inactive users are identified and what process the vendor users to segregate them for billing purposes or for potential deletion from the product/system. Unfortunately, it is not uncommon for banks to pay for a high percentage of users that are not actually using the application but have merely downloaded it.

So how can banks manage the expense and drive per-user costs down? In many instances a bank has a long-term contract with an Internet banking provider, but it is not always necessary to procure mobile and tablet through that same provider. There certainly can be advantages to going all-in with one vendor, and banks that want to go this route should first conduct a careful evaluation of the vendor’s products and perform a thorough cost/benefit analysis.

A number of non-core vendors have emerged in the e-banking marketplace. These vendors have products and services that can be used in conjunction with other processors for core and other services. These non-core vendors may be more flexible in meeting the needs of clients, and banks should at least conduct an inquiry to evaluate alternative, non-core provider products and services. Depending on where an institution is in the term of its current e-banking contract, it might be worthwhile to delay signing on for a triple play until after taking a look at competitive e-banking components.

150119aWhile the mobile and tablet market offers plenty of opportunity for attracting younger customers who may turn into long-term customers, it is important for banks to weigh the rewards of having these customers against the cost of acquiring and maintaining them. A thorough investigation of the products and costs of potential providers can serve as valuable leverage during negotiations.

A triple play, when managed correctly, can help grow and maintain a bank’s customer base without excessive costs. A best practice banker will arm himself with the diligence necessary to make his triple play a defensive strategy and not a tripling of expenses.

Have You Experienced Technology Sticker Shock?

Cornerstone Advisors has helped hundreds of financial institutions negotiate contracts with their Telecom, Internet Banking, Core, Bill Pay, Debit and Credit Card Processing, EFT and Ancillary systems vendors.

We can ensure you the best possible pricing and terms. Contact us today to learn more.

Cornerstone Advisors

Filed under: Cards & Payments, Retail Banking, Web & Mobile Banking

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December 22, 2014 by Gonzo

The 2014 GonzoBanker Awards

GBguyGonzoBankers, the moment we know you have all been waiting for has arrived. It’s time for the 2014 GonzoBanker Awards! We could hand you a load of bull about skewering the guilty and praising the exalted, etc., etc., but let’s just dive into it!


GonzoBanker of the Year – We have to give this to Banc of California CEO Steven A. Sugarman. It’s been a busy year integrating recent acquisitions, purchasing $1 billion+ in Banco Popular deposits, hiring former Los Angeles Mayor Antonio Villaraigosa to advise on community relations, and having former President Bill Clinton speak at a major financial literacy event. Banc of California went from $900 million in total assets five years ago to nearly $5 billion today.

Bank Acquisition of the Year - BB&T Corp. takes Susquehanna Bancshares Inc. The pickup of 240 branches for BB&T gets this acquisitive company into the Northeast. Nice community bank culture fit between the two as well.

Bank Merger of the Year – California United Bank and 1st Enterprise Bank in Los Angeles. A great merger of equals among two commercially focused institutions that have experienced strong relationship growth during tough times in Southern California, proving that the basics of relationship banking are still alive and well.

The Quiet Pervasiveness Award – Goes to financial education programs. We are seeing it show up lots of places, it’s real and it’s great for this industry. With so much buzz around mobile apps with budget bubbles and alerts that only a small group of consumers ever download and try, it’s great to hear about shops like $3B Tinker Federal Credit Union, which has quietly grown to provide financial education to 20,000 people a year.

141222aRise of the Analytics Organization in a Dog-Eat-Dog World – Brush off your resumes Gonzoanalysts, at our client roundtables we heard about analytics organizations being formed and analysts and managers being hired to head them. At one of the major conferences this year, a vendor touting the need for dedicated chief data officers at banks had a write-in audience poll on who was filling that role currently. “Dog” was listed as frequently as any CDO in the responses.

The “How Twitter Can Advance Your Career” Award – Bradley Leimer. A keen industry mind who banks the highest tweets-per-minute ratio of anyone out there, Bradley departed his VP digital strategy position at California’s $3B Mechanics Bank to be North American head of innovation for $77B and Top 20 worldwide bank Santander. That’s one helluva move up. Buena suerte, Bradley!

The “If We Build It, Will They Come?” Award – In an interview with an EVP in a holding company headquartered in a rural area, discussing whether they should build out their I.T. and Operations center in a building they recently purchased as they look to double in size over the next five years:

Cornerstone: Do you think you should build out your I.T. and Ops center here in the building you purchase?

EVP: I definitely think we should build here as long as we can be assured that we can get the talent that we need long term.

Cornerstone: Okay, let me back up a second. Do you think you can get the talent in this small town that you need as you grow to over $10 billion?

EVP: Hell no.

Why Build What You Can Buy Award – With new disruptors putting pressure on the pace of innovation, this award goes to BBVA/Compass for its acquisition of Simple. The question is, what happened to the buzz once the deal was complete?



$4 billion dollars …

The Third Annual Matt Taibbi Too Big to Jail Award – While the Wall Street megabanks again had a banner year of screwing their customers and the markets, the six banks that were fined $4.3 billion for attempting to manipulate foreign exchange rates win this year’s Taibbi Award handily. Congratulations to Citi, JP Morgan, HSBC, UBS, RBS and Bank of America for truly separating yourselves from the pack. Interesting how these bankers are not prosecuted criminally for fear of “disrupting the financial markets,” yet they were caught actively trying to disrupt the financial markets in this case.




Retailer of the Year that Caused the Most Project Heartache in Bank I.T. Shops – Target. A slow, measured conversation and approach to EMV was in place. Then … the breach. Then … the conversation that we have to do something. Then … the push to accelerate the timetable to get to EMV. Which won’t solve the problem that caused the breach. And won’t address the biggest area of fraud growth, which is card-not-present. Makes you wish that everybody had paid with some damn cash money!

The Unsung Hero Award – To the security analysts and officers who actually discovered and escalated the breaches at Target, Home Depot and other institutions that have been hacked. One can only imagine the sense of panic that these guys felt upon discovering the breach and realizing they had to make the most difficult call in their careers.

The Technology Company that Caused the Most Project Heartache in Bank I.T. Shops – Apple and Apple Pay. We understand that use among early adopters is good and that this could be a long-term game changer. But, nobody had this on the 2015 list until … Apple announced Apple Pay. Then, everybody had to have it, particularly all of the customers who have an iPhone right now. Except that’s a majority of mostly nobody. But they are going to pay the merchants who are all ready and eager to take Apple Pay in 2015. A majority of which is … well, um … mostly nobody. So banks all rush to get in line to get Apple Pay installed with their available 2015 resources. Which is absolutely, positively nobody. But, as one bank executive said, “The cost and effort of this, even if adoption is slow, is of less importance to me than the negative customer perception I’ll get if we don’t do it.” Man, it must be nice to have that kind of clout.

141222cThe Bill Moyers “Johnny, we hardly knew ye” Award – Bitcoin’s short but brilliant and colorful life. The downfall of Bitcoin did to online narcotic sales what the decline of online porn availability would do to the Internet in general.

141222dThe Monty Python “I’m Not Dead Yet” Award – This one goes to the never-say-die branch hardware vendors that still dominate the halls of retail banking conferences nationwide. And who can blame them? We still have way more cash counters in the branches than we have iPads. We still have eight pens for every branch sig pad and four copy machines per driver’s license reader. Bring out your dead!

The Throes of Death Award – If personal financial management (PFM) continues to follow its recent trajectory, very soon we will never have to see a demo with a spinning budget chart EVER AGAIN.

The Big, Fat, Juicy App Award – MCX’s CurrenC app. The app is in the private pilot phase now with 10,000 downloads on the Google App Store (albeit with a one-star rating), with plans for regional and national rollouts in 2015. While MCX has been all hype to this point, we had better listen … but it won’t go anywhere until it stops asking for our friggin’ Social Security numbers!

Execution Matters Big-Time Award – Data warehouse. Doing this right is easier said than done. Beware of buzzwords and prepare to get gritty.

The “We Don’t Need No Stinkin’ Big Data Because Small Data Works Just Fine” Award – Loan pricing engines. We’re seeing growth and solid industry noise out there from niche providers like PrecisionLender in commercial and Optimal Blue in mortgage. They focus on one aspect of small data and stick to their knitting.

The First Annual Report on Progress Made by Mid-Size/Community Financial Institutions and Vendors to Get a Real, Viable Omnichannel Solution Working - Nothing to report. (Note: we worked through our gagging to get that word into this tome.)

Toxin of the Year (Make that Decade) Award – Lack of commercial automation at most banks. Beyond the six-pack-a-day Excel dependency in commercial lending, don’t forget the sticky note and file folder chasers, not to mention redundant data pummeled into a bruised doc engine. We are hearing horrifying turnaround times on loans. For most community institutions that put their stake in the ground around commercial and “great customer service,” it’s time for a gut check.

The “Wait, You Can Be a Laggard” Award – With all the buzz about virtual channels and shrinking branch footprints, why not go all the way? Hologram banking is coming to a branch near you. Not only lifelike, but the ability to have all your bankers look perfect all the time: great smiles, good eye contact and a nice (albeit somewhat limp) handshake. They might have a challenge accepting checks, but who cares? That’s what the interactive teller machines are for! Think of the expense savings … no human staff required. Then again, maybe not …

The Carbon Dated Award – Runners-up: Shared Drives, PST files, Pensions. Winner: Check Digit. In its heyday the check digit was used to keep proof operator keying mistakes from causing downstream process issues in the form of rejected and non-posted items. Today the check digit is the root cause of inefficient loan origination processes. Loan numbers are still managed with Excel spreadsheets and assigned at document prep time. Because we can’t get a loan number assigned early in the process we end up scanning loan files on the back end after we have handled the documents three times. We don’t proof items much anymore but we do data-enter that loan number with its check digit a bunch of times and never once calculate the check digit.

Title of Tomorrow Award – Chief Process Owner. By day the CPO is known as Silo-Buster, Change Agent .999999, Doctor Fix-It, as well as the ultimate hero moniker, Techno-Geek. By night the CPO is envisioning customer-focused processes that make us easy to do business with. Processes where the performers are educated and incented to deliver customer-focused results, not compliance-driven requirements. Processes where the ball is not handed off, so therefore it is not dropped. Processes where metrics are part of the process’s performance, not an Excel tally sheet. Find those CPOs. Don’t be fooled by that old Jedi mind trick: “These aren’t the droids you’re looking for.”


Bank Core Deal of the Year – FIS signs Umpqua to IBS. A nice pickup of a progressive client.

Credit Union Core Deal of the Year - It’s a tie. The Gonzo team originally named Fiserv for retaining the Space Coast Credit Union relationship with DNA. Space Coast is a hard-charging high performer that will make DNA better in the future. However, the Gonzo team missed a ground-breaking deal early in the year when San Diego based Corelation signed Phoenix-based powerhouse Desert Schools Federal Credit Union. All industry eyes will be on this implementation as Corelation founder John Landis and his team work to prove the system’s scalability into larger credit unions.

141222eThe Second Annual Rob Ford Award for Bad PR – In a story that generated one of the better headlines in the financial services industry, NCR blames Intuit data centers for the service outages in the Digital Insight online banking product. Note to NCR: If you buy a product with full knowledge that it is being hosted by the product’s former parent company, you really can’t in good faith blame them when things go south.

The Big Mo Award – Salesforce. Last year, we gave Salesforce the Big Buzz award and it moved well beyond that in 2014. Building on its acquisition of marketing app provider Exact Target and high profile deployment at Huntington Bank, Salesforce expanded aggressively into the midsize bank and large credit union markets in a mega way. Even if a big-bang CRM deployment is not your thing, lead and pipeline management is hotter than ever. It’s hard for us to recall a conversation about lead/pipeline management in 2014 where Salesforce’s name didn’t come up.

The 2015 Future Herd-Thinning Award – All of the “branch of the future” vendors who are touting location redesign, hardware and other infrastructure solutions for branches that are part, but not the big part, of the solution. There will be less of them to salute next year.

141222fThe Second Annual Vendor to Watch if You’re a Vendor Award – This goes to nimble Des Moines, Iowa-based startup CardByChoice. CBC’s product allows issuing banks to provide integrated cards and fobs for Apple Pay users who want the flexibility of Apple Pay but do not want to give up their cards.

The Father Time Award – This one goes to Yodlee: 15 years from start-up to IPO.

141222gGolden Cufflink Award:

For 2014, there is one of you that stood head and shoulders above the rest. This solutions consultant proved to be:

  • Unflappable, or better yet “Un-stump-able”: Handling curveball questions from prospective clients and consultants alike with ease. We heard from prospects that they particularly liked his ability to adjust his presentation based on the questions he was fielding. There was no set script.
  • A good listener: Allowing the client to finish asking a question before beginning his answer (many of you could take a lesson here).
  • Deeply knowledgeable: The depth and breadth of his product knowledge coupled with real world cases AND client references really increased his street cred with prospects.

Congratulations to Q2’s own Joe Cody.

Cross-Sale Attempt of the Year – To the solution consultant for attempting to sell his own, personal application development services business during the technology review portion of a system selection. We had to look up the definition of ballsy to make sure it was sufficient to describe this recklessly aggressive move. It sounded and felt worse than any creepy uncle ever has, and fell completely flat with the prospect, irreparably jading the overall impression of the product.

The Buttsmoochio Award for Employee Dedication
– Symitar’s Kristie Peterson takes the cake with her core-inspired vanity plates. Niiiice. (As of publication date, GonzoBanker could neither confirm nor deny rumors that Kristie has integrated Symitar’s “Find a Restaurant” PowerOn into her Jeep’s navigation system.)


Great Moments in System Demonstrations
  • A banker asks a sales rep about a pending lawsuit at the vendor regarding the product not working as promised. “I can’t really comment on that, but suffice it to say we are making sure that our clients perform better due diligence on us going forward.”
  • When asked what her company was going to do to improve consistently bad releases, the solution rep replied, “Well, for one thing, we’re only going to do one a year.”


141222iMiserable Acronym of the Year – CECL: the Current Expected Credit Loss impairment model. This bit of accounting vaporware for several years has commercial banks wondering how they will model and account for this. It’s just more paper and more assumptions without any more accuracy in the ultimate world of accounting.

Most Thrilling Moment of 2014 – This one was easy. Thanks to Slayer for entertaining the Gonzo team after our Audit Committee meetings last month. Rock powah!


GonzoBanker wants to thank all of our loyal clients and readers for a truly great 2014. Everyone – have a great holiday season and let’s get prepared to start 2015 like our asses are on fire!

-The Gonzo Team


Think of Cornerstone Advisors for all your consulting needs in the New Year.




Filed under: ???, Accounting & Finance, Best Practices, Branch Sales & Service, Call Center, Cards & Payments, Commercial Banking, Commercial Lending, Consumer Lending, Core Processing, Deposit Ops & Item Processing, HR & Training, Information Technology, Investment & Insurance, Loan Ops & Collections, Marketing, Mortgage Banking, Operations, Retail Banking, Risk Management, Small Business Banking, Strategy, Treasury Management, Vendor Buzz, Wealth Management, Web & Mobile Banking

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