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

Learn More

April 14, 2015 by Sam Kilmer Sam Kilmer

Welcome to New Marketing Muscle

What’s Your Offer?

Chase (as in, the megabank) came up in conversation at my recent family reunion. Two different family members (from different parts of the country) mentioned establishing new Chase relationships. Now, I know what you GonzoBankers must be thinking: Wow, consultants have the most interesting, heartwarming family dinner chat. Just to be clear, I didn’t bring it up. But I was listening. Not even a week later, I received a Chase offer for $450 to open a checking-with-savings ($300 for checking alone). Looking around online, the closest competing offers I found were $300 from a couple of regional banks, but none from community banks or credit unions.  I didn’t switch, but Chase did have my attention at $450. I also noticed online that OnDeck was alongside Wells Fargo and Bank of America in the Top 5 search rankings for business loans. OnDeck had slick, “no hurdles” branding on its web site with the promise of a business loan decision in minutes with same-day funding.

Welcome to new marketing muscle. Delivery of specific value is replacing the nebulous brand yarn. Four hundred and fifty dollars to move deposits and same-day business loan funding are concrete offers. Chase and OnDeck have something else in common: By design or not, their brand names imply speed. And, whether speed comes through helpful mobile alerts or fast loan decisions, it is an increasingly powerful definition of convenience.

Meanwhile, on highway billboard ads I’ve seen community banks duke it out over who is the oldest local bank with the happiest customers and employees. Driving through one town, I noticed branch signs from two different banks looking to win your business based solely on their number of anniversaries.

Who cares?

Seriously. Who cares how many years a bank has been gathering and lending money? Even if a few people care, aren’t there others who may prefer a bank that seems, well …. younger? If nothing else, maybe they want a bank that makes a concrete offer?

A quick look at big bank competitors like Chase and industry disruptors like OnDeck shows an unmistakable emphasis on technology and marketing. But, according to recent data gathered for The Cornerstone Performance Report, mid-size bank and credit union tech spending (as a % of assets) has grown incrementally at best.

One big cultural hurdle I’ve heard is that digital channels are thought of for service while branches are thought of for revenue generation. But, that’s starting to change. Consider that in a recent study by CFI Group, online improvements were 400% more impactful to increasing satisfaction than improvements to branch staff or branch convenience. Probably not a surprise to the 75% of the U.S. population now clenching smartphones.

Where’s your offer?

Another interesting trend for mid-size banks and credit unions is a marketing spend mix that hasn’t changed much to reflect a shift in impressions. Traditional media spending remains high while online channel marketing remains pretty low. More in common with the era of Mad Men’s Don Draper than Amazon’s Jeff Bezos or Apple’s Angela Ahrendts.

Now, the good news is there is clearly more emphasis on customer experience (both channel process and employee training). And, lead generation has focused more on analytics.  Still, it’s typically pretty light in the online and search areas that increasingly guide consumers.

Digital marketing is now established more than just emerging. Across all industries, digital ad revenues grew past print, outdoor and traditional radio years ago and will surpass those on television in three short years (eMarketer). Beyond Google’s paltry $60 billion in ads growing 17%, here’s some more growth out there:

Marketers are targeting consumers with digital because there is context closest to the buying cycle. And we are hearing some successes with it. One CFO, for example, recently reported 15% of his institution’s mortgage loan originations came directly from Zillow ads. As digital delivery and contact centers become the preferred service entry points, it’s important to understand the value for each channel and at each point in the ongoing engagement cycle: needs analysis, lead development, presentation, closing and fulfillment.

As community financial institutions compete against the Chases and OnDecks of the world, here are some brand questions worth asking in the boardroom:

  • Is our offer helpful and meaningful?
  • Is our offer reaching our target customers closest to their buying decisions?
  • Have we agreed on ways of measuring success and which approaches are working best?
  • Do we have the right talent and tools to drive revenue growth using digital?

Lastly, let’s not forget to ask how digital helps (and is helped by) other approaches. It’s probably no accident that my own journey here involved digital but started with traditional word-of-mouth and a direct mail offer.


Filed under: Best Practices, Branch Sales & Service, Consumer Lending, Marketing, Retail Banking, Strategy, Web & Mobile Banking

Print This Post Print This Post

April 2, 2015 by Joel Pruis Joel Pruis

Are You ‘Deal Ready’?

As a long time reader and first time contributor, I am excited to be a part of the Cornerstone Team and a GonzoBanker! My passionate goal as part of the Gonzo team is to shake up one of the remaining segments in lending that has yet to go through a significant transformation: Commercial Lending.

It is quite ironic that the business line that typically drives a disproportionate share of profits in mid-size and community banks has some of the most arcane and fragmented processes. As banks look to a new period of growth, it will be important to take a grenade to most existing commercial lending processes. Today, bankers find themselves in an environment where commercial loan growth is outstripping other type of loans. The environment is getting more heated, but once a quality borrower makes a request for a loan it seems everybody is making a bid. As a result, margins are razor thin for any new request and bankers don’t want to be the last minute Kmart Blue Light Special as a competitive strategy.

In such a fiercely competitive environment, GonzoBankers must:

  1. Protect and retain the bank’s existing customer base;
  2. Beat the streets and cast a wide net to get to know as many prospects as possible; and
  3. Be prepared to immediately “slide down the fire pole” once a new request comes in.

GonzoBankers need to ask themselves a brutal question: how deal ready is our organization? Our armed forces are always training in an effort to be “combat ready”; athletes are constantly practicing and training to be “game ready.” The question I have for commercial lenders is this: Are you ready to beat your competitors to a customer with a well analyzed, structured new deal?

The best way to understand what qualifies a bank as ‘‘deal ready” is to put forth the improbable but enviable scenario in which every single one of the bank’s clients and prospects makes a request for a new loan at the same time. After you have calmed yourself after the panic attack this scenario creates (or finished calculating your incentive pay), you have to ask yourself:

  • Do I have the information I need? Have I begun to organize information or will I be starting from scratch?
  • Will I be cramming all night to get this deal through our process or just reviewing what I have planned?
  • How would I prioritize my new and bursting pipeline?

Let’s review three criteria that make a deal-ready bank.

#1: Deal-Ready Banks Organize Information to Gain Speed

It is relatively easy for a bank to prioritize its existing client base. Clients can be ranked by risk rating, dollars outstanding, exceptions and financial covenants. But such ranking is set up to help with the existing credit relationship. Our scenario isn’t talking about existing credit but rather a new request for credit. New requests from an existing client still require the details around use of funds, overall repayment capacity, collateral coverage, industry outlook and the like. For existing clients, deal-ready banks have refreshed these items and can jump right into the credit write-up.

For prospects, the information requirements will typically be much larger but the scenario does pose the question, “Is there information that I could gather now that would make it easier to process a new request?” Bankers tend to go through the motions to make the appointments, meet with the prospects and generate the call memo but neglect the pursuit of information that could make the bank more responsive down the road. Obviously collecting information from a prospect is more difficult when there is no formal request, but just because it is difficult doesn’t mean it should be avoided. As a wise man with legs crossed on a hill once said, “If it were easy, everyone would be doing it and no one would be making any money at it.” The business owner needs to view a prospective banker as a trusted advisor with value to add if information is shared. GonzoBankers know how to demonstrate their expertise and knowledge in the industry; provide value during interaction with business owners and be constantly working to get the information needed to make prospect as deal-ready as possible.

#2: Deal-Ready Banks Don’t Cram – They Plan

Remembering back to high school and college, most students attended class, took notes, collected handouts and occasionally did the assignments. When it was exam time, these students loved to cram! They quickly re-read an assigned book, frantically looked over notes and hoped they had the information needed to properly study for the exam. Then there were others that gathered the same information but regularly reviewed the notes throughout the semester, did practice tests and the like. When exam time came for these students, the process was fairly smooth. They did a final review of the material and typically did much better on the exam than those that crammed.

Let’s assume a student has all the information he needs. Is he cramming or reviewing? What does the information you have collected look like?

Is it like this (cramming)?

Or this (reviewing)?

It’s important for bankers to ask if information about prospects has been reviewed and captured in a form that is either ready to go into a credit write-up or can be systematically imported into the final approval document. If a lender looks at collected information on a regular basis as pieces to the credit approval document, how would that change the way data is captured?

Bankers should change their approach from data gathering using the traditional call memos, pipeline reports and basic financial spreads to capturing the same information with an eye toward completing the credit approval document. For example, instead of a lender’s call memo containing a summary of what was covered during the meeting, it could contain the following:

  • Meeting attendees
  • Purpose of the meeting
  • Information collected (list of documents)
  • “Deal-Ready” Level

From this point a banker would capture the information in a format that supports the approval document. The discussion the banker had with the owner regarding the update to the business operations/background would turn into an update to the business background section in the approval document. New key employee? Add the key employee information to the management section of the approval document. New financial information? Add the narrative around the financial performance to the appropriate section of the approval document, have the analyst spread the financial statements and update the business debt service numbers. These types of habits allow a banker to capture information in a manner that would make the client/prospect more deal ready. The higher percentage of clients and prospects that are deal ready, the faster the banker can respond should the credit request stampede ever occur.

#3: Deal-Ready Banks Have Clear Methods of Prioritization

While bankers would obviously love to be able to approve, win and fund every single request that their clients/prospects make, the reality is that financial institutions often experience bubbles when the combination of new requests and renewal requirements overwhelm reasonable capacity. When this happens, bankers face the need to prioritize requests in a manner that allows them to maximize the benefit to both the banker and the financial institution he serves.

When I was a commercial lender at Bank One, we had a list of “Values in Commercial Lending.” Just like the Golden Rule is meant to be the universal rule in how to interact with others, the first value in the list was the universal one of “Soundness, Profitability and Growth, in that order.” Using this as our prioritization method, you can see how the more “deal ready” you are the better prepared you’ll be to properly prioritize the wave of opportunities that come your way.

The prioritization process should start much earlier than when a request is submitted by the borrower. As bankers continue to maintain each existing client or develop a prospect to be in a deal-ready state, you can be continually assessing and prioritizing by determining:

  1. Does this client/prospect still present an acceptable level of credit risk?
  2. Is the existing/proposed relationship sufficiently profitable?
  3. Does this existing/proposed relationship present an appropriate level of growth opportunities?

The tough part of this type of prioritization is when you find out that marquee business in your community is not the big relationship opportunity you really want. Whatever the reason, the more objective a bank is in this prioritization process, the better off it will be in its overall production results. Many banks use summary or “pre-flight” memos early in the loan process to quickly assess the potential of more gray area deals. This ensures precious credit resources are not being wasted on deals that don’t have a good chance making it to booking.

The economic engine is running in the United States but we as commercial lenders are still waiting for an expansion to take hold and start driving the demand for credit. While we wait, are you going to stay with the status quo or are you going to start to push to make your clients and prospects more deal ready?


Are your commercial lending practices costing you deals?

Is your only competitive advantage price? Are you chasing the same small group of commercial clients that every other bank is chasing?

Cornerstone Advisors can help you shake up commercial banking at your bank. Contact us today and we’ll talk.

Cornerstone Advisors



Filed under: Commercial Lending, Consumer Lending, Mortgage Banking

Print This Post Print This Post

February 25, 2015 by Scott Hodgins Scott Hodgins

VendorDirt: The Big 4 in 2015

In January a lifelong friend of mine married a super cool woman he met on a blind date. No Tinder, FarmersOnly, eHarmony, or ChristianMingle – just a good, old-fashioned love match arranged by a mutual friend. Ah… love. Makes you think of your core vendor, no?

Core vendors are kinda like a blind date. You envision a gorgeous, funny and smart mystery person, but really you just hope your date’s visible scabies scarring is minimal and that you don’t end up hog-tied in the back of a creepy panel van. We all have high hopes for our blind dates, but we have to be realistic, too.

So let’s take a look at what the Big 4 core vendors (FIS, Fiserv, Jack Henry and D+H) are doing and have to bring to the table in 2015 (other than a sweetheart deal).


Banks: With the triad of Premier, Signature and DNA, Fiserv has maybe the most well-rounded suite of core products out there for mid-size banks of varying delivery preferences and strategies. Premier registered a great win in Bank of the Ozarks in 2014.

Credit Unions: Fiserv has delivered when it comes to improving the DNA product’s stability and sales. They are flat-out selling the crap out of DNA to credit unions and also holding their own with banks. The only “Yeah, but…” is that so many of the new DNA sales have been to existing Fiserv core clients. In 2015 will Fiserv be able to continue DNA’s strong market momentum outside of its own core base?

General: Pundits, consultants and other industry hangers-on go blue in the face talking about the Big 4 vendors’ need to be more… uh… cooperative when it comes to third party system integration. But here’s the elephant in the room. What we really mean is that Fiserv in particular has a strong need to improve in this area. Most, including myself, have just been too weak to call it out. While all vendors stand to improve, by far the angriest and most vociferous integration complaints come from Fiserv core clients. And there is not even a close second.

Fiserv has become the poster child for struggling to execute on a loan origination system story, though FIS and JHA wrestle with LOS, too. Take a look at the two headlines below from the Fiserv web site.

Would you think Fiserv just:

  1. Developed a brand new product?, or
  2. Renamed a product it unveiled almost seven years ago and still struggles to capture significant market share?

Free shot of Jäger for those who answered “b”!


Banks: With IBS, FIS has a strong commercial banking platform with solid momentum, a great customer base of $1 billion+ banks, and a contender on the short list at just about any mid-size bank seeking an outsourced solution. And winning media darling Umpqua’s business last year certainly didn’t hurt.

IBS has also, by most accounts from Cornerstone’s client base, grown its implementation staff fast enough to keep its acquisition-happy banks satisfied. Stories of prolonged wait times to integrate acquired banks have all but ceased, and to FIS’s great credit, it seems to have grown without sacrificing quality.

Outside of IBS, however, FIS is struggling to establish an identity with its core banking products, including Horizon, BancPac and Bankway. If you’re a $2 billion bank that wants an outsourced core, everyone knows FIS will bring IBS. But what if you’re a $500 million community bank that wants to operate core in-house? There’s no easy answer there, and that can hurt FIS’s ability to win deals in that sector. The market is looking for a more concise, thoughtful message from FIS on its products other than IBS.

Credit Unions: The FIS credit union story is nowhere. Despite multiple attempts to assure the market that the Miser core is here to stay in Credit Union Land, the market is not buying it. With minimal market awareness, slow sales momentum and a message that is doing nothing to help, FIS’s tenuous position in the credit union market is on the precipice. It is time for FIS to come out loud, bold and earth-shattering to resurrect its name with credit unions. Or just buy a competitor.

Frank Martire

Frank Martire

General:  We were sorry to hear about the retirement of former CEO Frank Martire, though he is succeeded by long-time FIS hotshot, Gary Norcross. FIS’s challenge here is to convince clients that Norcross will be just as much of a customer advocacy guru as Martire was.

Jack Henry

Banks: Silverlake remains a stalwart of the mid-size bank market. The new Experience UI for front-end applications is well received by prospects and is a much needed modernization shot in the arm, but the real home run will be when Experience is ready for back office applications as well.
JHA is struggling with its channel delivery story, though. While JHA has been hard at work on them, its NetTeller online banking and goDough mobile products remain a noticeable step behind the competition, especially when it comes to all-important look and feel. And when it comes to a credible story for online cash management for businesses, JHA is…

Credit Unions: I hate to be a broken record, but the real need for Symitar is to spin a convincing, consistent tale about what the hell it’s going to do with its proprietary database and/or a new, third party database. Are you going to support both forever? Are you eventually migrating away from the proprietary model? Are you going to feed a third party database with your proprietary database? The story changes depending on who and when you ask.

General: JHA continues to grow without losing its service edge, a mind-bending rarity in any industry. There are exceptions, but JHA remains a leader when it comes to service.

It’s troubling, however, that JHA has sheepishly punted by leaving loan and deposit origination development to a partner – albeit a strong partner in MeridianLink. We get partnering when it makes sense, but man, account origination is such an integral part of JHA’s client base that anything other than a nicely self-developed product is selling customers short.


 D+H has the unique claim of being a vendor much better known for its ancillary systems (LaserPro, CreditQuest, DecisionPro, uOpen, etc.) than for its core products – namely Phoenix in Cornerstone’s market. D+H truly is the only Big 4 vendor that doesn’t have to blush or stutter when discussing its LOS strategy.

Though the Phoenix product could use some improvement in functionality and integration for credit unions, it tends to show pretty well to our bank and credit union clients alike. So, what’s stopping Phoenix from duking it out with Symitar and DNA in the CU world and Premier and IBS with banks?

Almost no one has ever heard of it.

Cornerstone consistently has to introduce – not just discuss, but introduce – Phoenix to most of our clients, banks and credit unions alike. Phoenix needs market awareness and name recognition more than just about anything else.

OK, I’m retreating to my reinforced bunker in Estonia after dishing the VendorDirt this week.

Clients… you know how to reach me!

-Hodgins glasses

follow me on twitter: @VendorDirt

 Top 3 Reasons Banks Avoid System Selections

  • A shortage of information about vendors and their products
  • Lack of a clear methodology
  • Minimal time to manage such an important project

If any of these sound familiar, we should talk. Cornerstone Advisors has been helping banks and credit unions make educated decisions about their systems vendors for more than a decade.

We’ve done it hundreds of times, and we have a long list of satisfied clients to prove it.

Visit our site or contact us today to learn more.



Filed under: Core Processing, Loan Ops & Collections, Vendor Buzz

Print This Post Print This Post