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

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November 18, 2014 by Sam Kilmer Sam Kilmer

Gonzo Goes to BAI Retail Delivery 2014: Sweet Home Chicago?

The gloomy overcast ride from O’Hare followed the crushing Bears loss to the Packers, so BAI had to distract us with something provoking. And, man, did it ever … with the Aliens-esque signs of bankers getting their brains sucked out (or was it minds being blown by presenters, not sure?).


With a focus on digital banking and branch transformation, it was interesting to see the attendee list with lots of sexy new customer experience and analytics titles.

General Sessions

After Retail Delivery had some mushy general sessions a few years ago, this is the second year in a row we have seen some provocative stuff on the main stage.

Entrepreneur Gary Vaynerchuk implored the crowd to get beyond the marketing talk and stop marketing in the past. Vaynerchuk pointed to overpaying for slowly dying traditional media while consumers are actually looking at their phones and engaged in social all the time. His point that Uber sells time (nobody wants to keep submitting payment) as much as transport was spot on, and he encouraged us to test our marketing campaigns and double down on what works. Vaynerchuk delivered our second favorite Gonzo quote of the event (keep reading for the first favorite), “The adage ‘We’re regulated’ is a scapegoat from doing cool shit.”

John Mackey of Whole Foods encouraged the crowd to look outside their own business model for innovations as WF looks at the restaurant and tech sectors for many of its ideas, not just competitors. He appealed to bankers to talk about their value creation and higher purpose instead of just making money. “Banking is so vital and important but bankers have done the worst job of anyone at justifying their existence.”

Mark King of TaylorMade encouraged rapid prototyping and the institutionalization of free thinking by bringing outside perspectives. He also made 3,000 people think about golf and maybe buying more of his stuff for a half hour.

And, Sally Krawcheck’s interview with crowdfunder Danae Ringlemann of IndieGogo was compelling. Ringlemann said IndieGogo will be a banker’s friend because IndieGogo will take the risks banks will not and incubate the companies to get to loan-ready. Reminded us of how Lee Scott said Walmart would be the banker’s friend last year. GonzoBankers need to understand crowdfunding and learn how to mine more data to underwrite more and earlier.

Innovation Showcase & Global Innovation Awards

In BAI’s “demo” sessions, we liked that vendors Malauzai and D3 were out there showing some fresh user interfaces. We also liked that Fiserv Mobiliti brought out the R&D folks to show gadgets they were experimenting with across channels. Deluxe won the crowd’s award for demoing a Web-based alternative to its original SwitchAgent concierge offering from two years ago. Deluxe had halted marketing the prior offering due to challenges. From what we can tell, the big behind-the-scenes integration “gotcha” issues have not gone away, but Deluxe has people working on it. Keep your eyes on the early deployments we heard about at Suntrust and Numerica Credit Union. Our favorite demo was from Kiran Analytics, whose solution provides forecasting and collaboration among financial, staffing and customer experience decisions on branch and contact center staffing. Many of the sessions lacked demos and trafficked in platitudes. Worst practice of the sessions: “It’s an interesting time to be a bank and digital banking is part of an entire ecosystem.” Well, lah-dee-frickin’-dah! C’mon Avanade!

During the Global Innovation awards, an exec from Poland’s mBank pointed out that it’s the “blue screen of death” for a bank if its teams have to scheme the CEO for innovation resources. mBank claims 93% of its transactions and (get this) 82% of its purchases now come from digital, and it is seeing 20%-30% growth in new sales. We also liked Turkey’s Denizbank’s project that marries collections, lifetime value and CRM.

The Breakout Sessions

We certainly couldn’t attend them all, but we especially liked the rant Linda Verba gave on high performance culture at TD Bank. The self-proclaimed “Queen of Wow” identified TD’s top cultural irritants (systems, org structure) and discussed how it prioritizes, knocks out the list and keeps its heart in it. Favorite Gonzo quote of the event: “For 16 years, we’ve said our technology sucks … because it’s never good enough.” Verba encouraged small decisive working groups, dialog over PowerPoints and just a few measures of success. Pointing to creating sales opportunities with branch traffic declines, Verba talked about the power of instant issue/replacement debit cards and 1 million gift cards issued a year.

On a Fintech CEO panel dealing largely with vision, we liked Argo CEO Max Martin’s understated practicalities about eliminating paper in process and partnering with local universities for talent, a couple consistent themes we have also heard in recent GonzoBanker roundtables.

Fintech by the numbers: 5 CEOs, 10 stage lights, 2 flat panels, and 6 amps (with Hendrix-esque feedback)

Fintech by the numbers: 5 CEOs, 10 stage lights, 2 flat panels, and 6 amps (with Hendrix-esque feedback)

The “Transforming Customer Experience When Fraud Attacks” session was timely with Mike Young of EverBank getting specific about how the bank debriefs and learns from its voice of the customer calls. Tom McGill of First Financial Bank led a session with our own Jim Burson where McGill pointed to the risks of single-service customers, the importance of customers advocating for your brand, and getting bank reporting accountability simplified across channels.


First Financial Bank’s GonzoBanker Tom McGill leads some coffee talk with Jim Burson.

GonzoBanker Vernon Williams from Bethpage talking benchmarks with Sam.

GonzoBanker Vernon Williams from Bethpage FCU talking benchmarks with Sam Kilmer.

Execs from Broadway Bank and U.S. Bank discussed universal bankers in one solid session with gritty details of higher satisfaction and retention rates of universals and the emphasis on knowledge (training and ongoing mentoring). Broadway Bank’s Jimmy Allen told a fun story about how Broadway’s universal bankers communicated across the branch with hand signals that would make any third base coach proud.

Barclaycard discussed its social media and crowdsourcing, including a site where customers share travel stories and openly discuss product options. U.S. Bank’s Dominic Venturo’s session on innovation rocked. Venturo implored the crowd to build teams that include experts, collaborators, inquisitive and tenacious life learners and troublemakers and discussed the bank’s 30-120 day pilot-to-production cycle and 40% success rate (“too high because we need to push harder and fail more to create more”). A great example included a tablet credit card origination app with instant approval, virtual card assistance, and (now in pilot) drivers-license optical character recognition to streamline input with initial results of 50% improvement in app/close rate.

We also heard good things about a “Collaboration and Cross Sell” session that BMO Harris’ Kyle Barnett led and a “Digital Consumer” session Jim Marous led that rolled up the sleeves with acquisition versus retention success measures.

The Expo

With the “Omni” proliferating the show’s talk, there were several vendors showing off their latest efforts at cross-channel integration of systems. DI/NCR had the prime spot at the Expo entry with lots of watchers joining their demonstrations and uGenius demos along with DI’s new head of sales, David Wetzel, who just came over from Diebold.

The big theme was branch of the future. As many as 20-30 vendors were displaying interactive video, next-gen cash dispensers with sportscar names like TellerInfinity and 9900, branch design/configuration solutions and services, and all things branch re-invention.

GonzoBankers Cynthia McAree and Jennifer Peart Hurst from Apple FCU check out the Expo.

GonzoBankers Cynthia McAree and Jennifer Peart Hurst from Apple FCU check out the Expo.

Maybe this was as it should have been. Branches are the biggest delivery expense by a bunch, and pretty much every executive we talked to is now staring at the reality of fewer and/or smaller branches in the short term. So, we get it. But here’s the question: will the transformation really be led by hardware and branch design vendors?

Meanwhile, the rest of omni was pretty much absent. With all the focus on digital engagement in the sessions, we were struck by the fact that the only consumer loan software vendors there with any presence were CRIF and D+H. Visa had a quiet presence that was a large part of focus on anything related to credit cards. Andera and MeridianLink were nowhere to be seen, and both D+H and Fiserv have origination but you wouldn’t know it because they were mostly talking about other things in their booths. Where are the new capabilities? Where are the signings? Where is the digital engagement energy?

And, there was not a single vendor of any sort showing even the beginnings of an approach/solution for social media. So, isn’t retail delivery about consumer lending? Online delivery? Social? What’s very puzzling is the lack of solutions being shown for the channels where consumers are heading. BAI did a good job setting the table for this topic, but it doesn’t control the solutions.

$6B Rockland Trust’s Pat Myron talks analytics with Sam Kilmer.

Rockland Trust’s Patrick Myron talks analytics with Sam Kilmer.

The mobile/Internet transactional point solution vendors were out in force – ACI, Alkami, D3, Malauzai and Q2, to name a few – and they were showing fresh versions of their solutions and had the look and talk of people who are winning deals. ACI was talking up wins at SpaceCoast Credit Union, Langley Credit Union and some community banks; Alkami at EverBank and Spokane Teachers Credit Union; Maluazai some new core partnerships; Q2 at a Top 100 CU; InfoSys at Eastern Bank; and startup D3 talked about its signings of Arvest and another soon-TBA $25B bank deal. And, MX (the artist-formerly-known-as-Money Desktop) seemed to have decent booth traffic as did Bancography, where we were never able to spend quality time with Steve Reider and Laura Levie because of their traffic.

Sam still isn’t sure what it all meant, but with all the talk of “360 degree customer views,” the UI at the NG Data booth caught his attention.

Sam still isn’t sure what it all meant, but with all the talk of “360 degree customer views,” the UI at the NG Data booth caught his attention.

D3 wins the Fire Marshall Bill award for most-booth-prospects-per-square-inch. CRIF not far behind.

If D3 would have just moved out the potted plants, it could have increased its demo audience capacity by 25%.

If D3 would have just moved out the potted plants, it could have increased its demo audience capacity by 25%.

The CRM vendors have been on display in the past but this year seemed to be matched by interested buyers. Salesforce and 360 View were prominent, and Onovative, a five-month start-up, was showing some interesting MCIF-meets-onboarding software that could bear watching. 360 View even had a second booth focused on its SmartPops app, going to market separately. Microsoft was also there with a small presence, focused entirely on its CRM solution. With 10 people in attendance, a significant sponsorship and a couple of sessions, Salesforce really stood out, and it used the opportunity to talk up its deployments at Huntington Bank and Travis Credit Union.

Some of the other vendors covered their related capabilities, like FIS with Pinpoint and Fiserv with EnAct CRM (talking up an EagleBank signing). Argo was showing a pretty cool tablet-based in-branch prototype. Core system signings were also getting hyped, like FIS at Umpqua Bank and a soon-TBA $5B Midwestern bank, Jack Henry at Hudson Valley FCU, Fiserv at Bank of the Ozarks and Peoples Bank & Trust, D+H’s signing of a couple under-$50M CUs, and VSoft’s second U.S. signing of a soon-TBA $500M Texas bank following its original partner at Carter Bank.

The age-old battle between big-picture, multi-channel delivery solutions that are still in development and point solutions that do one or two things but work now rages on.


With the omni-channel booths competing against this “true omnichannel” booth, we kept wondering where the “really true omni-omnichannel” booth was. Where’s the creativity and product leadership, folks?

We always love to find a few new entrants with a cool new offering aimed at solving one need. Two jumped out. SurePayroll, a division of Paychex, had a nice payroll solution that cash management groups can private-label and provide to business customers. Shaker had an online testing tool called Virtual Job Tryout that lets you test applicants remotely. It’s really only focused on teller and call center positions now, so it’s not the bank-wide testing and predictive analytics tool of the future. But maybe it’s a glimpse.

Terence getting briefings from SurePayroll and Virtual Job Tryout in the Expo

Terence getting briefings from SurePayroll and Virtual Job Tryout in the Expo

And, Yseop (quick to point to the “Easy Op” pronunciation) had an interesting multi-lingual app that analyzes inbound chat streams and automatically simulates a human response with cross-selling. Kinda cool but also a little bit Super-Creepy-Rob-Lowe. We’ll see.141118k

Yseop made us ask if the need to tell prospects how to pronounce your name is perhaps a branding challenge.

Yseop made us ask if the need to tell prospects how to pronounce your name is perhaps a branding challenge.


Pathetic. After pens, there was a dearth. What happened to the t-shirts that we need for the gym next year? The things with flashy lights that we don’t know the purpose of but make us look cool to our kids and grandkids? The notebook we were going to give the mailman for Christmas? Now we have to go shop for them? Man, we need some vision and leadership here. This year, the winner was payments provider RDM’s smart-phone-holder-cleaner-but-not-terribly-effective-hacky-sack thingie.141118m

While not a giveaway (and best we can tell, also not driven by a multi-language-multi-currency core system), InfoSys seemed to make a couple fans with a Formula 1 race simulator.

While not a giveaway (and best we can tell, also not driven by a multi-language-multi-currency core system), InfoSys seemed to make a couple fans with a Formula 1 race simulator.

Gonzo Shout Outs

To GonzoBanker Joe Radovanic from Webster Five who literally wore holes in his vintage Gonzo t-shirt. New one is in the mail, Joe!141118o

To Chicago’s Ristorante Volare, which greeted a few thirsty GonzoBanker readers with a champagne bucket full of Bud. Harry Caray himself would have been proud.


A final Gonzo shout out to Sir Bob Geldof, the best BAI speaker ever (at Retail Delivery 2007), who just launched Band Aid 30 to raise money for the fight against Ebola. A classic example of a troublemaker with a higher purpose. Well done, again, Sir Bob!


Here’s to the Troublemakers!

Big thanks to Terence Roche and Jim Burson for their contributions to this article.


Filed under: Branch Sales & Service, Call Center, Cards & Payments, Commercial Banking, Commercial Lending, Consumer Lending, Core Processing, Deposit Ops & Item Processing, HR & Training, Information Technology, Loan Ops & Collections, Marketing, Mortgage Banking, Retail Banking, Small Business Banking, Vendor Buzz, Web & Mobile Banking

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October 30, 2014 by Terence Roche Terence Roche

The New Lean, Wired, Changing World of Human Resources

141030e“After finding no qualified candidates for the position of principal, the school board is extremely pleased to announce the appointment of [David S.] to the post.” -Actual announcement sent to parents

Last week, I had the pleasure of spending two days with a group of nine HR managers at a GonzoBanker Roundtable discussing their successes, challenges and issues. Now, I’m guessing most bank execs don’t spend a lot of time in HR and spend even less time thinking about their world. Well, here’s a news flash: whatever old school ideas might have prevailed about this group, it’s time to re-think them. This bunch was young, smart, aggressive, tech-savvy and forward thinking (I think I was there to represent the opposite and balance things out).

Here’s a summary of what I took away:

  • 141030bThere is a new 800-pound gorilla of recruiting, and it’s LinkedIn. LinkedIn began as a fairly passive experience where people connected with other people in the industry and occasionally kept in touch with them. Not so with HR. The three biggest communities on LinkedIn center on job searches and recruitment. An astounding 97% of recruiters recently surveyed said LinkedIn is the most common in-house recruiting platform. Everybody at our meeting said they use it almost daily. The search capabilities on even the free version are good, and on the paid version they are very sophisticated. It is an impressive evolution of a cloud-based tool.

Another growing player is Glassdoor. Didn’t Glassdoor start out as a place where people could talk about their companies? It now has a robust hiring, job posting and company branding solution that is getting traction in HR groups.

  • Because of tools like LinkedIn, candidate recruitment is increasingly happening in advance of job openings. It used to be that movement started when a job opening occurred. Now, HR recruiters are able to proactively take these platforms/communities, combine them with historical turnover stats in certain areas, and look for candidates before the company might need them. One service level agreement (SLA) that is being positively impacted is hire time, or the length of time between a job opening and it being filled.

“Recently, I was asked if I was going to fire an employee who made a mistake that cost the company $600,000. ‘No,’ I replied, ‘I just spent $600,000 training him. Why would I want somebody to hire his experience?’”  -Thomas John Watson, Sr., first CEO at IBM

  • 141030cJob interviews and testing via digital channels is becoming commonplace. We’re way past the experience where the video was one to two seconds ahead of the audio and you got dizzy watching. Increasingly, HR groups are supporting a widely dispersed employee base with an oftentimes national recruitment footprint. Necessity being the mother of invention, they have deployed solutions that allow deep digital interviews (recorded for subsequent review by line managers), testing for certain positions, and a success rate that may not quite match face-to-face but is pretty close.
  • People analytics is the new frontier. Broadly defined, it is the use of big data and analytical tools to predict how employees will perform in certain jobs and, from the other side, for which jobs they may be best suited. Several start-up companies are offering solutions that perform these services – check out Evolv, Knack and Klout to see examples of this. ere, a very pragmatic approach is being taken by HR directors. There is a lot of promise in technology that can help predict where and how employees will succeed, but there is a need to balance this against the myriad potential compliance and other legal issues that are always looming. Stay tuned on this one.
  • Human Resource Information System (HRIS) systems go to the cloud! Big, traditional providers such as ADP, Ceridian, Ultimate and Peoplesoft are adding and integrating modules such as workforce management, progression management recruiting and analytics to the more basic products like payroll and benefits administration. Newer players such as Workday, designed for the cloud, are making serious inroads and creating industry buzz. The biggest technology frustration expressed by HR leaders? Lack of system integration and no single sign-on. Boy, does this all sound like our core systems environment or what?
  • If I were a professional recruiter, I’d be feeling the same way travel agents must have felt 10 years ago. These HR directors, with the new tools they have at hand and their new skills at using them, are increasingly turning away from the recruiter path. The only real exceptions are a)“C” level recruitment with national reach and issues of confidentiality and (just maybe) politics; and b) really specialized looks. If I were a recruiter, I’d either get very specialized to meet these new and lesser needs, or I’d get ready to put my resume on LinkedIn.

The takeaways? The same trends and changes we see in delivery to customers – new channels, new experiences and new skills needed to support it – are also happening to HR groups and their internal customers. The same system needs and issues we hear from lending and retail are also being heard from HR. And it’s all happening fast.

Traditionally, HR has been at the bottom of the system upgrade/investment priority list we create every year in Information Technology. Maybe they get prioritized ahead of facilities, but that’s about it. Bank executives need to provide HR teams access to these newer tools and channels. They also need to be looking at their HR groups and asking what they are doing to build new knowledge and skills in this new world of recruiting and HRIS.

Oh, and keep your eye on these new HR professionals. They will be game changers.


Let’s Get Gritty!

At Cornerstone Advisors, we’re all about knowledge sharing. We get giddy when our clients talk amongst themselves in their quests to become – or remain – best practice institutions. So we created GonzoBanker Roundtables for executives at banks and credit unions to get together and dig deep on today’s hottest issues.

We host roundtables for CEOs, CIOs and CFOs and Lending, HR, Marketing, Payments and Risk Management executives.

Contact Emily Waite to learn about next year’s line-up.

Filed under: HR & Training

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October 15, 2014 by Steve Williams Steve Williams

The Miserable State of Cash Management Vendors

“Revenue is vanity … margin is sanity … cash is king.”

My heart goes out to the hard working professionals who run the Treasury Services or “Cash Management” divisions at community banks. For a long time, these rock-solid bankers have seen loan officers patronize them with passive encouragement while rarely referring a customer their way and never taking the time to understand their product offerings. Yet for more than a decade, cash management professionals have shown their resiliency. They have made it a daily ritual to shrug off credit officer arrogance and scrap together a pretty damn fine business of core deposit funding and fee income. It’s not always pretty, but these bankers have learned to package their offerings with duct tape and wire and land the latest big new deal with a health care group, municipality or homeowners association. And they have never asked for much of the bank’s capital to win these big deals.

But lately, there are deeper lines and fatigued expressions on the faces of cash management professionals. Their software vendors are letting them down and wearing them out in a big way. Let’s call it out, GonzoBankers. Most innovation, quality support and healthy competition has left the cash management vendor market, and it’s making it very hard for the resilient community banker to compete with the too-big-to-fail players upstream.

Every morning across America, cash management officers have to hit the streets and do battle with the mother of them all: Wells Fargo’s Commercial Electronic Office (CEO). Sure, it’s easy to poke fun at the big banks for being slow and bureaucratic. However, any banker peering into the screens of the Wells cash management portal has only one thing to say: “That is some very slick stuff.”

Community bank cash managers have long depended on major outsourcers and independent software providers to arm them with the tools to compete with larger players. There are several factors contributing to the malaise in the cash management solution market today:

1. The big vendors have not invested in big cash management solutions.
For such a critical product line to community bankers, it’s sad to see the Big Three outsourcing providers (FIS, Fiserv, Jack Henry) with more than $12 billion in combined revenue coming to market with such halfhearted solutions. Fiserv has been schizophrenic in its cash management offerings: a no-show on a Corrillian version for business customers, slow improvements to its Business Online (formerly E Corp) solution in the Premier core group, and a virtual burying of the former Banklink cash management offering. FIS has acquired solid products from its Metavante acquisition (BEB), but the company moved slowly to interface this solution across all core products. Jack Henry has catered its offerings to community banks but now must address solutions for its growing multi-billion dollar clients. It’s hard to believe somewhere in these behemoths there’s not $10 million to do some major league investing in innovative solutions for one of the most important product lines in bank software.

2. Integration and usability are still pain points.
The value in cash management is unlocked with strong integration and features for the customer such as multi-level security and single sign-on. Today’s cash management vendors are failing to deliver the slick portal offering that large banks are using to solidify commercial relationships. With mobile and web services technology, there has never been a better time to innovate usability. Unfortunately, cash management vendors have been slow to develop mobile and tablet versions of their products. Bottomline Technologies, which acquired Intuit’s cash management offering in 2012, has partnered with Malauzai to deliver business mobile solutions, but there is still a long way to go in integrating and reconciling web and mobile offerings. At Cornerstone Advisors, we applaud the efforts and hope more vendors will be able to deliver on these solutions soon.

141015c3. The unified payments hub is more theory than reality.
For a decade now, cash management providers have been issuing PowerPoints regarding the “payments hub,” which integrates automated clearing house, wire, Check 21 and international settlement into a single, least-cost routing solution. The challenge has been that most banks use separate modules for these payment channels and no easy migration path has been laid out by one vendor. Cornerstone gives credit to ACI Worldwide for doing the most work to further this vision, but the proof will still be in the implementations. ACI has the skills and resources to create a best-in-class offering, but it clearly must address a somewhat bitter client base from its S1 acquisition, which feels it has been given too many empty promises or changes in product direction from too many different owners.

4. Compliance and implementation challenges have frustrated bankers.
In the middle of trying to compete with large bank cash management offerings, community bankers have been smothered with compliance concerns around cash management security, business continuity, anti-money laundering and fraud. In the midst of these challenges, bankers see their own vendors coming under regulatory scrutiny. In the fourth quarter of 2013, the Federal Deposit Insurance Corporation entered a consent order along with the Office of the Comptroller of the Currency against cash management vendor Fundtech. The company was ordered to assess its information security risk and create a better vendor management program that meets agency guidelines. Bankers have also reported that cash management solution providers seem alarmingly scarce on resources to address new upgrade, integration and deployment projects. As one technologist at a $9 billion bank said to me, “They just nod their heads and ignore us.” To some extent, vendors have been able to get away with starving development and project resources because of the technology “lock in” effect – it’s just too big a pain and too much customer impact to switch cash management providers. However, frustration levels are becoming so high that many large community banks will be seeking new solutions and partners in the years ahead.

An opportunity for disruption?

To every vendor or software developer in their garages today, a gonzo wealth opportunity awaits you! With mobility coming to business banking in full force and web services providing new ways to build portal interfaces and facilitate integration, the industry is dying for the next big thing in cash management. It’s encouraging to see retail e-commerce providers like Q2 putting their sights on developing a more robust cash management offering. We applaud when an upstart like Online Banking Solutions snags a big fish like Iberia Bank with its Messenger product. We love when Malauzai CEO Tom Shen promises he will progressively build deep commercial functionality into the mobile platform with Bottomline. These are all encouraging starts, but so much more needs to be done and more resources need to be allocated to this part of our industry. Twelve years ago I wrote a Gonzo column titled “Cranking Up Cash Management” that signaled a new growth era for this product line in community banking. For the past decade scrappy cash managers at community banks have been working their tails off on this crank up effort. It’s time for the major outsourcers and innovative technology companies to do their part.


Vendor Management Made Easy(er) 

Effectively managing vendors can stretch a financial institution’s time, energy and resources. Cornerstone Advisors can ease some of that strain.

Backed by hundreds of core and ancillary system selection and contract negotiation engagements, Cornerstone has the expertise and the proven methodology to help financial institutions make smart vendor choices and manage their solutions in ways that align with their strategic technology visions.

Whether shopping, selecting, converting or negotiating, there’s no better time to enlist the expert assistance of a seasoned partner to help manage your vendor relationships.

Contact Cornerstone Advisors today to learn more.


Filed under: Commercial Banking, Treasury Management, Vendor Buzz, Wealth Management, Web & Mobile Banking

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