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

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November 24, 2015 by Terence Roche Terence Roche

GonzoBanker Guide to Bankspeak for Industry Newbies

“Son, if you really want something in this life, you have to work for it. Now quiet! They’re about to announce the lottery numbers.” -Homer Simpson

To the newer employees in the banking industry – today’s tome is for you! At GonzoBanker, we are always excited to see new faces and new talent in the industry. What’s more, we consider it both a privilege and a duty to help you wade through many of the complexities of our industry and put the wind at your back in your journey to success.

One of the first and biggest struggles you will have is trying to understand what we have all come to know as “Bankspeak.” There are plenty of things you are going to hear people say. Some of them you’re going to hear several people say a lot. Maybe a whole lot. But, here’s the thing. Some of the things people say might have, over the course of time, come to really have a meaning that’s the eensiest, teensiest bit different from what the words might actually imply. In other words, there are things people will say but there’s also a deeper meaning you have to understand.

Now, your initial impression might be that this sounds like a bunch to wade through, right? Sounds like it could be a bit discouraging, right? You maybe want to stop reading, right?

Well, as the Scottish say, Nah! In fact, the team at Cornerstone has pondered this exact topic, and what follows today is a list of some of the most common things you will hear in meetings, speeches and conversations with vendors. But here’s the kicker. We have also de-coded for you what they actually mean! This will save you tons of time walking around and pestering your peers with questions that start with “What the?” that many of them still can’t answer.

Now, in order to give you maximum value on this topic, I have divided things into three groups:

  • Vendor Speak – things you will hear from the vendors that sell you the systems and services that are needed to run the bank
  • Banker Speak – things you will hear from your peers and leaders
  • Consultant Speak – things you will hear from the invaluable consultants who will help you with key decisions, key projects and (now, if you remember anything, remember this next point) that need to represent an ever-increasing part of your non-interest expense budget in future years

Vendor Speak

When a vendor says: “We have not talked for too long. We’d really like to visit you and share strategies and vision.”

It means: Your contract is up for renewal sometime in the next 12 months.”


When you hear: “We view this relationship as a long-term partnership.”

It means: They’re going to propose a 10-year term.


When you hear: “We see this as a win-win.”

It means: They’re going to try and win this deal today. If that works, they’re going to be back tomorrow and try to win something else.


When you hear: “We think that by the end of the day you will see the real value this solution can bring to you in terms of growth and efficiency. And that’s where we want to focus – value.”

It means: They already know they’re going to be the most expensive proposal you get.


When you hear: “We have invested more R&D in this system than any of our competitors have in theirs.”

It means: “Quick! Somebody in marketing come up with a graph in case I get challenged on this!”


When you hear: “I’m glad you asked. That’s in our long-term roadmap.”

It means: “Damn. That’s a good idea. Somebody write that down and let’s take it to the developers.”


When, in a demo, you hear: “We are very parameter-driven so our users can have maximum flexibility in customizing the solution,” or, “I think we should get my experts with you one-off on this entire topic since it’s clear you have much more sophisticated needs that most of our users.”

It means: “I have no idea if our system can do what you just asked. I don’t even understand the question.”


When you hear: “We almost certainly have integrated a separate third party tool that can do it. Let me follow up on that.”

It means: “We can’t do that. Will you give us a jingle if you find a tool that can?”


When you hear: “I’m pretty sure we could commit to that but I hope you understand that I’d have to run it by home office first.”

It means: The lawyers can always come up with a better way to say no than the sales people can.


And, when a vendor says anything that includes the phrases “multiple data points,” “rapid development,” or “leveraged architecture”…

It means: No clue. Good luck on that one.

Banker Speak

When a CEO says: “We have to get the right people on the bus.”

It means: Well, CEOs are complicated people so this actually might mean one of two things:

  1. He/she just read Good to Great again and it’s going to be a big part of the next strategic planning meeting. So you need to grab a copy, dust it off, read it and practice saying, “Call me crazy for asking, but does that idea really pass the Hedgehog test?”
  2. Somebody’s ass is getting fired. And soon.


When a CEO says:  “We have to aggressively take advantage of growth opportunities,” or, “I have 100% confidence in the ability of my team to adapt to any change or meet any challenge.”

It means: He/she is about to announce another big, messy acquisition, which you will have six months to pull off. Maybe.


When a senior management team, to a person, says: “This looks like a real opportunity for one of our young stars to run with.”

It means: None of them want to get within 10 miles of whatever this thing is. You’re about to be drafted, Bubba. Now that I think about it, that’s how I got put in charge of I.T. back in the day.


When a CFO says: “I’d like to see a bit of a harder ROI on this before we go too much farther.”

It means: You have no chance in hell of getting the money for this. Just turn off the PowerPoint and mosey on down the road. Starting right now.


When a banker says: “Yes, this is aggressive pricing. But, we really need to make a statement in the marketplace that we’re a player.”

It means: “Man, this deal makes or breaks my quarterly goal.”


When the head of Sales says: “We have implemented our sales culture and have exceeded every sales goal we set.”

It means: “Quick! Somebody who understands the sales tracking system come up with a graph in case I get challenged on this!”


When Ops says: “Has anybody stopped to consider the damn fact that if you just used what you have in front of you the damn way we set it up and read the damn documentation then we wouldn’t need to talk about getting a new damn system?”

It means: Oh. This one’s easy. That’s exactly what it means. You see, Ops people are missing the say-one-thing-mean-something-else gene. Note: this does not mean you have to read the damn documentation. I mean, nobody else did.


When anybody says:  “I’m a change agent.”

It means: They liked the way things were done at their last job and they’re going to make you do it that way too.


And, if your boss ever says: “You have a unique set of skills. We really need to put our heads together and think about whether they are being fully utilized and whether you are being truly challenged in your current position.”

It means: Your ass is getting fired. And soon.

Consultant Speak

When a consultant says: “We specialize in one-off jobs like this.”

It means: “We haven’t exactly done this kind of job before.”


When you hear: “We have a proven set of tools and a field-tested methodology.”

It means: “We have a certain way we like to do things and we’ve never been accused of being open-minded about this.”


When you hear:
“We have an iterative design process.”

It means: “We’ll keep trying things until we hit on something you like.”


When you hear: “You need to take a holistic, top-down planning approach that really leverages your human capital and sets actionable targets.”

It means: Uhhhhh. Yah, I really have no idea what that means. What’s bad about this is that I’m pretty sure I said it in a speech one time.


And, last but not least, when you hear: “We can say with complete confidence that every engagement we have ever done for a client has produced significant, measurable results.”

It means: “Quick. Somebody have one of the analysts come up with a graph in case I get challenged on this!”

So, there you have it. We have cut through countless hours you industry neophytes might have wasted fretting over, deliberating, and deciphering things you will no doubt hear in your career travels.

And, although we pride ourselves on being thorough, we have to grant that there is at least the statistical possibility that we may have missed just one or two things. So, an offer. For the first three additions you loyal readers send in that qualify for this elite list, you will get them posted in a future GonzoBanker article (a real feather in anybody’s cap and an important career booster) and a GonzoBanker T-shirt (not so much). One guideline for this – anything that really nails consultants probably has a slightly lesser chance of qualifying. Just saying.



Filed under: ???, Branch Sales & Service, Core Processing, HR & Training, Marketing, Operations, Retail Banking, Vendor Buzz

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November 17, 2015 by Scott Hodgins Scott Hodgins

Vendor Dirt: Should You Ditch Your Big 4 Core for a Regional Player?


The Regional Processors’ Value Prop

151117fWith good reason chief information officers and the C-suite in general love to bemoan their core processors. Some of the best invective I’ve ever heard has come from angry bankers with a death wish for their core processor, usually one of the easy targets, the Big 4.

No, GonzoBankers, not the Big 4 of speed metal; I’m talking core processors D+H, FIS, Fiserv and Jack Henry. Sometimes, after blood starts boiling over bureaucracy/lack of attention/nickel and diming fees/missed development milestones at the Big 4, a chief executive officer or a CIO will ask, “Is there a smaller or regional provider that could do just as good a job as the Big 4 without the headaches?”

Let’s not forget that I’m a consultant first and an omniscient industry commentator second; therefore, my answer must be, “It depends.”

Let’s bottom line this one up front: If you’re a smaller (under $1 billion or $2 billion) bank or credit union and not in a best of breed environment, the regionals could be very attractive to you. If your bank or CU is bigger than that or, more importantly, you are best of breed or want to become that way, the regionals are probably not going to solve much for you.

What Do the Regionals Bring to the Table?

Ancillaries Drive the Proposition –
One of the most important assets a smaller or regional core player brings is a suite of tightly integrated, affordable products. The emphasis on “suite” is because only very rarely will regionals integrate ancillary systems that are outside of their suite or very small group of preferred partners. They have the discipline to enforce that philosophy. The regionals don’t do “just this once” or “could you make an exception for us?” integration projects. You use their suite and you like it. Period. In a lot of cases, this vendor discipline can save the bank from itself.

Service – While this is unscientific and based on a couple of decades of observation only, regional core players tend to have happier clients than their Big 4 counterparts. What’s the biggest complaint that FIs have with their core vendors? Integration – and there isn’t even a close second. Limiting the number of third parties they work with helps the regionals nearly eliminate integration conflicts and creates a simpler environment to support. It’s a little heavy-handed, but the take-it-or-leave-it ancillary strategy is the secret sauce in regionals’ Better Service stew.

Beyond that, the regionals just pay more attention to service overall than the Big 4 do. Compared to the Big 4, regionals tend to:

  • Work with and support smaller clients that demand more handholding.
  • Maintain lower clients-to-service-rep ratios than the Big 4.
  • Weigh customer satisfaction more heavily for employee compensation.

Price – For many good reasons the regionals are for the most part universally less expensive than the Big 4.

  • Many of the regionals are not publicly traded (or they are traded OTC with very low volumes) so they can afford to work with lower margins without giving a bunch of snot-nosed stock analysts a damp case of the shakes.
  • Promises of “great service” only go so far in attracting customers, so the regional players have to underbid the Big 4.
  • Keeping the ancillary/integration environment simple and focused is just a much cheaper way to deliver.

The truth is that maybe 25% of banks and CUs that have gone down the best of breed path really are different or niched enough to merit the best of breed strategy. That leaves 75% of best of breeders either forced into that strategy because their core suite is so weak or they’re believing their own BS about being unique. Oftentimes, banks and CUs see the light about their best of breed strategy when they compare regional versus Big 4 pricing.

Fit Matters at Regionals – The Big 4 vendors say they are looking for clients with a great fit, but let’s face it, revenue trumps fit every time with the big boys. When the Big 4 look for “fit,” it’s a question of evaluating which of their various core products best fit the prospect. Regionals have to decide whether a prospect is a fit for their company at all. Regionals have the luxury, even the mandate, to find clients that fit because fit drives their whole value proposition. Plus, regionals simply can’t afford to participate in every deal. Poor fit at a regional means higher costs of delivery, weaker service and more complexity than it cares to handle.

If your bank or credit union is looking for a longer-than-your-arm list of $1 billion+ installations, you probably won’t be impressed with the regional core players. If you are married to your best of breed ancillary strategy, move along and focus on the Big 4.

However, if you want better service that accompanies a focused vendor and a simple, well integrated ancillary strategy, the regional core players are worth a look.

Let’s continue the conversation and happy shopping, GonzoBankers.



Stay or go?

With a potential outlay of several million dollars, a core system decision may well represent the most significant strategic and financial investment your institution will make in the next five years.

Cornerstone Advisors has the in-depth knowledge and the tools to ensure you make informed, well-documented vendor decisions that support your organization’s strategic goals.

Visit or contact us today to learn more.

Cornerstone Advisors


Filed under: Core Processing, Vendor Buzz

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November 9, 2015 by Gonzo

Gonzo Notes from Money20/20

By Brandi Gregory, Nick Lane & Terence Roche

Recently, your intrepid Gonzo investigators found themselves (again) in Las Vegas to get a take on payments at Money20/20. (We are rotating the team, as Misters Kilmer and Weikart reported that rehab from BAI Retail Delivery is taking a bit longer than estimated.) Maybe it is appropriate that this conference is in Vegas, since it’s a city based on one sole premise – moving money from your pocket to a casino’s pocket (a business model that appeared to be successfully applied to a large chunk of the attendees in the wee hours).

The logistics

Money20/20 became quite the event in a very short time, with 10,000 – count ’em – attendees up from 2,300 only three years ago. Would we all take that growth? It’s a testament to the focus we are putting on the payments space and the revenue we get from it.

The format differs from many other conferences, in that even the big name speakers get only 20 minutes to get their message across. They are not keynotes; they are essentially product launches – very new age. Count us in as attendees who vote for this time target as a best practice.

Big stories/buzz

If the word “Pay” is added behind any product, it can apparently become a mobile wallet. Samsung Pay was launched in the United States after piloting in South Korea. Samsung bought LoopPay with its Magnetic Secure Transmission technology, which gives it the ability to reach merchants in a way that other wallets cannot due to having both the NFC (near-field communication) and MST (magnetic secure transmission) technologies.

Apple Pay … not

Continuing on the “Pay” theme, we know all about Apple Pay and the noise it caused in the market last year. Apple may have been in attendance this year but it was pretty much invisible on panels and in keynotes. What has come of that noise since launch? A pretty conspicuous absence.

The latest growth talk

There is some serious usage growth projected. According to research firm eMarketer, there will be a 210% growth or $27 billion spend in mobile payments in 2016. By 2019, eMarketer is forecasting $210 billion in spend and estimating that mobile payments will surpass payment cards. Only time will tell if that happens, BUT even if it’s close, financial institutions need to make sure their cards are loaded to the mobile wallet.

The Chase/MCX announcement was the talk of the first two days. Our take? Two things. Chase, for its part, gets control of the ecosystem for 95 million cardholders. Bankers had long suspected MCX’s plan was to bypass the Visa/MasterCard rails by processing transactions as ACH. Instead, all transactions will route through Chase Pay, which gives Chase control over the issuer side, the merchant side and the rails. While it’s hard to put a number impact on this yet, and there is an interchange revenue give-up, Chase has to think there’s a long-term payoff.

MCX gets credible volume and partnership. Brian Mooney, CEO of Merchant Customer Exchange (MCX), also used his stage time to talk about the pilot under way in Columbus, Ohio, with many merchants. Lots of talk about innovation and customer experience. Thundering silence regarding how those transactions are being routed to the issuer. It is seriously time to start building intelligence on the source of ACH transactions, bankers. MCX is getting ready to go from pilot to rollout mode.

Another buzzword to add to the pile: ubiquity

One big innovation discussion was that as payments become increasingly ubiquitous, we will continue to see them disappear into the background of transactions, particularly in mobile. For example, the payment process to get a ride in Uber is so imbedded into the process that a person is simply crossing the “t” or dotting the “i” rather than the payment being its own separate event. An interesting comment was made during one session that with the payment process being so seamless and imbedded into the whole process, consumers could potentially exceed their spending limits. Thoughts, Consumer Financial Protection Bureau?

Can you say blockchain, blockchain, blockchain?

Roughly 10% of all the individual track sessions were devoted to blockchain/bitcoin. For those not directly tied to a bitcoin company, the message was, “Think of all the things we can do with the underlying technology.” For those with skin in the bitcoin game, the message was, “Why are we trying to separate blockchain from bitcoin?” Regardless of which side you fall on, the fact is that blockchain/bitcoin has the industry’s ear.

There is currently more than $1 billion in venture capital investments into blockchain/bitcoin technology. Many of the big players have recognized the potential use cases and not all of them are focused around money movement. For example, Visa’s Connected Car booth stated that insurance and lease payments were handled via blockchain. The consensus is that the next phase of blockchain will be laying the foundation and identifying its two biggest hurdles: cost and regulation.

Innovation on the merchant side

While everybody can’t stop talking about the consumer, we were struck by how much innovation was taking place on the not-so-discussed merchant side of the business. Why GonzoBankers find this relevant for our clients: Merchant services is an area that FIs need to re-evaluate to ensure they are maximizing revenue on a business line that is often buried in commercial and forgotten. Offering this kind of technology could be a game-changer for small business.

So, good freakin’ God, real innovation from an industry behemoth? Frank Bisignano of First Data and team showed the latest version of Clover, first announced at Money20/20 in 2013. Followed by two years of, well, not too much. Then, at this year’s conference … boom. The team showed off some really interesting stuff that the Clover merchant application can do. One of the biggest challenges for small merchants is getting new customers in the door (and keeping them coming back once they are there). This software provides easy to use “Big Data,”

Cornerstone's Nick Lane (center) with Ed Glenning and Rob Roemer of Cap Com FCU

Cornerstone’s Nick Lane (center) with Ed Glenning and Rob Roemer of Cap Com FCU

including Geo Location information from smart phones, to help merchants identify sales strategies. Clover has some limitations but it was great to see how data is being used to achieve success. Real-life story: an owner of an ice cream parlor in California who discovered that she sold more ice cream on days that it rained (go figure). That info plus marketing tools got her sales up quite a bit on said rainy days. Damn that drought anyway.

Verifone launched what the audience could only assume was a biometrics terminal that knew when a card was not in the hands of the card owner. Additionally, the device is able to detect a skimmer and provide instant encryption and integrated tokenization. Verifone ended with a “coming soon” message but it was enough to whet the appetite and show the future that biometrics will play in the payments industry.

Innovation in security

The first phase of tokenization has been laying the foundation. The next phase will be about the innovation. There was plenty of mention of PAR (personal account reference), which is a new standard proposed by EMVCo that adds a PAR to a tokenized transaction. It is not a substitute for the personal account number (PAN), but it will allow merchants/acquirers to track transactions made by a particular customer and will give the merchant/acquirer the additional ability to track fraud/chargebacks and loyalty programs.

Biometrics is gaining traction. The first major theme is that it will not be one biometric solution that will win (fingerprint, facial, voice, etc.) but it will be about aggregating all of the technologies to get a full picture of the customer. Essentially the goal would be to use the aggregated biometrics to create a “public key” for customer verification. The second major theme is that biometrics removes the barriers to technology. The biggest example used was passwords and how antiquated the concept of passwords is. FIDO Alliance has been developing the technology specifications to reduce the reliance on passwords to authenticate data.

Innovation we saw that we’re all not talking about enough: lending

There was a separate track on lending that, in our minds, revealed that new players and approaches to lending are set to change the game. A few examples:

  • PayPal almost casually mentioned that it has now made $1 billion in small business loans.
  • Alibaba and Lending Club have partnered to offer instant credit to small businesses buying from Chinese suppliers.
  • Affirm showed integration with the Tradesy site that offered shoppers very transparent instant financing opportunities starting with a payment amount that worked for them.
  • PeerStreet and Patch of Land are, in different ways, crowdsourcing first mortgages and portfolios.
  • Realty Mogul takes crowdfunding to commercial real estate.
  • Self Lender is a site for people with no credit history to build it with tools and guidance.
  • Lending Club has 2 million people signed up to get notified when rates indicate it’s time to refinance.

This is just a sampling of way cool business models we saw that are scaling and have to be taken seriously. And their approach warrants some attention:

  • They are using data (or big data, if we need to interject an overused term) for very pointed offers. Lending Tree, for example, has 4,000 data points it can use in a decision. These guys are way beyond the talk of data. They’re applying it.
  • They all focus on transparency to the borrower: options, costs, et al are very clear very early. And there are not just good-guy reasons for this. They think it’s more efficient.
  • Most of them have a benchmark and target for total acquisition cost. In fact, cost of acquisition was discussed in every panel and cost of funds never got mentioned.
  • They are obsessive about speed of response and fulfillment.
  • And, to the oft-mentioned issue of them not being regulated like banks? They kicked that one right back by pointing out that a) many of them operate in several countries and deal with regulators all the time, and b) for the most part, they don’t have problems with the likes of CFPB. They actually agree with them.

The only question we heard asked that stumped a lot of them (other than Lending Club) was how they are going to work with banks. They didn’t have an answer. Why? Our impression is that for the most part they don’t think about banks at all.

We need to start paying attention to the models, technology and growth of these innovators. We’re not talking about this enough.

My mobile app has a first name, it’s O-S-C-A-R

Oscar Mayer developed a Tinder-style app for bacon lovers called Sizzl. Users download the app, specify their bacon preferences, customize their profile, and start swiping to find other bacon lovers. Who won’t sign up for this deal? Here’s the type of vision and leadership we’ve been talking about.

General session presentation notes

Pretty good quality in many of these presentations, and too many to mention. Some highlights:

  • Dan Schulman, CEO of PayPal, spent his entire 20 minutes talking about the responsibility attendees had to make access to money much easier, and the cost of moving money much less, for the financially disadvantaged. And in 20 minutes he had us believing that he really meant it. That is an important and cool message.
  • Max Levchin of Affirm showed how integrated a buying site and a lending offer can be.
  • Jack Dorsey with Square was absent due to the quiet period enforced during an IPO. What will this company launch post-IPO? Will its P2P product continue to be free? Another technology company we need to keep an eye on.

Final thoughts

Kudos to the Money20/20 team for a conference that was relevant, crisp, very well organized and is fast becoming a must-attend. The breadth and pace of innovation is astonishing and something we need to track and apply. Sure, all of the things we saw won’t hit mainstream status, but enough will – and they will have serious impact. Payments may not be a line of business or have a P&L (yet), but it needs serious focus.


Payments revenue accounts for 25% to 50% of your non-interest income.

Tightening up your Payments program can have a huge impact on your bottom line.

Cornerstone Advisors is an industry leader in Payments processor vendor knowledge, network services and Card programs. Our Payments experts at can help you identify opportunities, close gaps and maximize your Payments program’s profitability.

Contact us today to learn more.

Cornerstone Advisors

Filed under: Cards & Payments, Commercial Banking, Mortgage Banking, Retail Banking, Vendor Buzz, Web & Mobile Banking

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