Did you ever let the game time pass more than a few months in Warband? There was no way you could tell the difference after enough defections created mixed indistinguishable armies. I was hoping they would find a way force lords to only field troops of the faction they were currently part of but this color scheme is definitely better than nothing, if only they could get the Empire faction cloth to match the shield colors.
I played over 1200+ hours of Warband (probably half-again as much in WSE-enabled mods, so those aren't counted on my Steam stats) and the one-color banners don't confuse me at all. The sides are colored by factional affiliation, regardless of culture. It is difficult to imagine ways they could make it even easier.
This was difficult in Warband once lords started defecting, or in mods like Gekokujo where armor designs were similar or the same between factions.
I've played warband for over 2000 hours. I wasn't talking about defections, yeah defections made a mess but in bannerlord it gets confusing even in early game and its boring seeing every lord in same colours, only problem with warband is the defections but mods solved that with making lords change culture depending on their factions. I was hoping for a similar approach before the release of bannerlord.