"Banner not in inventory"

[Rael]

I am getting this message when trying to trigger the cutscene after Vordt of the Boreal Valley. Should I have picked the banner up from somewhere?

http://images.akamai.steamusercontent.com/ugc/510405794955641656/DB7ACABD235BBD28572F431D361CBF5EF3C02097/

[Cody64]

If you enter the large room exactly opposite of the room you fought the boss in, you'll find an old lady sitting on a chair. She gives you the banner.