TAB Bank got its start in the transportation industry, using tech like Mulesoft and APIs to grow and transform its business. In June 2021, I had a chance to speak with Curt Queyrouze, president and CEO of TAB Bank, about how a bank that started life 20 years ago operating out of truck stops across the U.S. is using modern fintech platforms and development practices to transform its business. The following is transcript of that interview, edited for readability.
Bill Detwiler: Before we get started and we talk about digital transformation, give me a rundown on what TAB Bank is and what you do.
Curt Queyrouze: Certainly. So TAB Bank has a very unique story. We’re 23 years old and when TAB Bank was founded originally, the family that owns the bank, is in the travel center business, and so we were originally founded to help serve truck drivers. So the interesting thing is TAB Bank has never had a branch. We’ve always conducted business, either through the internet or a combination of methods like that. So 23 years ago, what that meant was having fax machines in truck stops. Literally, truck drivers would fax us documents. We would process paperwork. If you can imagine a truck driver’s world, they are the backbone of moving the economy in this country, but they’re running their own small business from behind the wheel of a 18 Wheeler. So they’re a 1,000 miles away from home and they have to conduct banking business. They maybe need it to discount an invoice so they can have money to buy fuel. So they were going in, they would fax us documents after they delivered a load. We would use a method to load cards so they could swipe and buy fuel, and that was the origin of the bank.
So in 23 years, we’ve never had a branch. We’ve always served our customers through other means and that gave us a unique perspective. Today, about half of our business is still transportation-focused. The majority of the rest of our focus is really just general small businesses across the country. So we still serve customers in all 50 states. We’re based here in Ogden, Utah, but really only about 7% of our customers are here. So we’ve been doing the, not quite digital world, but we were remote banking for a long, long time.
Bill Detwiler: Let’s jump then into the remote first origins of TAB Bank. How did that shape the organization and how you’ve changed over those last 20 years and gone from, as you describe it, fax machines and working with your customers through the phone to really moving into the digital age and working and interacting with those customers, serving them through the internet, but not having the legacy of brick and mortar locations? Describe that journey a little bit.
Curt Queyrouze: It’s an interesting journey, I think, of course, I’m all in it, so. We realized a couple of years after the great recession had ended and things were getting back on track, that we were struggling to keep up with what was going on in the world. We were still using fax machines quite a bit at the time. We were doing a lot of business through email, which is not a good way to actually conduct business. We had fillable PDF forms, and that was our automation at the time seven years ago, and we were taking a couple of weeks to process loan requests. We would take a few days to open a checking account, things of that nature. So we realized seven years ago, we needed to embark on a true digital transformation.
As we started that journey, I remember talking to our chairman at the time and telling him, “Well, we need to invest.” I think the first investment was a $1.4 million investment in a data platform, and I could not make him understand why this was important. We walked through and it took several meetings and hours of presentations to convince him that this was important. After we did that, we were able to create straight-through processing. So we reduced by a couple of weeks the timeframe to maybe get an equipment loan to buy a truck, down to a few hours. That was an amazing transformation, but we were still not digital. So we were taking data in electronically, but then our systems internally were very manual. So we had to take data, somebody keyed the entry into another system.
We had so many legacy systems. This is true in banking, it’s true in so many industries, but particularly in banking. So we had this legacy core. So the next step after we achieved some success with the first level of digital transformation was, where do we go from here? How do we then take this and move it forward for our customers? We started thinking about our legacy systems and whether we needed to rip and replace. That’s a scary proposition. So we found a better way, which is really building an infrastructure of an API stack to basically take the data in legacy systems and put it in our data platform and be able to use it from there.
Taking a “middleware approach” to building systems
Bill Detwiler: That’s a common story I’ve heard. When I was in IT before being in tech journalism and media, that was something that we struggled with. Talk about why you made that decision to not just rip out all your legacy systems, but instead went with a solution that, like you’re talking about, with APIs, that helped you automate the data transfer through those systems and cut out that, as you were describing it, the manual moving of between one system and the other, and maybe how has that automation and the trying to move that digital transformation journey, how has it helped you improve operations internally, and then also externally and improve your relationship with your customers?
Curt Queyrouze: We actually used two different of the big three core providers, because we have a couple of unique products. So we have Jack Henry and we have Fiserv as providers. I’d say, five years ago, I was like, “Okay, I’m done with these providers. I want the most cloud-based, new tech out there.” I’m a risk manager at heart. If you’re a good banker, you’re a risk manager. And as we went through that, we realized the risk of going with an unproven cloud-based system to handle an entire bank’s operations was too great. So by default, we settled on this middleware approach where we built a customer management system of our own on top of our data platform.
The great part about it is, the legacy providers do certain things really well, general ledger systems and all of the nuances. So as time went on, I realized my frustration with this situation years ago, while probably justified, didn’t justify a rip and replace, so we went on the API route. It was early in that journey when we happened upon MuleSoft which was our primary provider, and they really helped lead us in the journey and give us expertise and resources to craft our strategy, and as it took shape, one of the things we didn’t expect was the ability then to control data at speed.
I think we talk about scale so much in banking and tech. If you’re not a big bank, you can’t survive. Matter of fact, as we were investing money, our former chairman really wasn’t sold on the investment, because he said, “How are you going to compete with B of A and Chase? This is ridiculous if you think you can compete with them.” And we don’t necessarily look to compete with them. We look to differentiate ourselves from what they do and I think the differentiator in the future is speed. And so, as we went through this journey, we found that it was not just speed of being able to open an account because now it takes three minutes today to open a checking account with us. We’re launching some new systems here this month. It’ll be less than three minutes. It’ll be less than a minute by the end of the year.
So that’s important for customer satisfaction, but it’s the speed to be able to react to opportunities in the marketplace and to the changes because it is changing so rapidly out there and we can move very quickly. We moved very quickly when the pandemic hit, we moved very quickly when PPP opportunities came up to help small businesses and as a small business-focused bank, that was important for us. The ability to stand up systems and rearrange them, and the MuleSoft composability capabilities, the ability to reuse an API for different purposes, gives us an incredible amount of speed, not just to serve customers, but to pivot and that’s where I think the future is. If you don’t have speed, and if you’re not nimble, I think you’re going to fall by the wayside. So that was the most important thing.
As we’ve been through this journey, the thing that’s to me the coolest is that we were running a net promoter score with our customers at about 45 five years ago. We measured our net promoter score at the end of 19, and it was 72. Very few of our customers have ever seen us face to face, but yet we still think we’re a community bank because our community is online, but they’re a community of small business owners. Our customers now, 72% would recommend us to a family or friend and that’s an incredibly powerful thing. How do we do it? We did it because we’re able to manage data well through our API stack and we were able to take advantage of opportunities and deliver so fast, and our partnership with MuleSoft is a big part of it.
MulesSoft and APIs are a big part of TAB Bank’s tech roadmap
Bill Detwiler: I think that’s something I’ve heard from a lot of CEOs, CTOs in the last few years is really being nimble and being able to adapt rapidly. If I had to ask you where you see TAB Bank being able to leverage that maybe one or two years out, what would you say? Because I love that story of, we started focusing on this niche group of customers within the transportation industry, truck drivers, and now, because we’ve been able to transform our business and because we are so nimble in our systems, allow us to react quickly, we can expand that and we can service more types of customers. Where are you looking to go? You talked a little bit about some of the bigger banks and not competing with them on scale, but competing with them on service and being able to do things quickly. What’s the next iteration of that? Where is that going in the next couple of years for TAB Bank?
Curt Queyrouze: We’ve been working for some time and we’re ready to launch an open banking platform and what that means is, we’ve taken control of the data that’s in-house at TAB Bank, but the really important potential lift for our customers, and again, this is customer-focus, how do we help our customers succeed? And that’s by combining data that’s in their checking accounts, or their borrowing history, or their invoicing register with data that’s external or from other providers. When you start combining that with data from a payroll provider, data from an accounting system, then you get the holistic picture for the customer. So open banking, I think, is going to be one of the most monumental changes that we’re going to see over the next couple of years, and being able to manage data flow that’s going in two directions between third-party providers is going to be a differentiator.
So our ability to leverage our MuleSoft API stack to deal with external data is the next big lift for the bank and for the banking industry, I think, and the people that can do it well will have, I think, better success for their customers. And that’s where value creation is. If you help a customer succeed, then you’ve got loyalty, you’ve got trust and you’ve got all the things that provide value to the customer, thereby to the bank.
What is “permissionable” data?
Bill Detwiler: I’d love to hear your take because data is at the heart of what so many organizations are doing with their digital transformation efforts, but a lot of them either may not know what to do with the data or how to best use the data, not just to serve them, but also serve their customers. There’s always concerns, especially with financial informations, around data and privacy and security and those kinds of things. Expand a little bit more on how you’re using that data in a positive way like you kind of touched on. I mean, there’s a lot of concern around things like AI and ML, using data in a way that can be detrimental to some segments because AI and ML algorithms, however smart you think they are, they’re really just programmed by people. So they’re only as good as the people that develop them. They’re only as good as how transparent they are. They’re only as good as the data they get in.
So I’d love to hear your thinking as someone who’s doing this on a daily basis, how you’re thinking about that data from both a, here’s how we’re going to use that, here’s how we’re going to surface that to our customers, here’s how we’re going to use it to help them, here’s how we’re going to use it to help ourselves grow. Expand on that just a little bit.
Curt Queyrouze: Yeah, it’s a good point. So I think when you look at that, one of the most important things we talk about is security, permissionable data. Does the customer transparently know what we’re doing with the data? Are they going to permission it? What you find when you do surveys and we’ve done focus groups and surveys with our own customer base, is they’re mostly willing to give the data over for insights and value coming back. Once you’ve proven you can do that, which we have with some of our capabilities already, they’re all in, but then it becomes our responsibility.
Banking is a system that’s based on trust. When I talked about our net promoter scores going up and I talk about some of the other things, that our customer satisfaction scores are very high, we believe that there’s empathy and trust at the core of all of that and so if we mess up with data, we messed up bad. And that’s our golden chalice so to speak, and so we’re very sensitive about that. That’s another reason why we pick providers like MuleSoft when we’re dealing with data because of security, reliability, reusability, all of those factors. We’re very careful and thoughtful about how we do that and sensitive to that.
In order to do this, we have a deep partnership model, meaning that, how does a small bank in Ogden, Utah provide services across a country like this? Well, it’s through a deep partnership with tech companies and fintechs. I don’t have the capability to invest enough money to build a sophisticated AI model, but I can hire a firm that’s good at it. And so for us, we have probably one of the largest compliance operations for our size institution. We have a large IT group. There’s a vendor management requirement for banks, right? You have to do a certain amount of due diligence. We’ve taken a chunk of our vendor management program and turned it into a strategic partners program. So we do more due diligence on our own to understand what they’re doing on their end to help protect data and respect data. We really need to respect it. So we spend a lot of time doing it. It’s a lot of governance lift, which is not fun or sexy, but it’s really important. If we lose trust, we lose everything.
Data is crucial to success digital transformation
Bill Detwiler: Yeah, that is so important. Well, I’ve got one more question for you, Curt, because I know our time is limited. If you had one bit of advice to give to someone who’s watching this, another C-level executive, another person that’s in the same place maybe TAB Bank was when you started this digital transformation and they’re looking to replicate that in their organization, what would that be? You talked about having to convince the board of actually just making that transformation. I think that’s a story that resonates with a lot of people, that they have to be a champion for this process, but I’d love to hear if there’s one other piece of advice that you would share with people for how to get that process right.
Curt Queyrouze: It’s all about the data, which we were just talking about. I think the one thing, and I did a lot of studying, reading the very smart people like Chris Skinner and Brett King and others in the fintech world globally. When you read about it, an ability to control and manage data is the foundation of being able to make this transformation. So we started with a data platform and we built out from there, but once we had that data platform, we were able to create an incredible amount of efficiency and leverage off of those systems.
AI is great. All of the things that are happening out there are sexy and they look fantastic and trust me, we made a lot of failed attempts at doing a lot of things that were shiny object type things that didn’t work out for us, but fundamentally what has worked was putting a focus on data integrity, on data management and just focusing on it. And we keep rebuilding our data platform, over and over again. It’s a journey that we won’t finish. So we keep that focus on the data, being able to move it at speed, one source of truth, and if you focus on that, the rest will fall into place.
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