Jason Henrichs:

Hey, if you’re happy and you know it, clap your hands. I have not gone crazy, although if hear that song one more time, I might be going crazy in this pandemic. But today on Breaking Banks, we’re going to be talking with Mary Kate Loftus, Senior Vice President and Director of Digital at M&T Bank, and we’re going to be talking about happiness.

Jason Henrichs:

Now, the first time Mary Kate and I started this conversation, it was relatively easy to be happy, because we were actually at MX’s Fintech Summit up at Sundance, staring at the mountains and the snow, and everything was good. No one was locked down, spending all this quality time, no one was doing homeschooling.

Jason Henrichs:

But one of the things, Mary Kate for being… Apologies for saying this, you’re a digital nerd. Which is part of why I like you. But you are so happy about being a banker. And it was actually infectious in that level of how excited you are to be a banker. So maybe to start, why do you love being a banker so much?

Mary Kate Loftus:

I love being a banker. You’re right. I think it is just an awesome, delightful career. I think it’s because bankers are helping people with one of the most important aspects of their life, which is how to manage their money, and how to achieve their dreams.

Jason Henrichs:

Has that changed at all? Right now, in the middle of a pandemic, we’ve got a crisis, we’ve got people who are stressed. Has that sense of meaning changed right now? I’m assuming it’s gone up, right? I don’t mean to be leading the witness, but how would you characterize the way it’s changed?

Mary Kate Loftus:

I mean, I think gone up would be an understatement. I’ve seen people, I’ve seen executives so moved by what is going on, literally brought to tears. I think there’s such meaning in how we’re able to help customers, whether it’s keeping the lights on and the doors open and people receiving a paycheck. Or helping customers that have lost their jobs, or any other way, saying, “How do I protect myself now? I want to make sure I have a good plan in place.” So it’s actually brought back even more meaning of the impact we have in people’s lives.

Jason Henrichs:

With your digital hat on, the digital world is often accused or painted with the strokes of, “Oh, it’s taking the human out of this and the importance of the relationship”. How do you reconcile that part of your job is to put a screen in front of that customer, not another human?

Mary Kate Loftus:

That’s a great question. I think that’s often how people might perceive it at first and that’s completely not what it is when it’s done right. And I believe, especially for regional banks, like M&T, it is about your presence in the community, the relationship, and what digital does is digital accelerates and simplifies your life. It helps you get the information you need quickly. It puts everything at your fingertips.

Mary Kate Loftus:

It might give you solutions that you’re almost afraid to talk to someone at the bank about yet. And then you get the confidence, you get the information you need. And I believe that we see in the data that even for digital originations, our most accounts that actually turn into relationships are often the ones that have a person involved in them too.

Jason Henrichs:

Oh, interesting. How are you measuring that? How do you get that crossover? That sounds hard.

Mary Kate Loftus:

Yeah. How we can measure it is, when you look at the originations and then you’re able to see, you follow the contact through and you’re able to see, did the person have an appointment with somebody? We actually use Clickback. So Clickback tells us that journey mapping that you’re able to see when trace back, who talked to the customer, and then you can pull the analytics behind it to get the measures on the relationship that turned profitable. 

Mary Kate Loftus:

So what we’ve been doing lately, it’s interesting is now with branches having more capacity because there’s less people walking in, we’ve ramped up our digital onboarding. So accounts that are open online, having bankers call them and say, “Hi, I’m here. How can I help you?” And the customers love it.

Jason Henrichs:

Wow. A call from your bank that isn’t them either trying to sell you something else, or heaven forbid you’re late with something it’s, “I’m here to help,” aspect.

Mary Kate Loftus:

That’s right.

Jason Henrichs:

What other tools have you leaned into it now that we’re in a world and who knows if this is the new normal forever, that you say these are the new digital tools when it comes to expanding and extending our relationship and our capabilities. What other sorts of things you’re looking at or have you deployed?

Mary Kate Loftus:

Yeah, I mean, we’re looking… Like every bank, I’m sure we’re looking at how we take what was already on the digital agenda and accelerating it. So we’re looking at what [inaudible 00:04:33] really could be great partners for us. [inaudible 00:04:35] picture on one side of the spectrum is looking ahead and what we want to be able to create and what experiences we want to bring.

Mary Kate Loftus:

Right now, staring in the present, you look at the tools that are out there. And a good example of what we recently did with MS. So we already had Money Smart out there which helps with aggregation and budgeting and we had a debt payoff calculator, and we saw customers as the started, started logging in more frequently, we were seeing an increase of about 20% in the activity, which is significant. And then we worked with them and we brought a little ahead of schedule their cashflow feature out.

Mary Kate Loftus:

And that allows customers to be able to predict what their balances will be based upon recurring automatic debits and credits that hit the account. And so that’s an example of something that we brought ahead and we said, “Let’s make sure our customers can have access now.” A second example would be, we work with Everfi as well for Money Mentor, we call it. Money Mentor is even the people that are non-customers, so you can go out on mtb.com and [inaudible 00:05:32] be aware, which is the COVID pandemic pages, click on the link in it. And you can go through all the information out there. So people who need advice or just don’t know what to do, they’re able to get that.

Jason Henrichs:

What are you hearing from customers in response to this? Are you getting any feedback on this already?

Mary Kate Loftus:

And cashflow. Yes. So what we’re doing, we’re actually starting, we launched it and now we have survey features. We’re using Adobe analytics to be able to track and see where they’re clicking and what they’re doing. But then also we’ve popped up surveys to say, “Why did you click here? What exactly are you looking for?” And I think as we start that, then we’ll go deeper into, we’ll probably use focus groups, then a little bit of ethnographic research and dive in and understand what they’re actually doing to get that feedback. It’s very early. It just launched a week and a half ago. So we’re just getting started there.

Jason Henrichs:

Impressive statistics, nonetheless. I’m curious when it comes to your team and the things you’re doing, how are you actually managing the happiness of your team either right now and the roles they have as they’re dealing with their own stresses?

Mary Kate Loftus:

That’s a great question. It has been unlike anything I’ve ever gone through in my life. And I’m sure like anybody that’s listening is in the same boat. We were lucky that we had, actually, M&T is a very much person to person, you’re in the office, you’re working in your agile scrounging and like people walking the floors sort of environment. Back in January, or actually it was December, we launched Microsoft Teams and everyone started using Teams pretty religiously. 

Mary Kate Loftus:

So we, we had the tools in place. We had Miro, but we probably didn’t use it as often as we are today. Other tools like Trello and of course we got Jira and the NetSuite and all of that. But very quickly, people were able to adjust. So from a ways of working, we got everyone together, everyone had the tools and people loved it. The keys to success, I think are as the leveraging video. So it’s when you’re working from home, making sure everybody’s turning their video on. 

Mary Kate Loftus:

And then amazingly people got comfortable with it really fast. And secondly, I think is regular touch points. When you think about like, you’re asking about how you engage people, so they’re happy and they feel part of everything, even when you’re remote and working from home, we were doing daily touchpoints on video. Then we went to three times a week and now we’re down to twice a week and we have everybody dial in and we talk, we give status updates, communicate transparently, and then people have what they need, this foundation so that they can go do their work.

Jason Henrichs:

Yeah. I wonder if this is not going to be the tipping point, finally, for collaboration that CSOs can no longer say no to Slack and to Teams. And this idea of collaboration does not mean everyone needs to be around in the same conference room table.

Mary Kate Loftus:

I think you’re right. And I think it’s one of these things where you have to do it to learn it and believe it. And probably the right answer is a balance, in the middle. It’s about just like thinking. It’s about human to human relationships and trust. But you can do that remote. You can do that online.

Jason Henrichs:

Yeah. How many cat memes are getting passed around related to-

Mary Kate Loftus:

[inaudible 00:08:41] Like in our group, we have an employee engagement committee and so they’re able to do the fun things. There’s a lot of mocktail and cocktail recipes and things like that going around too.

Jason Henrichs:

And it’s funny, it should, at Park Street, we were early adopters of Yammer, which was purchased by Microsoft, which became part of Teams. And I had mandated, because the whole idea was we had people working various hours and remotely, even before that became a super popular thing. Keep in mind, this is 2010 that we had rolled it out. No one was using it for the virtual standup. We were trying to do asynchronous standup. It was this beautiful idea, people could be where they wanted to do what they wanted.

Jason Henrichs:

Would you believe the first thing that took off and the only thing that took off was people posting cat memes? Someone had created a channel called cat memes. And I was furious. But interestingly enough, that became the thing that got people going to it repeatedly. That was the behavioral change that needed to tip that, only after a week of people doing nothing but cat memes to tick me off. And yes, for a senior producer, our audio team, I did resist swearing. So it didn’t have to be edited out, but I was furious. Right? Cat memes. But it changed the behavior that they got used to using it. 

Mary Kate Loftus:

It did. 

Jason Henrichs:

Yeah. 

Mary Kate Loftus:

You gotta have fun at work. I think that’s a big part of it. And just because you’re not face to face sitting next to each other doesn’t mean you’re not going to have fun anymore. And I think people that’s part of creating an engaged workforce and happy culture.

Jason Henrichs:

What else have you found that behaviors have changed? Let’s start within the bank. Let’s go back to the customers in terms of behavioral change. What else have you seen that this has brought about, either positive or negative in terms of behavior change?

Mary Kate Loftus:

We definitely saw the, we’ll call it the slow adopters to digital, opening their mind and saying, “I think I need to figure this out.” I always think of digital activity from a customer perspective in three buckets. So the first being, are they enrolled? The second being, are they active? And the third being, are they engaged? So we did start to see, and it ramps up through that first direct deposits that hit for the Cares Act, and it really just built, built and built. 

Mary Kate Loftus:

And then we saw people signing up. We saw them logging in to check their balance. Too early to say it’s a sustained behavior change. But we are seeing people that had not used digital channels before, using digital channels to do mobile check deposits, transfers, bill pay, that was a big one. A lot of bill activity, we’ve seen an increase in that as well.

Jason Henrichs:

I’m curious, we’ve heard this from several banks that increased Zelle activity. What are they replacing with Zelle activity? Like were they handing cash to people? Are we talking business Zelle or are we talking to consumer Zelle? What are people doing differently? It’s coming from somewhere.

Mary Kate Loftus:

I think it it’s consumer Zelle, and what they are doing is moving money to their friends. I feel like now that they’ve logged in and they didn’t really realize that tool was there available to them and now they’re taking advantage of it.

Jason Henrichs:

Interesting. Do you think these behaviors are going to stick for the longterm? One of the things we look at is Instacart just had a huge number of signups in the over 60 crowd. They’d had some press around that. And I think it will be interesting to say, “Hey, if you’re over 60 and you’ve now realized groceries can come to your doorstep for a small incremental amount.” is that behavior change gonna stick? How are you thinking about it as M&T in terms of behavior change and what does digital begin to look like within the scope of your consumer’s life?

Mary Kate Loftus:

That’s a great question. You think about the breadth of customers whose needs we meet. So it’s everything from people that are just entering the banking system, break through every life stage to our wisest customers [inaudible 00:12:33]. Everyone has different needs. I do believe, we have the early indication that people are starting, once they’ve learned how to log in, learn how to do the mobile app, they do become comfortable.

Mary Kate Loftus:

Tying it back to your question about person, to person in digital, for many people who did not trust using digital means to move their money or to manage their accounts. Once they had a walk through, whether it’s through a branch banker, our contact center, our digital teams in the contact center had very extended whole time because they were walking people through what to do. Once they felt comfortable, I believe some of those basic transactions they’ll continue to do. 

Mary Kate Loftus:

What we’re hearing from our customers is that as the branches are opened up again, as they feel safe, that’s a big part of that, that they love the relationship with their community bankers, the ones that especially look to them for advice and guidance. They want that validation of the decision. So I believe that they will start to get information online, validate it with a person that they trust. And that’s a lot of simple transactions will go digital and more complex for those customers that are moving along and evolving, their behaviors will still continue to do person to person.

Jason Henrichs:

Well, and that brings us full circle to the happiness theme, again. How do you tie back with these new behaviors, this happiness loop? I guess maybe one of the foundational questions, how important is it, do you think, that bankers are happy in the job of being a banker? It’s different than some other things. You don’t often think of, if you were to say rate, who do you think is the happiest person? Probably bartenders and baristas are always at the top and bankers, probably not in the top five?

Mary Kate Loftus:

[crosstalk 00:14:17] I think what it is, is that it’s, it’s this… I’ve read some books, [inaudible 00:14:22] about, what happiness really is. And it’s about when you feel that you have purpose and meaning. When you’re engaged, you feel like you’re part of something. You belong. And what’s happened recently. And you think about what happened with PPP. We use digital capabilities to take the applications in, then you had, and I can tell you a little bit about that if you want to hear about it, but then you had… It was backed up with 2000 employees who had to actually assist helping customers, making sure the documentation was good, reviewing applications for credit quality. 

Mary Kate Loftus:

And what that did was when they heard back from that customer, who they were able to keep the doors open and said, “Wow, you’ve changed my life. Thank you for helping me get through this.” That created meaning. That created, I believe, a bond that will not be broken. And when you have that, you feel happy. You say, “I can’t wait to come in.” And I think that’s my, you probably heard it from every bank. People that were working exceptionally long hours sacrificing a personal time because they believed in what they were doing. 

Mary Kate Loftus:

I think that that will continue. I think it’s renewed the industry. And I think that this new connection where especially going into the next 12 to 18 months, it brings the importance of banks to be able to help the people in the community, rises. And it just gives everyone a real deep meaning. And when you have meaning and you’re happy. I think it’s actually the very important turning point in our industry, I think.

Jason Henrichs:

Yeah. I agree with you. Circa 2008, there was some research done around public perception of various jobs. And it turns out that bankers rated below used car salespeople in terms of perception, in terms of public trust. And I think we’re at a turning point for that to change. And I also think back to your theme of the digital extends it, not replaces it, that’s going to become more important.

Jason Henrichs:

When was the last time you had like true surprise and delight when it came to a digital feature? But not one that you put out where you’re like, “I was surprised and delighted because I’m the one who got it done.” But what does it take? First give us an example. Let’s talk about what it takes to bring surprise and delight into a feature.

Mary Kate Loftus:

I think about, it could be as easy as a servicing function that you don’t have a lot of times, let’s say you have something you have to do. And you know, “Oh gosh, this process could be painful and I’m going to have to go to the bank.” And an example would be, we’re doing a lot of work now with DocuSign and there’s teams that are saying, “All right, the branches are closed. We can’t come in. We used to do it this way. What’s the most efficient way to do it?” 

Mary Kate Loftus:

Although they don’t seem like they’re not gonna have a headline, to a real customer, those are meaningful. But in terms of real surprise and delight, I think about at the beginning I was telling you about goals and how for a customer, the purpose that we serve is we help customers achieve their goals. And when it’s setting, for example, if you say, “When all this pandemic’s over, I’m going on a trip and I want to set aside that $5,000 I need to be able to do it.” 

Mary Kate Loftus:

And when we’re able to help them do that, that is meaningful. That helps somebody do something that they weren’t able to otherwise do. I think that’s important. One last thing I do have to say from a business banking perspective, everything that just happened right now with the last few weeks, surprise and delight was when people are worried and they’re saying, “Can I actually get this money? I know people are relying upon me to get it.” 

Mary Kate Loftus:

And when they’re banker’s calling them at 11:00 o’clock at night saying, “I need more thing, we got this in, it’s all set. Don’t worry. We got you.” Again, that has real impact on people’s lives. I think that that is surprise and delight. And that’s meaningful surprise and delight.

Jason Henrichs:

And that definitely imbues meeting. And the idea of you mentioned MX and the cashflow predictor, that brings rural meeting, especially now. Do you have other, either internal tech or partnerships you’ve done with FinTech providers that kind of lean into that idea of either goals or some of the other themes you said that give meaning?

Mary Kate Loftus:

Well, it’s interesting. I can’t share like the specific capabilities and things we’re doing. What we are working on is, and I think you and I had talked about this back in February, was that we’re working on… We sort everything by the customer. So we have segments of customers and customers that we deeply focused on. And what we’re doing is we’ve started the work, luckily, back months and months ago, to listen to them, to observe them in their homes, observe them when they’re at work and say, “How are you using these banking tools?” 

Mary Kate Loftus:

And from there, we’re able to say, “This is the unmet need. This is the need that nobody is selling right now.” And this might even be something that the customer isn’t even asking us for, but this is something M&T can give them that they never expected. So what we’re doing from two fronts, is we’ve got our teams that are working on, what does that look like? What can that look like? 

Mary Kate Loftus:

We’ve got our technology and digital teams saying, “If we know we will want to create and deliver these experiences and the financial ecosystem of the customer, how do we get ready?” And that’s when we have the right platforms in place. That’s when we were ready to deal with APIs. Because we want to be, in some cases, co-creating with FinTech, co-creating with people that live and breathe these experiences to be able to bring them to life for our customers. So, although I can’t share anything and say, “This is it,” I can tell you that there is an awful lot that we’re working on and we’re hoping to be able to bring to market in not too long.

Jason Henrichs:

Well, and it’s great to hear, because it’s the one place I think the FinTech startups had a huge advantage, was starting with a clean slate, which the clean slate also means I have no customers, no one paying me no existing business. They had to go figure out really quickly what their customers had as an unmet need. And our customers do a horrible job of telling us that. But if you have an existing business, like people are opening checking accounts, taking loans and doing those things, it’s really hard to say, “Well, clearly something is working because they’re doing it. Let’s go find some other level of surprise and delight.” Culturally, was that hard to imbue this idea? “We’ve got to get out of the branch, out of our four walls and get out. We have to listen to them. It’s not, we know best?”

Mary Kate Loftus:

People were so hungry to do it. So this has been going on now for, I’d say about two and a half years at the bank. And the way that we approach it is saying, we have to run our businesses and we have to do it very well. But we also have to get out and we have to be untethered. We have to talk to other people in the industry and see what’s going on. We have to talk to other partners and imagine, and we have to most importantly, be out with our customers and out in our markets. 

Mary Kate Loftus:

So people love it. It energizes them. And that turning effect, to your happy comment, and how do you create a happy workforce and engaged thinkers that love what they’re doing? That’s how you do it. You allow people to not have to work according to, I’ll say bank orthodoxy. And instead, you’re able to imagine what’s possible that re-energizes people and it helps them do the best work of their lives. So there’s a lot of cool stuff like that, that’s going on.

Jason Henrichs:

All right. Last question, before we go to break, what’s the last thing you did that made you happy?

Mary Kate Loftus:

Oh, easy. I was outside visiting with my kids at lunchtime because I’m working from home and I get to see him every day during the day.

Jason Henrichs:

Oh, fantastic. So time for a short break right now. When we come back talking to a community banker that is an online, only bank that also develops deep relationship with a very specific segment and this deep expertise coming actually out of one of the more interesting places, hurricane Katrina and what it meant to be serving customers in an environment like that. Thank you very much, Mary Kate, for joining us from M&T bank and look forward to hearing many more happy things from you.

Mary Kate Loftus:

Oh, thanks, Jason. I had a great time.

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Jason Henrichs:

Welcome back to Breaking Banks. I have Curt Queyrouze, the CEO of Tab bank. I’ve been fortunate to know Curt for very long time. They’re one of our founding banks at [inaudible 00:23:35] Alliance. We also have spoken at many industry events together, and one thing I do know is Curt is very passionate about what he does. It doesn’t come across, he’s a pretty mellow guy [crosstalk 00:23:53] face on it. But he loves being a banker. I’m curious, how did you end up becoming a banker?

Curt Queyrouze:

Hello, Jason? Yeah, I am passionate about it. I’ll agree. I’ll admit that. I ended up becoming a banker because actually my dad was a banker. He was a president of a small bank, 60 million in assets in New Orleans, where I grew up. And I ended up becoming a banker because when I was in college, I was studying accounting and getting an accounting degree. My dad said it in very clear terms to me, “Whatever you do, son, don’t become a banker.”

Curt Queyrouze:

And so that really-

Jason Henrichs:

[crosstalk 00:24:28] active rebellion? [inaudible 00:24:30] active rebellion. Good for you. 

Curt Queyrouze:

That’s right. Exactly. So that’s how I became a banker. It was interesting because my dad died when I was 30, so a long time ago. And when I went to the funeral, I was just amazed. Now here’s a little $60 million bank and there were 400 plus people at my dad’s funeral. And I’m like, “Who are all these people?” And then people were getting up with a fuse of praise from my dad, and it was like, there was a man there that I didn’t even know in the community that made a big impact to a lot of people. So actually, yes, it was an active rebellion, but there was a better part to the story. I was inspired by him.

Jason Henrichs:

Well, knowing that your dad was a banker, I always had this image that you as the sixth grader, were drawing pictures, other kids who are going to be a cowboy or fireman. And there was Curt drawing, I’m going to be a banker. That theme about your dad and what he did in the role they play, being so important to him, that man, you really didn’t know. Even though you say you’re passionate about it, would you say you love being a banker? 

Curt Queyrouze:

Totally. Yeah. 

Jason Henrichs:

Yes. Why?

Curt Queyrouze:

It’s interesting, because I think some of that evolved. Early in my career in the early 80s, there was a lot of rebellion. There was lot, “I’m going to show you dad, I’m going to be a better bank than you ever were.” So there was a lot of that. And I went to work for what at the time was one of the largest banks in the country in Dallas. And so there was very much a kind of I wanted to adhere to what the bank was all about. Follow the rules, be a model employee, do all those things. Be a captain of high finance. 

Curt Queyrouze:

And there was something that had happened to the very first kind of economic crisis in the mid, late 80s that I experienced in watching people on the other end of the banking relationship suffer. And and it wasn’t something I think I was prepared for. And so I watched a lot of different behaviors. I watched people who were scoundrels and went to prison and I watched people who sacrificed everything for their business and their employees and their families to make things right. 

Curt Queyrouze:

And there’s maybe somewhat of an inflection point there that I realized that there was an opportunity to actually support those people that are doing the right things. And banks are critical to the economy. And had banks not been able to stand up and support people during that, then they wouldn’t have survived. And if every line we took was a hard line, then you’re taking away the opportunity for the best people to shine. 

Curt Queyrouze:

It wasn’t that clear to me at the points of time, it just seemed like a lot of struggle during that period. But as time went on, that’s the kind of thing that sunk into me. And I watched more and more entrepreneurs and fascinated to watch success. Success comes in all kinds of shapes and sizes, right? There’s no formula. There’s quiet people, there’s boisterous and all kinds of entrepreneurs. And that there’s kind of some tenets of doing the right thing that always sticks there and they can kind of figure that out.

Jason Henrichs:

Interesting you bring up the entrepreneurs. Because if someone were to meet you on the street, there’s some bankers you can see from across the room. “There’s like, you are clearly a banker. Your shoes are very shiny. It looks like you sleep in khaki pants and a polo.” But to see you across the room, I think most people would guess you are actually some kind of technologist. Skinny jeans, cool shirts, the clothes, crop beard, cool glasses. And I guess it’s true why you love being a banker, you are very much a techie. And Tab is very tech driven given that you have national reach, but a single branch. That you don’t even take deposits in. And you talk to FinTechs all the time. It’s very rare, I think that you and I have a conversation that you don’t at least bring up one FinTech that I haven’t even heard of yet, which always amazes me. Do you think there’s a difference in the sorts of passion between banks and FinTechs?

Curt Queyrouze:

That’s an interesting question. First, thanks for that very high compliment, I guess. I think there is, but not in broad based. I think in some ways, let’s be honest, there’s a group of bankers who like the prestige that comes with the position and being able to be a pillar of the community and hang out and are in the nicest country club around. There’s certainly some segment of that. And there’s also the big, the wall street banks and the images that they had in a community. 

Curt Queyrouze:

So there’s part of the industry that’s stuck. But there’s also this enormous amount of the banking industry that is very passionate about the new ways, the new opportunities in front of us. And I think in the FinTech side, there’s a similar split. It’s just different. There are a number of FinTechs that are out there looking for the quick payoff and the quick buck. And they build something fast, and they scale something fast and flip it. 

Curt Queyrouze:

But then there’s this whole other segment of FinTech that’s looking out for, “What can we build it durable and long lasting and it’s going to impact the way we do things, not just now, but for the future, forever.” And I think when you go to these massive kind of FinTech conferences and such, it’s really interesting, because you can kind of… If you been to enough, and you have certainly Jason, you get to start to be able to segment and both sides. Who are opportunists that are looking for the quick dollar and who are the ones that are really passionate about fundamental change in how we do things. Where is that magic kind of sauce.

Jason Henrichs:

When you’re partnering with FinTechs, how do you test for that? Because I know you’ve told me before that alignment of values is really important when you’re partnering with a FinTech. And I’m hearing you say that’s different when it’s you acting as a bank for them versus if you’re looking at using them internally. But this idea of values, how do you test that kind of alignment?

Curt Queyrouze:

It’s interesting. I don’t know if there’s a clear formula. We do everything from FinTechs as just vendors, all the way to sponsoring and partnering deeply with some FinTechs. And the closer we get to the partnership we do in some of the very early conversations, if not the very first conversation, it’s we ask the executives to tell us, what is your mission statement? What are your values? What are you trying to accomplish for the customer? Tell us about it. Open-ended.

Curt Queyrouze:

Then we just kind of continue that conversation. And ultimately there’s a point where the founder is going to reveal really what’s going on. We give them enough time to talk about their business, you’re going to kind of get a sense of what they’re in it for. And it’s tough. Because sometimes the ones that are passionate about doing the right thing are these really impactful kind of consumer driven banking, the underbanked or unbanked and things of that nature have the riskiest business models. 

Curt Queyrouze:

And when you’re in your heart, you really want to reach out and you want to do that with them, even though the chances of success might be really minimal. And that’s hard. Because as a bank you have a fiduciary responsibility. So somewhere in that mix, you’ve got to make your best guess and take risks. We’re risk takers. And so we try to be organized and disciplined about it, but actually [inaudible 00:32:09] too. 

Jason Henrichs:

You’ve been building these tech partnerships and you’re implementing more technology. Does that change how you start to think about your customers? And along which dimensions?

Curt Queyrouze:

I think it does change, because I think if you sit there long enough… Certainly there’s innovation all around us right now happening. And you can almost like going down a buffet line. You can pick and choose a bunch of different things and cobble them together and have something very cool. But fundamentally, and through a fire process or something similar to that, you start to get into jobs to be done. 

Curt Queyrouze:

And you start thinking about what’s the simplest cheapest, most efficient way to help a customer solve that job that they need done. And when you get into that realm and you’re thinking about completely different ways to align processes or resources or functionality, that’s where your thinking, you have the potential, we hit gold. Everything’s a hypothesis though, until it’s tested. Right? You taught me that.

Jason Henrichs:

Well, you guys have done a phenomenal job at embracing the idea of test and learn. Have you brought more tech and more test and learn into the business? Has there been any pitfalls?

Curt Queyrouze:

Yeah. A lot. And it’s reading a lot of interesting things in the last few weeks about the concept of failing fast. And failure’s not an option or is an option. And you’ve been in this dialogue and it’s, how do you get a culture change around, especially in banking, around making mistakes and mistakes are okay, but maybe failure’s not okay. Maybe we’d need to get rid of that term fail fast, because we want to keep on a path to success. 

Curt Queyrouze:

Nothing inspires your teams more than winning. So if you have a long goal, that’s hard for them to visualize, but you kind of give them some pathways towards that goal and they can win or stumble and get back up and win quickly after that. That’s where you keep the engagement and excitement going. 

Curt Queyrouze:

And so one of the biggest pitfalls I think is, you have to say no, or you have to let go of things that people put a lot of effort into. We recently had two good examples, but they end up with very positive outcomes. One was partner, we worked for a year on that partnership. And then in the end, there was a culture and values problem that came up. And after your work, we terminated that one. 

Curt Queyrouze:

And it was tough for the team. It was the team that stood up and pointed it out to us. And so at that level we think we were doing some things right, because they raised their hand and said, “We’re kind of concerned about this.” And we decided not to go for it. So a lot of resource. I don’t consider that a failure. I think that’s a valuable pivot. 

Curt Queyrouze:

And we just recently had another one. Working on 15 months on another major potential partnership. And this one kind of got sideways simply because of what’s going on with the economy right now kind of made the economics change on us. There was no fault of either party. And those are tough things. You’re asking people to step up and work extremely hard, put a lot of resources and a lot of their own passion and sweat equity into things.

Curt Queyrouze:

And you’re having to say no and pivot away from things. And they don’t have the right culture and you’re not able to kind of move on to the next quick win, if you’re not constantly have the queue filling up with opportunity. I think that could be pretty devastating. So yeah, it’s been tough.

Jason Henrichs:

The cultural ramifications of idea and tech, it comes up quietly the theme, but repeatedly that I think it’s often overlooked, this point you just made around, you don’t want to the motivate people by saying no, but at the same token, sometimes the greatest risk is actually continuing to act as if nothing is wrong. And just continue to make forward progress and hope it’s going to be okay in the end. 

Jason Henrichs:

Given the current world situation, maybe the most dangerous of all is just pretending it will all be okay without intervention. But how have you grown that as a culture? Are you learning some of this from the tech companies you work with? Because that value, at least in the media is much more espoused by the tech driven company versus the traditional banker that values rightness and stayed and systematic, but sound decision making and doesn’t waiver. Those two don’t always seem very compatible.

Curt Queyrouze:

Right. No, that’s a really good point. One of the issues we have in the banking industry is a lot of the training we get over time, causes us to have a mentality to reduce risk down to zero. If you think hard enough about that, that actually would be self-defeating because if you take no risk as a bank, you can’t make money. We make money by taking measured risk. But it is a prevalent culture and it’s reinforced a lot by regulatory regimes and other things. 

Curt Queyrouze:

And so it’s very easy to find a comfortable place in that take no risks kind of culture. And so yes, part of your common question, we’ve learned a lot and tying our culture in with some of the FinTech partners we have, has helped tremendously. One example is we have one of our partners where we have teams working every day together, on small business loans.

Curt Queyrouze:

And so there’s a team on that end, somewhere around 10 people. And we’ve got about seven or eight in our team that work intimately together every day. And when we started some 15 months ago we only have one person on our shop. But as it’s grew and the pace and the creativity and the kind of collaboration, kind of infected a group within our bank with that kind of FinTech energy. 

Curt Queyrouze:

And we point to that and we try to take that little infection, the good infection, right? So it’s the good bacteria that are in here, and spread it around and say, “Look how hard these guys work, but also look how much fun they’re having every day. And look at the impact that we’re having in our customers.” And it takes time. But I think we’ve got a broader feeling that that’s the positive that our employees hang on to and say, “Hey, I know how my piece of the puzzle, what I do every day, fits into the bigger picture of accomplishing this or helping out our customer. And that’s all you need. And it’s just kind of, it happens like a groupie, I guess.

Jason Henrichs:

I’m curious how the people who are infected with the positive sense of that part of the culture. Was there any kind of organ rejection by the rest of the bank when they kind of came back? Well, I guess everyone within Tab pretty much wears jeans and looks… Your bank actually looks like it could be a tech company when you pull up to it and how people interact. But were there any kind of like corporate norms that kind of came out to squash that like, “No, you’re moving too fast, you’re taking too much risks. We can’t do that. We’re a bank. For love of God, we’re a bank. Don’t forget where a bank. Acts like a bank.”

Curt Queyrouze:

Yeah. It’s actually, for us, we’ve evolved over six years, I guess. So the bank, even though we are a single location, internet based bank, and we have been for 21 years, in the early days we were doing things with fax machines and kiosks that were placed in travel centers, truck stops across the country. It was very manual. And the bank went through some turmoil about eight years ago, nine years ago, that was pretty devastating to the staff and the the owners at the time.

Curt Queyrouze:

So we’ve come out of that, we’re not doing the bank. But we had a very isolated culture. We had silos, the typical silos that you find a lot of organizations over [inaudible 00:40:36] that have any age to them. These were pretty bad. In my group, I finished our work and we’re going to take a pile of papers and throw them over the cubicle wall to you guys. And it’s not my problem anymore. And as those walls were broken down, literally, because we did, at some point, we said, “We have to get rid of all these cubicle walls.” 

Curt Queyrouze:

As we did different, interesting things with FinTech partners, there’s a, there’s a point where if you’re sitting at a playground being grumpy, playing with your toys by yourself and you see a lot of kids in the jungle gym having a great time or running on the swings, eventually you’re going to be attracted to kind of roam over there and see what’s going on. And that’s kinda what happened with us. It took a few pockets of winning, of an over excitement and passion. People actually started job hopping into those groups. 

Curt Queyrouze:

We very much encouraged transfers within the bank. 30 to 40% of our staff transfer in a given year to a new role. A new role in a different group. Because we encourage that, people were starting to migrate to these more exciting areas. And eventually it spread. And when we still have pockets of grumpy people hanging around-

Jason Henrichs:

I’m going to bite my tongue and say that it’s like risk and compliance, the grumps, but…

Curt Queyrouze:

I can’t say that wholeheartedly, but there are some grumps. Yes. But no, we’ve got a great compliance team. It’s one of our things I’m most proud of actually. So I can’t say that. But I’ll let you say it. And then maybe it applies to somebody else.

Jason Henrichs:

Closing comments, how important has it become through this cultural change over the last eight years with what banks weathered, how you leverage technology that you are in many ways have always been a FinTech bank. It just happened that tech used to be kiosk and fax machines, but it was the only tech available at the time. How important has a cultural value around only hiring people who are passionate about being a banker been? Is that something you actually test for and bring people onto the team?

Curt Queyrouze:

The interesting thing is that, and even the Utah Bankers Association started a program three years ago. Proud to be a banker, be a banker and just kind of highlighted all the different roles within a bank that aren’t what people visualized. It’s not a customer service rep in a branch. It’s not a teller, et cetera. Because our bank doesn’t have any of those. When we do our proud to be a banker kind of highlights, it’s always showing, here’s our data analysts and our business intelligence people. Here’s our programmers, here’s the software rebuilt. Come look at this cool stuff. 

Curt Queyrouze:

And even our compliance people who are critical in our strategic partnerships with our FinTechs, we export that expertise. And we even promote that it’s cool to be a compliance guy. Because look at all the the fun you have working with these FinTechs and helping them master compliance. And we’re not a very well known bank, but we’re attracting talent from a broad range of places these days. That’s the proof in the pudding, I think. People find kind of what we’re doing interesting. And at our core, we are a bank, but we have challenging work every day. And it doesn’t involve dealing with a line of customers and a teller window by any means.

Jason Henrichs:

Or being forced to wear a suit, standing behind [inaudible 00:44:18] glass of the teller window and not seeing the results of what you do. Culturally being close to Tab bank, has been very cool to see you are very much more of a tech company in that regard than anything else in what you’ve done. 

Jason Henrichs:

So thanks for talking about your passion with the listeners of Breaking Banks. I think we’re at a point in the world where everyone wants to hear some of the good things that are happening in the industry and the people that are helping drive that forward. Curt Queyrouze is the CEO of Tab bank based in Utah. They serve national footprint in the US and he’s definitely a proud tech geek banker who loves what he does.

Curt Queyrouze:

Thanks very much. Jason, always great to talk.

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