TokenEx grows in OKC, offers tech that protects sensitive information through ‘tokenization’

Alex Pezold standing in front of a display of awards Token Ex has won, including the 2016 Metro 50 award.

Sensitive information from a virtual Who’s Who of corporate leaders has been publicly exposed in recent years through high-profile data breaches. Microsoft, Estée Lauder, Facebook, Instagram, Barnes & Noble to name a few.

Billions of records plundered, and that’s just in 2020, according to Security magazine.

As an industry-leading cybersecurity firm, Greater OKC Chamber member TokenEx developed technology that renders data useless to thieves who hack into large databases. It’s called tokenization.

The Oklahoma City-based company developed proprietary tokenization technology that “desensitizes” critical information by replacing it with tokenized placeholders that have no relation to the original inputs.

So, the data has no value if it falls into the wrong hands.

“If you are a hacker and you steal a database full of information and all of it is credit card information, that’s going to be valuable to you; you can sell that on the dark web,” said TokenEx co-founder and CEO Alex Pezold. “However, if you steal a whole bunch of tokenized data that’s non-sensitive and doesn’t provide any value, then you haven’t hurt the company that was breached, and you have no value in the data.”

TokenEx was founded by Pezold and co-founder Jerald Dawkins in 2010 just as stringent new data security compliance standards were being implemented for the payment card industry. The co-founders are both graduates of the cybersecurity program at the University of Tulsa.

“You can't find anything better than Oklahoma City, as far as the people, location and office space, as well as the commitment back to technology in the area. What we found is that Oklahoma City is very technology-forward."

“We’re born and bred out of data security and data protection compliance,” Pezold said.  “We’ve developed a cloud-based data protection platform.”

TokenEx protects sensitive data like that used in payment card transactions, bank account information, patient health information and Social Security numbers for clients across the world.

With billions of records from database breaches exposed annually, there is plenty of incentive to take steps to proactively protect sensitive data.

Yet, there is often a costly hesitation.

“Indecision is a decision,” Pezold said. “We’ve seen four or five different companies decide to focus on other areas after looking at TokenEx for data protection, only to suffer massive breaches 6-12 months later. So, our message is very simple: Investing in cybersecurity, even in a down economy, is critically important.”

The cost to companies that haven’t taken steps to secure their data can be both in tarnished image and bottom-line costs.

“If you have a significant data breach, it's going to cost you millions upon millions of dollars to recover, so data protection should be prioritized at the top,” Pezold said. “It should be a board-level topic. It should be, in my humble opinion, a priority or a project that gets prioritized above anything else at this point because data breaches aren't going away; they only continue to multiply.”

Today, TokenEx employs 55 people and operates out of a suite of offices in northwest Oklahoma City. It competes against not only companies located on both coasts that specialize in data protection but card payment processors, as well.

All of this growth in a highly specialized industry was created right here in Oklahoma City.  

TokenEx distinguishes itself in the cybersecurity industry by the extensive number of certifications it holds.

Watch: TokenEx is 2016's #1 Metro 50 honoree

“When we were constructing TokenEx, what we committed to was making sure that we were going through all the industry audits and certifications and accreditations that a company like TokenEx would need,” Pezold said.  “So, if you look at TokenEx compared to our competitors, we were probably one of the more audited and assessed groups because of the data that we handle.”

The company’s record of the last decade has been that of substantial growth both in terms of revenue and employment.

In fact, TokenEx was the No. 1-ranked firm in the Greater Oklahoma City Chamber’s 2016 Metro 50 ranking of private companies in the Oklahoma City area.

“What keeps us in Oklahoma City is the community. We have a fantastic community around us that supports us, and they’ve supported us since day one.”

“I tell them it’s a fantastic place. It’s a city that’s not only vast in resources, but has made commitments through the MAPS project to modernize and to continue development through a commitment to technology, commitment to modernization, commitment to rejuvenation. That’s what you are seeing here in Oklahoma City.”

All of this growth in a highly specialized industry was created right here in Oklahoma City.  

And Pezold wouldn’t have it any other way.

Both Alex Pezold and his wife, Stacey, have been deeply involved in building landmark Oklahoma City businesses. Stacey is a former long-time employee at human resources technology giant, Paycom, where she held several executive positions, including that of chief operating officer.

“You can't find anything better than Oklahoma City, as far as the people, location and office space, as well as the commitment back to technology in the area,” he said. “What we found is that Oklahoma City is very technology forward. We’re proud of our roots in oil and gas and with biotech, but technology has to be a part of Oklahoma City forwarding itself within the United States.

“What keeps us in Oklahoma City is the community,” he said. “We have a fantastic community around us that supports us, and they’ve supported us since day one.”

Pezold cites his company’s positive experience with what has become known as the Oklahoma Innovation Model through the Oklahoma Center for the Advancement of Science and Technology (OCAST) and its partner firm, i2E, Inc.

TokenEx developed an early tokenization technology with help of OCAST’s Oklahoma Applied Research Support program, as well as funding from i2E through the OCAST Technology Business Finance Program.

“Look at the commitment Oklahoma City has made to technology with the different incubators and the different venture capital, seed capital, i2E, OCAST and STEM resources that are available here,” he said.

So, all that leads Pezold to pitch OKC whenever he’s traveling and meeting people who may be unfamiliar with all that Oklahoma City has to offer a business.

“I tell them it’s a fantastic place,” he said. “It’s a city that’s not only vast in resources, but has made commitments through the MAPS project to modernize and to continue development through a commitment to technology, commitment to modernization, commitment to rejuvenation. That’s what you are seeing here in Oklahoma City.”

Pezold concluded a recent interview by escorting me through the TokenEx suite of offices in the Port 164 office complex. It employs a broad range of skillsets that include software engineering specialists, sales, marketing, development, operations and financial among them.

“Looking at what we've built and the number of employees that we have, I didn't think that we would be as big as we are, particularly from a revenue-generation standpoint,” he said. “Watching what we've been able to do and where we're going has been pretty remarkable.

“We have a wonderful team at TokenEx.”