Allan Rayson’s zest for banking and innovation can be summed up by his Peloton screen name: Finov8r.
But he didn’t always see himself sticking with banking for his career. When Rayson began his first job shortly before the dot-com bust, technological innovation in the industry was sluggish.
“The internet was only starting to become relevant, cloud computing didn’t exist, the iPhone hadn’t come out yet and so much of what has been driving digital innovation wasn’t even a thought, like fintech,” he said.
Now digital transformation is his full-time job. The chief innovation officer and chief technology officer of Encore Bank, headquartered in Little Rock, Arkansas, was hired in October 2020 to run technology at Encore and launch the privately held bank in the Austin, Texas, market.
The commercially focused Encore had a digital and “branch-lite” focus from the start, when the founders rebranded and recapitalized it from Capital Bank in Little Rock in 2019. There are currently nine full-service branches, yet Encore operates in 19 markets across nine states. That makes the bank’s technology choices and Rayson’s job all the more important since that is what will draw customers in and keep them.
“We are not trying to be the biggest bank in every market,” said Rayson, who built Encore’s technology stack from the ground up in 2021. “We are trying to deliver the best experience in every market.”
The bank has grown considerably in three years, despite its small brick-and-mortar presence. It went from $159 million of assets and seven employees in 2019 to $1.8 billion of assets and about 250 employees as of the first quarter. Arkansas Business, a newspaper, named Encore the city’s fastest-growing bank by asset growth between 2020 and 2021. Meanwhile, Keefe, Bruyette & Woods analyzed data collected from S&P Global Market Intelligence in April and found that among U.S. banks with total assets exceeding $750 million, Encore has had the fastest organic growth.
“They have a very clear sense of who they are and who they are trying to serve,” said Carey Ransom, the managing director of BankTech Ventures, a venture capital fund with banks as limited partners. “If they want to go into a new market or pursue a new opportunity, they just do it.”
As for Rayson specifically, “I feel like he is the lead barometer of the organization,” Ransom said. “He is pretty clear about, are we going to make money doing this, have we done our homework necessary to make a decision. But I don’t view him as the type who is analysis paralysis.”
Rayson is reluctant to claim credit for Encore’s technological accomplishments and is quick to say that it’s a team effort. In fact, employees all wear navy blue rubber bracelets imprinted with the phrase “We Win Together.”
“My approach to leadership is trying to identify people who have no ceiling to what they can accomplish and put them in the right places to do that,” he said.
For transforming Encore into a digital-first, fast-growing bank over the course of 2021, Rayson is American Banker’s Digital Banker of the Year.
“Allan is a visionary,” said Burt Hicks, a co-founder of Encore and the chief strategy and growth officer. “He is always challenging us to think outside the box and think about future trends, our expectations of our clients today and what they will be in the future.”
Blank slate
Rayson’s mother was a nurse in the Navy, so the family spent periods living up and down the East Coast of the U.S. as well as in Okinawa, Japan.
“When you are moving around every 36 months, which is what military families do, you learn to adapt to whatever situation you are in, whatever circumstances you’re in,” he said. “That’s a big part of being successful in life and business.”
Rayson attended Texas Tech University in Lubbock for his undergraduate degree in marketing and his MBA in finance. His banking career began upon graduation, when he became an analyst at Comerica in Dallas in 2001.
“I’m not sure I saw myself staying in banking my entire career,” Rayson said. “At the time it was kind of a sleepy industry that was not evolving very quickly.”
Still, the satisfaction of helping entrepreneurs solve problems kept him going. He floated between roles in corporate banking and private wealth management at the Bank of Texas in Dallas, commercial banking at BBVA Compass in Austin, and strengthening the commercial and specialty finance businesses for Regions Bank in Central Texas.
In between, he became an entrepreneur himself. In 2014 he co-founded PaidUp, an accounts receivable platform based in Austin for youth sports clubs. When his oldest son started playing club baseball, Rayson realized the organization’s method for collecting payments was paper-based and inefficient.
“No one was using the word ‘fintech’ at the time, but that is what we were building,” he said.
The business closed in late 2019, despite attracting 40 clients including volleyball, baseball and soccer clubs. It was too expensive to keep operating, Rayson said, but, “I would not trade the experience, because I learned a lot about tech, software development and running a business, which informs much of what I am doing today.”
Encore’s three co-founders, Chris Roberts, Phillip Jett and Hicks, approached Rayson in September 2020 after former colleagues spoke highly of him.
“We have big dreams of what we can do with fintech,” Hicks said. “Allan bought into that.”
The enthusiasm was mutual.
“Ultimately, I really wanted to be doing what I am doing now,” Rayson said. “I love early-stage, I love startups. To build something from scratch is a very unique opportunity, especially in technology. It’s not that often you get a blank slate to work from.”
Encore Bank has an unusual model: It recruits 100 to 150 private investors in each major metropolitan market it enters to invest in its capital raise. Encore focuses on banking them and clients they refer, which means the investor-customers all have a concrete interest in the bank’s success. Most employees are shareholders in the bank as well.
“It’s a great seeding strategy for a new market,” Ransom said. “They benefit as those early owners and customers.”
Gaining momentum
In 2021, the pace at Encore was anything but sleepy.
Rayson and his colleagues began working with relatively young fintech vendors, so they can grow and evolve with the bank. Rayson and his team prize the opportunity to start from scratch, without the burden of outdated technology.
Encore had chosen Smiley Technologies for its core banking software before Rayson joined the company. But this decision has panned out since Smiley helps the bank integrate new technologies quickly, Rayson said. Besides Smiley, Encore works with a number of other vendors, including Hawthorn River for its loan operation system. Compliance Systems helps with digital documents, including the company’s Simplicity Mobile product that delivers compliance documents on mobile devices. The bank turned to Mantl for speedy digital account opening and ZSuite Technologies for its digital escrow and subaccounting product, ZEscrow. It’s also working with CollateralEdge, a company that helps community and regional banks strengthen the credit profiles on individual corporate loans. All except Smiley were implemented in 2021 or early 2022.
Rayson and his colleagues also weigh how these technologies can interact. They embedded Compliance Systems’ technology into Hawthorn River’s loan operating system to ensure a commercial business could complete a loan end to end digitally.
Ransom says digitizing the complexities of commercial banking is a feat.
“Even things as ‘simple’ as online account opening of business accounts are still very nascent,” said Ransom, who noted that some of the most progressive commercial banks still struggle with online account openings for businesses.
Now, Rayson’s focus is upgrading Encore’s treasury technology, with digitized account opening, onboarding and payments. This undertaking is one example of how Rayson challenges his colleagues to think differently.
“Allan asked us to step back, even though it’s a high-priority project,” Hicks said. “He wanted us to make sure that one, we are scouring the universe for the right partner, not just for who the top players are today but who are the up-and-coming players. And two,” to think about “how are we going to integrate this inside the bank. He is thinking about the architecture on the technology side.”
Rayson hopes to have commercial digital account opening and digital onboarding for commercial treasury in place by the middle of 2023. It will resolve the major limitation at present for customers wanting to complete any banking task online.
Still, he says there is more Encore can do to support its customers in banking the way they want.
“I think we are just getting started,” Rayson said.
