Leveraging Communications Data as an Enterprise Strategic Asset
Electronic communications are undergoing a period of massive innovation and transformation. How people communicate has changed more in the past 20 years than the entire century before with the advent of remote work, high-speed internet, and innovative communications and workstream collaboration platforms, like Zoom, Slack, and Microsoft Teams. As a result, the workforce is more distributed and digitally connected than ever before.
“When we used to think of work, we thought of commuting to an office with managers who could simply ‘supervise’ their employees by walking around,” said Goutam Nadella, Chief Product Officer at Smarsh. “In many ways, we’ve traded a physical commute for a digital one. More people are working remotely and using a growing number of unmonitored digital channels, which has created more regulatory and reputational risk. It has become imperative to provide a comprehensive solution that can analyze and understand the increasing deluge of data to provide insights that help protect companies and their customers.”
The result of hybrid and remote work is a massive uptick in communications data generation, by all measures – volume, variety and velocity of data have all increased significantly. What was previously a passing hallway conversation is now stored in the permanent record of corporate communications. These changes have profound implications on corporate responsibility, legal and discovery risks, and the operational viabilities of compliance programs.
“As an industry, we need to evolve, said Nadella. “Communications are a strategic asset for any company and warrant a comprehensive communications data strategy. Organisations can either invest in a comprehensive strategy to manage the risk inherent in the exploding volume and variety of electronic communications or fall behind. This divide will likely manifest across various aspects of a company in the years to come. While ESG is making significant headway in many regards, corporate culture and negative surprises are a black box. We believe that there’s an opportunity to use technology for good to surface these sorts of issues to investors sooner and, in doing so, to create more meaningful work environments, better protect companies’ reputations, and strengthen their competitiveness.”
The Era of Communications Intelligence
The historical communications archive focuses on books and records and is ill-suited to meet the new demands of hybrid work. Fortunately, breakthroughs in natural language processing coupled with advances in cloud architecture provide the foundation needed to rise to the challenge. The result is a new market segment we call Communications Intelligence.
Communications Intelligence allows firms to capture, retain, analyze, and act on the “signals” in your communications that are critical to your business. It comprises the strategies and technologies used for the collection and analysis of human communications data, which helps enterprises quickly identify risks, recognize new business opportunities, and improve operational systems.
“The Smarsh Communications Intelligence Platform is a major step forward for regulated organizations, enabling them to illuminate risk and insights across petabytes of electronic communications generated by many different sources,” said Brian Cramer, Chief Executive Officer at Smarsh. “Regulatory scrutiny is only becoming more sophisticated, and data will only continue to grow in volume and complexity. The only way for these organisations to truly take advantage of their communications intelligence at a global scale is with artificial intelligence and the flexibility and performance of the public cloud — two core components of this groundbreaking platform.”
Today these include compliance and brand risks and may extend to include security threats, cultural indicators, untapped revenue opportunities and more. Every company can now fully realise the enormous potential of its electronic communications data. By understanding what is being said in any digital channel and any language, you can quickly identify things like fraud, racism, discrimination, sexual harassment, and other misconduct that can undermine your company’s culture, as well as uncover real opportunities to better serve your customers.
Until now, most companies have had no systematic way to surface these key indicators. With the Smarsh Communications Intelligence Platform, organisations can derive insights at unprecedented speed and scale.
Communications Intelligence Importance
Why is Communications Intelligence important to the financial services industry? It all starts with regulatory obligations. “Most financial institutions are required to store and monitor communications data,” said Nadella. “If you don’t, you’ll get fined or possibly end up in a headline.”
Damage to a company’s brand is another case for Communications Intelligence. Nadella continued, “Reputational damage is hard to reverse. So, by allowing firms to capture, retain, analyze, and proactively act on communications alerts and insights in near real-time, firms can significantly reduce their regulatory and reputational risks.”
Communication regulations are nothing new. However, the number of communications tools and the amount of data available to companies is immense, providing the potential for change and innovation. Nadella mentioned that while companies need to provide up-to-date communication platforms to their workforce, they also need to keep up with the fragmentation in communication tools – which the Smarsh Chief Product Officer claims its platform does for its users.
Digital Reliance and Hesitancy
While the pandemic has sped up the move to a more digitally dominant society, the shift to a digital-first mentality amongst companies worldwide has been a long time coming. How can Communications Intelligence benefit the broader market?
Nadella said, “Communications Intelligence can benefit the broader market by keeping up with the explosion of data that is generated by a growing number of channels and platforms. Before, companies mostly monitored email communications. Now, some of these companies have upwards of 20-30 communication tools that their employees use. We are also doing this at an enormous scale; some of the larger companies store petabytes of data with us. Being able to deal with that scale and future-proof your entire compliance stack is important.
“Also, with that explosion of data, you need to supervise it. You must monitor for misconduct that may happen in these communications. For example, take keywords – if somebody is saying they want to ‘move the market’ – that is an example of collusion. Instead of simply using analysts and lexicons, we have integrated AI deeply and at scale, to better monitor across every channel.”
There remains a hesitancy to technological change among some traditional financial firms. In the face of restrictions caused by the pandemic, it is becoming a sink-or-swim scenario for those who fail to adapt to a changing technological world.
Nadella said, “There is friction in the adoption of new technologies. For example, to scale with the explosion of data, you cannot simply deploy all software on-prem – that is just not going to work at scale. The only way to scale is through the cloud, but most companies have never moved their communications data out of their boundaries into the cloud. When we go to our customers and ask if they want to go from ingesting terabytes of data to petabytes, they have to be in the cloud; obviously, there is some friction. They are asking – is my data secure? How should I explain to regulators who come asking me about it? Part of the regulatory obligation for these firms is to protect that data, not just to store and review it. So, if they are moving their data and trusting us to move their data to the cloud, they want to ensure it is secure.”
“The second area of friction is AI adoption,” Nadella said. “Suppose we tell customers that we have an amazing set of AI capabilities that allow you to be a lot more sophisticated in analysing the data. In that case, they need to explain that to regulators, as the explainability of what AI is doing is extremely critical in this space. Unless you can answer this question, it is unlikely to be adopted. “
The Next RegTech Frontier
What’s next for Smarsh? “Bringing all of this innovation into a single platform by applying AI to be able to analyze this data across all kinds of modalities of communication is a key aim,” Nadella said.
“You have regulators that are starting to ask – how do you analyse your voice data? Are you capturing all text communications? People are not going to type everything bad in an email, chat or text message; sometimes things may happen in voice or video – and I think voice will soon become extremely important. Storing voice communications and supervision and surveillance of voice communications and then delivering intelligence from all that data will become very important.
While regulators are giving the industry the ramp-up time to analyse voice data effectively, I think a year from now it’s going to become a critical need. Beyond voice, video is also key. Are we sharing an attachment? Is there an information leak because of sharing that attachment? Who left the video conference call and when? Applying AI to the analysis of video is an area we’ll continue to explore and innovate.”
Future Plans
Smarsh is also putting a greater focus on InfoSec. Nadella commented, “Banks already have huge InfoSec teams, but now regulators are asking the same question to your small wealth managers — how are you protecting customer data? How are you protecting communications and securing devices? So, we acquired a company called Entreda that allows companies to keep tabs on their InfoSec and the risks.
“I think information security risk is going to become a big focus for regulators. It already is in large institutions; it will be equally valid in smaller institutions now. We’re working hard to bring together a single dashboard to some of those smaller firms that give them a view of their compliance risk. What’s your information security risk look like? What is your insider risk? Is someone inside the company doing trading or something inappropriate?”
Furthermore, Smarsh is focusing on multilingual capabilities, a key compliance challenge, especially in global companies with many different languages being spoken, leading firms to struggle to scale their compliance programs across languages. Through an earlier acquisition of natural language processing (NLP) firm Digital Reasoning, the company is looking to build a policy in a single language and apply it across multiple languages. Nadella concluded, “I believe we are going to be the first company to bring that to the market.”
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