Fintech Luminaries – Meet Brian Cramer of Smarsh & Tim Estes of Digital Reasoning

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Brian Cramer, CEO of Smarsh (left) | Time Estes, CEO of Digital Reasoning (right)

On Tuesday, Nov. 10, Smarsh, a leading provider of data supervision software for electronic communications, with a particular focus on both global financial institutions as well as broker-dealers and RIAs, announced the acquisition of Digital Reasoning, which delivers artificial intelligence solutions for a global customer base.

The current customer base of Smarsh encompasses nine of the top ten banks in the United States, eight out of nine global bulge-bracket investment banks as well as the top seven largest banks in the US and Europe.  With strong roots in the wealth management space, Smarsh also reputedly serves many of the largest and most successful broker-dealers and registered investment adviser (RIA) firms across the US.

We caught up with Brian Cramer, CEO of Smarsh, as well as Tim Estes, CEO of Digital Reasoning, to discuss why wealth management firms and global banks, more than ever, should combine the content capture and archiving of digital communications with AI and machine learning technology.


Why should an RIA, broker-dealer or global financial institution care about enhancing electronic communications oversight?

BRIAN CRAMER: The massive growth in the volume and variety of electronic communications that firms need to retain and monitor are introducing greater compliance risks for these companies. This has only been exacerbated by the increase in remote work, and the increasing adoption of multi-modal collaboration platforms like Microsoft Teams, Zoom and Slack. 

These big-picture changes are also creating opportunities for broker-dealers, RIA firms and large banks to use artificial intelligence and machine learning to notice risks ahead of time, while discovering new insights that lead to new paths for growth. In this new normal, there will be a widening and substantial gap in performance between companies that invest in tools that enable them to use data to mitigate risk and drive actionable insights, and the companies that fail to keep up.

How does the Smarsh acquisition of Digital Reasoning position both businesses for future success?

TIM ESTES: The combined company will enable our global customer base to accomplish things that each of our firms simply couldn’t offer on our own.  Together, we will make it possible for companies to remember, understand, and act on all their digital communications. This new area of expertise is called Communications Intelligence, which we see as the main priority in risk and compliance going forward.

On the revenue-generating side, this will include learning new essential information about the behaviors of top-performing financial professionals and client segments, as well as about a firm’s competitive positioning. On the risk and compliance side, this will include catching potential fraud, discrimination, harassment, and other misconduct before such actions can cause serious reputational and financial damage to a business.

What about the coronavirus pandemic? Is that affecting technology usage in the wealth management and financial services space?

BRIAN CRAMER: There’s no question that COVID-19 has been a global crisis and a human tragedy.  Working at home, and away from crowded offices has helped to mitigate the spread of this pandemic.  But the exponential surge of the numbers of employees who are working remotely across wealth management firms and large global financial institutions has also changed certain assumptions about workforce management in general.

Firms now realize they can operate effectively, often at lower cost, by allowing for more remote work employees, so this is a trend that is probably here to stay to a significant extent, regardless of what happens with the pandemic.

With so many more people constantly engaging in electronic communications for work purposes, firms need much better tools to supervise that data and generate actionable insights with it. Bottom line, any broker-dealer, RIA or bank that aims to excel in this new era needs to have a very robust digital communications infrastructure.

What are the latest big developments in fintech regulations?

TIM ESTES: We announced this deal at the 2020 FINRA Artificial Intelligence Virtual Conference, because many of our customers have to abide by regulations from FINRA and other industry bodies, for example the SEC and the UK’s Financial Conduct Authority. That event looked at opportunities and challenges related to implementing AI platforms. Smarsh and Digital Reasoning also are presenting at the 1LoD XLoD global conference, to be held virtually Nov. 17-19, where we will speak in depth on Communications Intelligence and what firms should be doing right now with technology-enabled data supervision.  The intersection of regulatory changes and technology advancements continues to create new opportunities and challenges that the combination of Digital Reasoning with Smarsh will be well-positioned to address.