What's Up with Tech?
Tech Transformation with Evan Kirstel: A podcast exploring the latest trends and innovations in the tech industry, and how businesses can leverage them for growth, diving into the world of B2B, discussing strategies, trends, and sharing insights from industry leaders!
With over three decades in telecom and IT, I've mastered the art of transforming social media into a dynamic platform for audience engagement, community building, and establishing thought leadership. My approach isn't about personal brand promotion but about delivering educational and informative content to cultivate a sustainable, long-term business presence. I am the leading content creator in areas like Enterprise AI, UCaaS, CPaaS, CCaaS, Cloud, Telecom, 5G and more!
What's Up with Tech?
Beyond the Record Button: AI-Powered Compliance Changes Everything
Interested in being a guest? Email us at admin@evankirstel.com
The digital communications landscape has exploded, creating both massive challenges and exciting opportunities for financial institutions. What happens when you take the communications data you're already required to capture and apply advanced AI to extract genuine business value?
Jeff from Smarsh takes us on a fascinating journey through the evolution of communications intelligence, revealing how compliance technology has transformed from simple email archiving to sophisticated AI systems that understand context and meaning. For financial firms managing millions of daily messages across 100+ channels, this shift is nothing short of revolutionary.
Smarsh's approach begins with capturing all regulated communications—from emails and texts to WhatsApp messages and video calls—and storing them in immutable archives. But the magic happens in the analysis phase, where AI that once searched for individual keywords like "secret" now understands full conversational context. Their "Intelligent Agent" can distinguish between truly suspicious activity and innocent exchanges (like planning a surprise party), reducing compliance workload by 70% while delivering more accurate results.
The conversation explores Smarsh's recent acquisition of Call Cabinet, enhancing their voice recording capabilities and expanding into data privacy regulations. Looking toward the future, Jeff shares his excitement about moving beyond compliance to help organizations understand what separates their best salespeople from the rest, integrating with CRM systems, and transforming regulatory requirements into competitive advantages. With regulatory pressure showing no signs of easing after last year's billion-dollar fines, financial institutions are embracing these technologies not just to avoid penalties but to drive business value from their communications data.
Curious about how AI-powered communications intelligence could transform your compliance program or reveal hidden customer insights? Listen now to discover what's possible when regulatory requirements become business opportunities.
More at https://linktr.ee/EvanKirstel
Hey everybody. Really interesting chat today at the intersection of compliance and digital communications with Smarsh Jeff. How are you Good Thanks, evan.
Speaker 2:Nice to be here.
Speaker 1:Well, thanks for coming. Really timely and interesting topic. Before that, maybe introduce Smarsh for those who aren't familiar with your leadership in the space, and a little bit about your journey at Smarsh leadership in the space and a little bit about your journey at Smarsh.
Speaker 2:Yeah, so Smarsh is the leading supplier of communications intelligence software. If you've ever interacted with a bank or an investment advisor and heard on the phone, this call may be recorded for quality or compliance purposes, or seen that in the tagline at the bottom of an email that's most likely going to be sent. The tagline at the bottom of an email that's most likely going to be sent, captured by SMARSH and sent to our archive to be stored for regulatory purposes. But now, with the admin of large language models, there's really so much more that we can do with that data, which is really exciting.
Speaker 1:It is and you make it sound so simple, but there's so much interesting tech and innovation happening behind the scenes, as you indicate, so maybe walk through your sort of portfolio and the world of communications compliance. You've been at this for a while. How do your features and products fit? Sort of, I guess there's capture, there's archiving, there's supervision, there's all kinds of things that you can do with that data that you capture.
Speaker 2:Yeah. So you know, if you look at it just from a workflow perspective, these large financial institutions actually large and small have a regulatory need or requirement from the SEC and FINRA to capture, store and surveil or supervise communications between employees of the bank and customers in order to ensure that they're all following the rules and still trust in the financial institutions in our country. And so to do that, you, number one, have to capture the communications, which in the old days was pretty simple, it was all email. But, as everyone has experienced, in the past four or five years at least, it's really exploded. Whereas we may communicate on email, maybe send a text, chat on WhatsApp, meet up on a Teams or a Zoom call, so the world of electronic communications has really exploded since the pandemic and the rise of hybrid work. So we have to capture over 100 different channels for our customers, different communications channels, and then that data needs to be stored in a regulatory grade archive. So what that means is that the archive can be written to only one time and then you can read from it many times. So once the data is written in there, it needs to be immutable, it cannot be changed, and that's again ensure the integrity of it and the integrity of the system.
Speaker 2:And then the banks need to surveil that data. So they need to check it and auditors will go and confirm that. And that again was relatively easy when it was just email and there was a low level of communications because everybody was working in person. But now the average trader sends between 200 and 400 messages a day. So even for a modestly sized bank of 10,000 people, they have to review 2 million or more communications a day, which is quite a big problem to solve. So that's where AI comes in, and we've been using AI for 10 years before. It was cool to surveil that and help provide more efficiency in sorting through that giant pile of communications and really finding any alerts, finding the needle in the haystack.
Speaker 2:And then, lastly, the other big interested party in this data is legal. So for any sort of lawsuits that may come up, they need to provide communications that may have happened between parties as part of legal discovery, and so a lot of that is sourced from the archive. So they'll go and need to search for communications in a certain time period between certain individuals and then extract that and provide it to their legal teams as part of the legal discovery process. So those are really the four big features that we have capturing communications, archiving them, surveilling them and e-discovery legal discovery process. So those are really the four big features that we have capturing communications, archiving them, surveilling them and e-discovery.
Speaker 1:Amazing. So you mentioned AI integration with compliance. You said you've been at it for 10 years, which you know well, ahead of all the news and the headlines and LLMs and all that good stuff. But you do have a number of new capabilities that are relatively recent AI assistant, intelligent agent I'm seeing here on your website. Talk about your AI driven tools and what their impact might be for efficiency, risk management, other areas.
Speaker 2:Yeah, it's really been a fascinating journey and it's only accelerating, which is really exciting. So in the early days, like 10 years ago, it was really just natural language processing and really looking at rules-based algorithms, so looking for single words and that's something. But it's really hard to discern the meaning behind words when you're only looking at one, and so that evolved quickly into customized machine learning models that our team built. We're very fortunate to have a very experienced and, you know, creditable team building our ML models those out to look at phrases, which is much better than words and provides a lot more resolution and more alerts and fewer false positives. But really a big breakthrough has been in the past two years with the advent of large language models that now bring us into a world where the machine can reason and look at the full context of a message. And so, whereas in the old days maybe it was like searching for a word like secret to say you know somebody hiding something, and so, whereas in the old days maybe it was like searching for a word like secret to say you know somebody hiding something, and then with machine learning models it would look for a phrase like you know, let's keep this between us or keep this secret. But now, with context in large language models, you can look at the whole message and say well, this is really just about a surprise party. Like you know, evan's surprise party is on Friday. Let's keep this secret between us. So that's not something that's indicating any malicious behavior. That would be a false positive and would just be ignored.
Speaker 2:So with the new machine learning or the new LLM models that we have and specifically here I'm talking about intelligent agent you know that's creating a huge reduction in the amount of workload that these banks have to do to surveil all these messages.
Speaker 2:Because, again, looking at 2 million or more messages a day manually with a human is a big expense, and so by enabling that to be done by machines really can reduce. We've seen reduce the workload by about 70%, which is a huge savings, and reduced the workload by about 70%, which is a huge savings. And then that level of AI is not appropriate for all-size organizations. It works for banks that are large 10,000, 100,000 people it's a no-brainer. But if it's a small organization with just 100 people to 1,000 people, then they don't need anything that high-powered. And so what we did was we took that down and put that as AI assistant, which is an on-demand capability where an individual reviewing an email can click on the assistant, and it can do it on demand and provide some highlighting where they might see some problematic language. But the human's going to make the decision in the end, and so that's a much more cost-effective way for smaller organizations to realize the benefits of AI at a price point that they can afford.
Speaker 1:Fantastic, really interesting stuff. You mentioned communications channels. You say you have over 100 communications channels supported. I don't even know that there were that many, but I guess they get into pretty obscure channels. How do you capture and manage such a diverse range of interfaces and APIs and platforms? That must be quite a challenge. Of course, new ones are always popping up as well.
Speaker 2:Yeah, absolutely so. You know, we do have a large team of product management and engineering staff that stay on top of this. We're fortunate to have been in this space as a leader for a long time, and so we do have relationships, deep relationships, with some of the leaders, like Microsoft, where when they have a new feature coming out, then they will often approach us and work with our team in order to ensure that we can compliantly capture it on day one so that it can be adopted by financial institutions. A good example was OpenAI, when they released their co-pilot for enterprise in April. You know they chose eight different companies that they would work with ahead of time to ensure compliant capture of co-pilot for enterprise, and we were one of them, which we felt very privileged to be.
Speaker 1:Fantastic. So I actually go way back to 35 plus years in telephony telecom and we thought you know voice and telephony was done and dusted, pretty boring. But there's actually a lot of exciting stuff happening on the voice side of the business. You recently acquired Call Cabinet to enhance your voice capabilities for contact center and other use cases voice recording. Talk about that acquisition and what you hope to get out of it.
Speaker 2:Yeah, I'm really excited about that acquisition, and they go way back too. The CEO of Call Cabinet was telling me the other day that when he started, everything was on tape and so that was actually how they got their name. Was there being the Cow Cabinet like pulling tapes and switching them over for recording? So there's tremendous potential in that acquisition. I mean, at first glance, it's going to help fill out our portfolio, especially for surveillance. So a lot of folks are interested now in surveilling more of the voice, and so taking those call recordings, transcribing them, then running them through AI in order to again alert on any potential misbehaviors is paramount for our customers. But then, beyond that, really Call Cabinet is helping to serve a whole other set of regulations around data privacy, and so that opens up a new world for us too and the ability to go work with folks in the call center, together with the folks, in compliance, to not only provide communications compliance for books and records, but also for data privacy as well.
Speaker 1:Fascinating. So you have a lot going on. Give us a peek into the future, whether it's your roadmap or new innovations that might be on the radar. What are you excited about for the rest of this year and beyond?
Speaker 2:Yeah, so I'm really excited about going beyond compliance and really using these large language models to provide more insights to more business value to the organization. So even expanding to insider threat and other risk management areas, but going beyond that to revenue management as well, and so looking at use cases around all these communications with customers. What is it that they really like about the services that our customers are able to provide? What separates the best salespeople from the rest, and how can we emulate more of their behaviors in the way that they communicate, either through training or through hiring practices, in order to reinforce and have a stronger sales team in the future?
Speaker 2:Yeah, so I think that's what's really exciting, and then even that, yeah, and then that expands the opportunity beyond highly regulated industries as well, because that's a problem that's relevant to organizations in all industries and all sizes.
Speaker 1:And recorded and analyzed. You know, not just to you know, be a big brother on your sales with your sales reps, but to get actionable insights and feedback on sales opportunities and understand what customers are asking for. So much opportunity on the table that's just sort of left on the cutting board.
Speaker 2:So yeah, even even just an integration with CRM, because people it's not their favorite activity to go update CRM after a call. So if there's an integration where an agent is able to listen in on that call, transcribe it and then input the relevant information into the CRM and update it, that would really help the sales folks be a lot more efficient and save them from one of their most frustrating tasks.
Speaker 1:I bet. So any advice for getting started. This is not a small undertaking for the CIO or team IT team to implement. How do you make it easy to get started? And I guess you probably have a playbook, but it doesn't take many, many months to kind of deploy into a legacy environment.
Speaker 2:Yeah, well, we're very fortunate to have an experienced and broad services team, and so they. That's all that they do, and I mean our services organization, I believe, is over 300 people, and that's what they do all day, every day, and so they can help people to do everything from migrate their data from a legacy archive or redundant legacy archives and consolidate that down to implementing and onboarding, you know, new users into these technologies and can even do some custom development if they have, perhaps, a capture channel that is not one of the 100 that we serve today. We have a team that can work to capture those channels in the future and do some custom development for them as well, so they're in good hands.
Speaker 1:That's great. So last year we saw a lot about fines from the FTC in the order of billions of dollars it's pretty shocking against a number of financial institutions, all very public. Do you see that continuing or where are we on the regulatory landscape? Is it steady, getting more challenging, or are we going to see some easing up? What are you seeing in the field?
Speaker 2:What we're seeing and hearing from customers is that they're staying the course, and so there's certainly a lot of change happening in the government and with the regulators, but they're staying the course and acting as if that is not going to let up and not going to change.
Speaker 2:Because, even aside from the fines, it's just good business. There's still the regulatory risk that's out there, and then there's also still the opportunity now that a lot of I'm hearing from a lot of customers that they're seeing and using this data for other purposes internally, and so I'm not seeing any dramatic changes right now in the market.
Speaker 1:Yeah, that's scary, scary numbers. So we're taking a consideration of that. So we get getting through the busy event season, a lot of travel. What are you looking forward to next over the spring summer months? What's on your radar and the team?
Speaker 2:Well, we have a big launch coming out at the end of May and so you know that's what my team's working on and that's that's always exciting, especially to get it out there before the summer time. And then I'm really excited on the roadmap for AI and just building upon AI assistant and intelligent agent. And I think that's just the first step in the beginning and there's a lot of excitement and ideas around the potentials and so putting those through the development pipeline and seeing which ones have real good business value and which ones maybe not as much, and getting those to market as soon as we can.
Speaker 1:Fantastic. Well, good luck and congratulations on all the success. You guys are really killing it in the marketplace and adding a lot of value. Congratulations.
Speaker 2:Thanks a lot, evan, appreciate it.
Speaker 1:All right. Thanks everyone for listening and watching. Take care.