Smarsh: Keeping Compliant

Smarsh: Keeping Compliant

As a consultant to financial services firms at the turn of the 21st century, Stephen Marsh noticed several of his clients were scrambling to meet new Securities and Exchange Commission regulations requiring firms to archive all electronic communications. With chaos comes opportunity, so Marsh started a company in 2001 to help them out.

“Compliance isn’t always the sexiest category or industry to be in,” Marsh said, “but the technology we provide makes our customers’ lives more convenient.” 

In fact, compliance is the opposite of sexy. It’s a pain point. Which means the need for services like Smarsh’s have become more valuable as regulators add layer on layer of rules and requirements (it’s the rare regulator that walks back a ruling.) 

What started out as a relatively simple need to archive emails grew to instant messaging and chat rooms. Things have exploded recently, with clients demanding access to communication via text messaging, web sites, social media and a plethora of mobile apps.

Smarsh says what’s really changed in wealth management is the way firms respond. Instead of restricting the technology available to advisors, compliance departments now look for ways to help advisors use the tools they want. 

“The practice of saying ‘no’ is gone,” Marsh said. “We will continue to develop technology to do just that: Say ‘yes’ to business units; to help advisors and registered representatives use the tools that they want.” 

Smarsh now has archiving tools for 40 different content types. From the 20,000 customers they serve, Smarsh has already archived 3.4 billion messages in 2015, adding more than 1,000 new messages every second during peak hours.

Marsh said one thing that helps his company stand out from other compliance tools is the ability for officers to scan and monitor this massive stream of data for potential vulnerabilities. Doing it automatically (as opposed to human surveillance of every communication, which many firms still rely on), Smarsh creates efficiencies for compliance officers and the advisors. 

Marsh also has a reputation in the industry for excelling at customer service. He founded Smarsh without any outside funding or investors and did everything he could for each individual client personally. 

“That focus has persisted over time and causes a lot of customers to be very happy,” Marsh said. 

As technology continues to evolve, both for advisors and the clients they serve, there will always be new regulations and new compliance challenges. Whatever the next big thing may be, Smarsh expects to be the in the advisor’s back office, figuring out how to help them ease the pain. 

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