Industry Insight

New Offices, New Data, New Tech: Observations from SmarshCONNECT

July 06, 2022by Robert Cruz

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We recently had the honor of hosting some of our largest customers and strategic partners at our annual SmarshCONNECT event in New York City. We set out to gather a group of financial services professionals to discuss the opportunities and challenges their firms are facing in a time of continued change. Change that has disrupted how they communicate with clients and collaborate internally. And change that is happening in an era of tremendous market volatility and unwavering regulatory scrutiny.

This was a chance for us to directly address the relationship between:

  • The challenges and benefits of hybrid work
  • An influx of new and expanded communications data
  • Advanced technologies for compliance and risk management

We had lively discussions with companies that are dealing with the impact of these changes. Let’s discuss some of the key takeaways from the day.

The catalyst for change

The need to enable productivity from everywhere has led to an influx of new communications and collaborative tools. This includes the pervasive use of Microsoft Teams and Zoom as well as the increasing demand for social and mobile apps brought on by a new generation of employees and clients.

The resulting explosion of data volume and variety is stressing existing systems and manual methods of oversight. New communication channels and more data are driving the accelerated adoption of advanced technologies deployed in public cloud infrastructures, including advanced AI and natural language processing (NLP) surveillance tools.

Prior to the pandemic, the decision to embrace new communications tools and advanced analytics followed the well-worn exercise of benefit vs. risk and cost analyses – at least for larger firms (with smaller firms adding the variable of limited compliance staff). For most, allowing staff to use all their desired communications channels wasn’t worth the risk. So, what has changed? Here are a few of the recent events causing a reevaluation of this analysis:

As we’ve said before, prohibiting the use of a channel doesn’t mean that employees won’t use it to connect with customers. It just means those communications won’t be tracked when employees ignore the prohibitive rules, which is the riskier move for a modern financial services firm in the digital era.

The paradox is that no firm we talked to is planning to lock down or expand prohibition policies for new communications tools even with more rigorous regulatory inspection. The reasons are three-fold:

  1. Many organizations found they can be productive, responsive, and effective (if not more so) with digital communications tools
  2. Regardless of internal policies, the tools persist, are easily accessible and are often the fastest and easiest way to communicate, as highlighted in cases involving WhatsApp
  3. Firms have realized that not supporting tools preferred by clients and employees can drive those individuals to go elsewhere

As it pertains to public cloud adoption, AWS Financial Services General Manager Scott Mullins noted that “public cloud is now in its second decade, and we are still in the early stages of its development.” The public cloud allows for faster innovation and technology integration. The status quo is no longer sustainable and responding to the changing face of how work gets done is now a business imperative.

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Important considerations for moving forward

For the majority of our audience, the short term appears to be hybrid, with most indicating plans for returning to an office environment 1-3 days per week (in contrast to recent news from Elon Musk and others indicating a push toward a full return). But the impact of this decision has far-reaching implications which will shape how we think of the future of work in financial services.

This longer-range view was the topic of our concluding session, featuring Zoom Co-CIO Gary Sorrentino and Forrester Analyst Peter Wannemacher. Here are the top four takeaways from that conversation.

1) We’ve been digitally transformed

In April 2020, Microsoft CEO Satya Nadella said, “We’ve seen two years’ worth of digital transformation in two months.” This begs the question about the state of our digital transformation more than two years later: are we there yet? The answer from our panelists and the event overall is a clear "yes." We’ve seen plenty of evidence to indicate that we can be fully functional, productive and responsive by working through digital communications platforms as a complement to work in the physical world.

That’s clearly the case for Zoom, but not an end state for all roles and business cultures. However, as noted by Sorrentino, the challenge now becomes the realization by employees that they are more productive at home. “They have figured out how to work one-to-one. Now we need to figure out how to work one-to-many. Ultimately, it’s about how people connect.”

2) Hybrid will require a rethink of office and work design

Hybrid work entails much more than determining how many days employees are physically present in an office. As many have experienced, we have not yet arrived at a state of location-agnostic work.

Sorrentino noted, “Hybrid means that there will always be at least one person not in the room. People do not change the way they think about office space. It was designed around the warehouse, with workers next to a foreman. We can’t shoehorn old ways of working into a hybrid workforce and have to unlearn pre-pandemic behaviors. We have to make the building a special place, with a special purpose, and teach people how to use it.”

One implication of hybrid is the ability to offer a uniform experience to employees regardless of where they are located – something referred to as “digital equality” by one of the attendees. On that front, we may not be there yet.

“Proximity bias is real. Lots of people have flown to a presentation in person because it is more effective and may still influence career opportunities,” Wannemacher said.

3) Barriers between personal and business need to be reimagined

As the line between personal and business time becomes even blurrier, Wannemacher noted that we need to examine “not only physical barriers, but also temporal barriers. Differences on when people want to work. There are two types of people – those who want to work within the parameters of nine to five, and those who want to work during their desired timeframes.”

Sorrentino agreed, saying, “It’s about trust. That was the bargain. We can’t say we trust to a point, but then say we trust them less when they come back to the office.”

4) Innovation will continue to reshape our relationship with data

Clearly, the pace of innovation has sped up, which will continue to impact how we leverage information. This has enormous implications for how organizations evolve.

“Around 72% of financial services executives believe they can respond to the rate of change. This will drive the future of work in financial services,” said Wannemacher. He referred to three specific areas of impact:

  • Automation of financial services
  • Pulling actionable insight from workforce data
  • Increased focus on employee experience
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Time to embrace change

So, where does this leave us? Whether it is the adoption of new communications tools, leveraging cloud innovation, embracing AI/NLP, or responding to the demands of hybrid work, our panel highlighted the combined power of human creativity and advanced analytics. We now have the tools for getting through the noise of communications, finding and managing non-compliance, and using that information to be more agile, responsive, and better able to meet the needs of our customers. Why not put these tools to use?

A sincere thank you to the customers and partners who were able to join us in person in NYC, including AWS, Zoom, Ernst & Young, FTI, Slack and Reed Smith. We genuinely appreciate our partnership and look forward to our upcoming EMEA event and ongoing digital experience events to continue the momentum and partnership forward.

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Robert Cruz
Smarsh Blog

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