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Smarsh to Acquire Digital Reasoning for AI-Powered Risk and Compliance Offering

Smarsh, a company that enables organisations to manage risk and uncover value within their electronic communications, has announced the acquisition of Digital Reasoning, a global leader in natural language processing (NLP), artificial intelligence (AI), and machine learning (ML), at the 2020 FINRA Artificial Intelligence Virtual Conference.

The transaction brings together the leadership of Smarsh in digital communications content capture, archiving, supervision and e-discovery, with Digital Reasoning’s leadership in advanced AI/ML powered analytics. The combined company will enable customers to spot risks before they happen, maximise the scalability of supervision teams, and uncover strategic insights from large volumes of data in real-time.

Brian Cramer, CEO of Smarsh, said, “Today marks an exciting milestone in the Smarsh growth story, with the addition of Digital Reasoning’s capabilities to our portfolio. Digital Reasoning is a pioneer in their industry, and together, our solutions will not only revolutionize the way that companies in the financial services industry meet their compliance obligations, but also enable them to harness the insights from their data to fuel their businesses growth. By combining the Smarsh and Digital Reasoning capabilities, we can apply AI solutions that will allow companies to extract intelligence from the data created on any digital communications platform. We are excited to bring our two companies together and help financial services firms thrive now, and be ready for the future.

“The ongoing pandemic and its impact on how and where people work has accelerated long-term trends that were already well underway.  The exploding volume, velocity, and variety of electronic communications are creating greater risks for firms, while also presenting opportunities to leverage communications data to spot risks before they happen, and identify new insights to drive fresh growth initiatives. These conditions are creating a large divide between firms investing to harvest data-driven insights and leverage data to manage risk, and those who are falling behind. This will bear out in earnings and share prices in the years to come.”

The combined capabilities of Smarsh and Digital Reasoning will enable customers to:

  • Strengthen lexicon-driven supervision with AI-powered surveillance across the widest breadth of digital communications channels
  • Automate surveillance across the emerging collaboration tools (such as Microsoft Teams, Zoom, Slack, and Workplace by Facebook) that are critical for productivity in the Covid-era remote workforce reality
  • Reduce costs of human capital, by minimising the amount of communications people must review
  • Accelerate the ability to leverage massive amounts of data for insights that can drive business growth
  • Identify troublesome patterns or trends of employee behaviour before they cause irreparable harm

Tim Estes, Founder and CEO of Digital Reasoning, said, “We are delighted to join Smarsh and bring our technologies together to create a leading solution for companies to meet their compliance obligations and mitigate risk. The combined company creates a complete solution to the most important challenges around understanding human communication from capture to archiving, to analytics to surface risks and critical insights. Together, we also bring the only complete AI solution for monitoring remote work and joining it with all other digital channels to create a 360-degree view of risks and insights for the enterprise.”

Together, Smarsh and Digital Reasoning can enable global customers to get ahead of unwanted or illegal activities such as fraud, insider trading, money laundering, customer complaints, and other top priorities. The enhanced platform will be especially adept at satisfying requirements from financial services regulators in the United States and overseas, including the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the U.K.’s Financial Conduct Authority (FCA).

The addition of Digital Reasoning to the Smarsh organisation follows the acquisition by Smarsh of Entreda, the leading cybersecurity compliance solutions provider for the wealth management space, in May of this year.

Financial details of the transaction, which is expected to close in the next 60 days, were not disclosed. Barclays acted as exclusive financial advisor to Digital Reasoning.


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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