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Compliance Must Embrace – and Understand – AI

Compliance teams are overstretched. It’s become imperative they find ways to leverage technologies to become leaner, more effective, and better able to handle increasing demands. But they’re not alone in these efforts; the most recent OCIE risk alert indicates that organizations are also responsible for compliance programs that are sufficiently supported with both staff and technology.

As we’ve discussed before, an over-reliance on manual functions means compliance teams are overwhelmed by low/moderate risk issues. Technology and automation have to be considered as part of the equation so that teams can focus on the riskiest issues that matter most to the business.

As technology gets more intelligent, an opportunity arises in artificial intelligence (AI) as a catalyst to enhance the efficiency of a program. As we’ve mentioned, this can lead to a more mature, impactful compliance program and increased trust throughout the organization.

However, as programs mature and manual processes shift into automation, compliance teams will need to understand automation more and more. AI is an important tool, but at some point, compliance will be asked to explain how they supervise and test these tools to know they’re functioning as designed and expected.

At its core, AI is designed to monitor a data set and when a logical trigger is set off, to translate that information into an action. In some instances, that translation is clear and easily understood. But in other situations, especially when the way the AI translates between data sets and actions is covered under a “Black Box” due to intellectual property concerns, it makes explaining it to a regulator more difficult.

As FINRA wrote in its June 2020 report on AI and again reiterated during its November Conference on AI, a compliance professional needs to understand how the AI they are implementing aligns with regulatory expectations. These steps include a documented understanding of the data set-to-action translation and a method to regularly test the system to validate it meets legal and regulatory requirements. When the algorithm informing your AI is hidden in a “Black Box”, this can prove difficult.

It might be time to evaluate your firm’s use of AI in its supervision policies. If in the course of your review, you have any questions on AI and how to prepare for a regulatory audit feel free to reach out to your Hearsay account team to help.

Clara Shih on The Big Reveal, with Suzanne Siracuse

We were excited to hear about Suzanne Siracuse’s new podcast, The Big Reveal, which aims to bring personal interviews with wealth management industry innovators and leaders to life. Suzanne, founder and former longtime CEO and Publisher of InvestmentNews, is herself an influential leader in the wealth management industry, and we were thrilled when she invited Hearsay founder Clara Shih to be her launch guest speaker along with Michael Kitces, George Nichols, and Bill Crager.

Here’s a link to Clara’s recent conversation with Suzanne, with a few excerpts highlighted below:

Suzanne: Clara, we met four years ago when I interviewed you at the InvestmentNews Women Advisor Summit.  I have to admit I was in awe of your background… You graduated from Stanford with undergraduate and Master’s degrees in computer science. You were an early employee at Google, then joined Salesforce.com. In 2007, you saw the rising tide of social media and became famous for creating the first business application on Facebook, known as “Faceforce.” Then you founded Hearsay Social, now Hearsay Systems, where you served as CEO for 11 years until one month ago. With all those successes, I found you to be warm, generous, and personable, and you were a huge hit with the many advisors who attended that summit.

Clara: Thank you, Suzanne. My family came to this country in the 1980s with not very much, and I’m so grateful for the many opportunities I’ve had. In my life, I have always tried to dream big and take risks. Some have worked out well. I’m thankful to have met inspiring partners and leaders like you along the way!

Suzanne: So let’s talk about your recent announcement.  You recently moved into the role of Executive Chair and promoted your COO Mike Boese to CEO.  Whenever a high profile leader leaves the top spot, there’s always speculation on why. Can you take us through this decision and why now?

Clara: After 11 years, it was time. I know you know, having been the founder of InvestmentNews, and those of you watching who have built your own business know that being the founding CEO takes everything you have– every day, every hour, every weekend, every ounce of your being.

Last December I let the board know I needed to start thinking about a longer-term transition. In Q1, I met Mike, and here was someone who has started companies and scaled companies to hundreds of million in revenue and loved our mission and culture, then COVID happened and I realized the transition could happen much sooner.

Suzanne: Do you think the pandemic accelerated your timeline?

Clara: There is no question. During crises, we see what leaders are made of. Mike rose to the occasion and truly impressed me and the entire board of directors with his compassionate leadership, incredible work ethic, and commitment to our customers. On a personal level, the pandemic for me, like many people, has been a time of reflection and soul-searching. Over the summer, I realized the time had come after 11 years for me to take a break, spend time with my family, and try something new, with the peace of mind that Hearsay would be in great hands.

Suzanne: Over the summer, before you announced your new role, you and Mike co-led a major deal with Salesforce in which they took an equity share in Hearsay.  This deal showcased an important strategic alignment between Hearsay and Salesforce marrying Salesforce’s CRM and Hearsay’s social and digital engagement capabilities. It was big news in our industry.  Tell me how that all came together.

Clara: Our partnership has been driven by market forces – compliant digital engagement and CRM need to come together in service of the customer. Customers of both companies kept asking us to work more closely together on integrations, customers like Fidelity, Prudential, Morgan Stanley. So it was really just formalizing what was already happening naturally in the market to better serve what advisors need.

The amazing thing is there are now multiple phases of digital transformation which have been made possible thanks to this partnership. It’s not just about digital marketing. It’s completely rearchitecting how advisors spend their time and leverage analytics in every part of running their practice. The implications are tremendous, more than many people realize.

Phase 1. Contact and data sync

Phase 2. Workflow

Phase 3. Routing

Phase 4. Automation

Suzanne: While both Salesforce and Hearsay are giants in serving large brokerage firms and independent broker dealers, you have not made as much traction in the RIA space, though you do count Marty Bicknell and Mariner as a client. Are RIAs an area you are looking to expand into?

Clara: There’s no question we need to serve RIAs. They are a critical and growing segment in wealth management, and it’s a matter of when, not if. That said, I’m a big believer in focus, and timing and sequencing expansion– this is why Hearsay doesn’t sell technology to life sciences or tech companies. We have always been laser-focused on wealth management and financial services firms with relationship managers. When it comes to RIAs, we have a lot of learning to do. I’d like to learn from as many people as I can. Thinking about new markets and segments such as RIAs and international geos is one key area I’ll be focused on as Executive Chair.

Suzanne: Social media, which was the primary area Hearsay specialized in when you started the company in 2009, has become “not a nice to have” way to communicate but almost an essential way to communicate.  You were ahead of your time!  What gave you the idea to create Hearsay and the category of social selling in the first place?

Clara: Back in 2009, Facebook and LinkedIn had just launched and usage was growing at an exponential rate. A friend of mine was just starting out as an advisor, had no clients, and was just cold calling. I couldn’t believe how inefficient and ineffective it was. It dawned on me that every step of the sales relationship cycle, was going to get totally transformed by social and digital forces and that a solution was needed to bring business focus to social media. We started with social signals – money-in-motion life events being shared on social networks (the “hear” part of Hearsay), as well as social drip campaigns and 1-1 messages (the “say” part of Hearsay), and of course all of the compliance elements which are table stakes in wealth management.

Suzanne: Since then, Hearsay has made some big moves into adjacent client engagement areas, such as your compliant text messaging solution and new Hearsay Actions platform. How have you seen digital help advisors with their business development and client engagement efforts?

Clara: In every industry, technology is completely transforming how we need to work. In wealth management, this manifests as advisors focusing more of their time on value-added relationship acquisition and deepening activities. On the surface, Hearsay appears to be compliant text messaging and social selling. In reality, what Hearsay really is, is a way to automate and route marketing demand generation and client servicing tasks.

Suzanne: How has COVID changed the way Hearsay is working with clients and how advisors use Hearsay?

Clara: We’ve seen unprecedented usage of our platform since March. It’s been very uplifting to see how advisors have stepped up like never before to be there for clients when it really counts. From Hearsay’s perspective, the shift to remote work has been very seamless given we were already set-up with zoom, texting, social, and digital engagement tools pre-pandemic. With everyone stuck at home, we’ve tried to get creative in finding ways for human connection despite not being able to meet face-to-face, such as sending a supply box to everyone ahead of our largest-ever customer summit in May, or more recent virtual dinners where we have the same meal and bottle of wine delivered to a client as what we’re having so that we can still break bread together and have a slower conversation outside the hustle and bustle of back-to-back meetings.

Congratulations to Suzanne for the launch of her new podcast, and thank you for featuring Clara and Hearsay!

Career Tips for Difficult Times: Founders’ Perspectives

The Wall Street Journal held a virtual Jobs Summit recently where Clara Shih, Founder & Executive Chairwoman of Hearsay was interviewed alongside Kenneth Lin, Founder & CEO of CreditKarma. Michelle Ma, WSJ Assistant Editor, Live Journalism, dug into what they learned from the 2008 recession, which was the time period both Shih and Lin founded companies.

Over ten years later, here we are again. As CEOs who have weathered difficult times and hired their fair share of candidates over the years, they had some excellent advice for those who find themselves unemployed, like so many Americans today.

If you missed the live event, here are the highlights.

Every job teaches a skill

Lin suggested that every job can build your skillset. He shared that he once had a job as a dialer for stockbrokers. This involved a stack of index cards with names and phone numbers on them and dialing all day with the goal of getting those people on the phone. Though it may have seemed like a trivial role, he learned how to be more confident on the phone; a valuable skill.

The lesson? Even a job you may not be excited about is teaching you something. If you end up taking a position that’s not perfect to put food on the table, look for what you can learn and make the most of the job you have. Then when you interview for your next role, present what you learned.

Hustle and other top skills in demand, today and beyond

Everyone knows times are tough and what was relatively easy 6 months ago takes real work in today’s virtual, budget-conscious world. That’s why when Clara’s hiring these days she’s looking for someone with hustle, which she defines as someone who knows how to get creative, get things done, and take risks. Number two for Shih is empathy/EQ and knowing how to connect with people in a remote setting.

Lin shared that passion is one of his key criteria. When times are tough, what pulls people through is when they love what they do. He said he knows sometimes it’ll just be a paycheck, but if you have a choice, pick the job you love.

In terms of skills based on experience (hard skills), Shih suggested that the ability to connect with customers, writing code/engineering, and being able to write (content, copywriting, etc.) are always in demand.

Mine LinkedIn for Hidden Career Advice

Have you been using LinkedIn to re-establish dormant connections and see how the people you admire got where they are? If not, it’s time to get your LinkedIn hustle on.

When Ma mentioned that Clara has said LinkedIn is a blessing for job-seekers, Clara enthusiastically talked about the ability to look at the career paths of people you admire and see how they’ve gotten to where you want to be—what did they study, what certifications do they have, what kind of experience do they have? Take this opportunity to map the next steps you want to take in your career. Then invest in yourself and get the skills you need to take the next steps.

Valuable advice from a mentor

Randy Komisar, a prominent Silicon Valley attorney, executive, and author was a professor of Shih’s at Stanford. Like many college seniors, she wasn’t sure what she wanted to do once she graduated. When she asked him how to think about her career, he told her that if she wanted a big career in tech, she needed to build up generally valuable skill sets, including these three things:

Ship a new product end-to-end: conception, design, prototype, iteration, shipping, launch, continuous lifecycle
Customer experience skills (sales, account management, etc.)
Learn how to manage people

Resume vs. referral: what’s more powerful?

Someone in the audience asked how many people are hired based solely on a resume versus a referral. Shih and Lin agreed here; referrals are preferable. Shih pointed out that this speaks to the importance of networks (another point in favor of re-connecting if it’s been a while!), while Lin mentioned that referrals have higher close rates. Shih also noted, however, that a referral only gets someone in the door; they still have to earn the job. Both do extensive reference checks and interviewees speak with multiple people within the company before being offered a position.

Keep going!

This has been a hard year and there are lots of smart people out there looking for their next role. Aside from the excellent advice they shared for job seekers, Shih and Lin also shared the truth behind start-up life, which can serve as excellent inspiration to keep going through the tough times. A start up founder and CEO, during a recession or not, gets knocked down over and over again. CreditKarma almost ran out of money three times; Shih cleaned the office along with her CEO/product manager/designer/you name it duties. For 99% of start-ups, it can take years of grit and determination before making it. The big secret? Just keep going!

We currently have a number of open positions at Hearsay, so take a look at the Careers page and let us know if there’s a match.

My First Day as CEO of Hearsay Systems

Clara and me last week, appropriately socially distanced [Photo by Radu Ranga]

Today is an exciting and very humbling day for me. After five months as Hearsay’s COO (all virtual) and working closely with Clara Shih, co-founder and CEO of Hearsay Systems, and the Hearsay Board of Directors, I am honored to take the reins from Clara as the new Hearsay CEO and continue to partner with Clara as Hearsay’s Executive Chairperson.

Clara and Steve Garrity founded Hearsay 11 years ago on a belief that the sales and relationship management profession would get upended by the social graph being created on Facebook– fundamentally disrupting the way customers buy, whom they trust, and how they’d want to stay in touch. Over this decade-long journey Clara and the Hearsay team built out a new social selling category, expanded into other key digital channels and developed a platform strategy to better align with customer engagement outcomes. Hearsay also focused on wealth management and insurance sectors and the challenges of providing last mile digital communications in a scalable, compliant manner. Over 170,000 advisors and the most prestigious financial services companies have embraced this vision.

Many Hearsay team members (Chris Andrew, Chief Product Officer and employee #1; Pete Godbole CFO; Robert MacCloy, CTO) and Board Members (Frank Defesche, Jon Sakoda, Bryan Schreier) have been instrumental in this journey and taking the long view toward building the company. I have appreciated their support and counsel over my brief tenure and the support and patience I have received from the entire Hearsay team helping me onboard in a virtual world.

To our team members, customers, and partners, as we start this new phase of our journey together, I wanted to share some of my story with you, why I came here, and what I’m excited to do.

My story

I grew up in Seattle, WA and have been married for 26 years and we have two grown kids. I started as an engineer right out of the University of Washington working at a Bay Area Refinery. I made my way into software and have been blessed to work with many great technology companies (Oracle, SAP, PeopleSoft, Taleo), leaders and colleagues across many functions, projects and transformation efforts. My new, favorite capability/strength is the learnings I have gained from the wins and defeats associated with trying to scale a business, incubating new ideas or drive wholesale change initiatives. I hope to fully exploit this capability in my new role.

There are two simple axioms of leadership I try to espouse. First, everyone is a leader. Some of the most impactful people at any company have no direct reports. They muster followership by their energy, enthusiasm, smarts (EQ and IQ), and organizational and persuasion skills. We need to create environments where anyone can lead.

Second, in 25 years, I’ve learned that accountability and direct dialogue permeate winning teams. If I could wish for two things in any organization it would be a strong culture of accountability/”owning it” and frank, open dialogue on the hard, uncomfortable topics-it’s the only way to get fully aligned, build trust, and let the best ideas win. Clara and the Hearsay leadership team share this perspective.

What drew me to Hearsay

There were three fundamental drivers that made joining Hearsay an easy choice.

1. Significant market opportunity: It starts with an unparalleled customer list. In 25 years working in enterprise software, rarely have I seen this quality and quantity of marquee customer relationships, customers who view us as true partners and trusted advisors to help guide them in their digital transformation journey. Hearsay is also a rare product that is both a vitamin and painkiller, as Clara talks about in her Masters of Scale podcast with Reid Hoffman. Many customers start with our compliance platform (painkiller), but then it builds from there into wholesale transformation to deliver a modern customer experience (vitamin). Most importantly, the last decade of digital transformation was about automation and self-service. Validated by the pandemic, the next decade is about authentic engagement at scale– a category Hearsay has established and will fuel its next chapter of growth.

2. Shared values: Hearsay’s values have remained essentially the same since the company was founded–Customer Focus, Kaizen, and Get-the-Right-Stuff-Done (GRSD). For me, Customer Focus is about the big stuff and the small stuff. You need to get the small stuff right in order to earn the right to do the big stuff (be a trusted advisor). I’ve had many roles throughout my career, from leading M&A at Taleo to CEO of Certent. Each has been an opportunity for me to flex a growth mindset and continuously learn, improve, and grow or put into practice a personal Kaizen approach. Kaizen at a company level and Kaizen at an individual level is the killer combination. Prior to Hearsay, my wife and I took a significant risk in launching a new startup. I learned very quickly no environment demands GRSD more than an early stage company. Everyday you need to be ruthless in how you spend your time and dollars. We had to make some very difficult decisions when we were running low on funds and were fortunate to find a strategic buyer to execute our vision. GRSD has new meaning and purpose given this experience.

3. Opportunity to have an impact: As I got to know Hearsay and got to understand the challenges and opportunities it faces, I realized it is a great match for my diverse set of experiences. More importantly, It’s been inspiring to watch how our customers have depended on Hearsay to reassure and guide their customers during the pandemic – which in turn has given our team a new level of purpose and hustle.

What we will do going forward

The pandemic has only accelerated our next phase of growth, as Hearsay’s engagement platform is now mission-critical for relationship sellers who can no longer meet clients face-to-face. From Social and Sites to Relate and Actions, Hearsay platform utilization, new deals, and customer expansions are accelerating. Our business is outperforming expectations on nearly every metric.

As we embrace this momentum, there are several concrete actions I will be working with our team to drive 2021 performance and make our vision a reality. First and foremost, we need to fill all key existing and new roles across the organization. We need the right talent in place to execute on our ambition sales and product plans. Second, we need to drive a focused set of initiatives to help deliver customer outcomes. The migration to our new, modern reporting solution is a great example. Third, in the next several quarters we will be launching new integrations that help our customers unlock the value in their CRM, marketing automation, and core systems investments.

In everything we do, we need to continue to lead and collaborate with humility and purpose.

Mike

Passing the Torch to Hearsay’s New CEO

A heartfelt thank you and exciting news for Hearsay’s growth, as I transition to the role of Executive Chairperson! Read on to learn more about Hearsay’s new CEO, Mike Boese.

11 years ago today, Steve Garrity and I founded Hearsay Labs on a belief that the sales profession would get upended by the social graph being created on Facebook– fundamentally disrupting the way customers buy, whom they trust, and how they’d want to stay in touch. We came up with the idea for social selling (along with a few other ideas which didn’t make the cut), hired some friends and their friends, played a lot of ping pong, and wrote code day and night.

Every day was exciting, nerve-racking, unexpected. I’ll never forget the day in early 2011 we stumbled on the need for reg tech. We were in Boston visiting a prospective Fortune 500 customer. Our prospect cut to the chase – she wanted to know whether Hearsay could increase her laptop storage capacity. She turned her computer toward us, and we could see that her desktop was littered with thousands of image files. It turned out that she and her team spent their days manually screenshotting every one of their firm’s thousands of financial advisors’ LinkedIn profiles every hour in order to comply with FINRA advertising rules. Their laptops were literally running out of space. We left stunned and inspired. Once back in California, we went to LinkedIn HQ and pitched them on the need for a compliance API in order to give access to the millions of users in regulated industries who were being blocked. The rest, as they say, is history. We have never stopped building, innovating, and getting inspiration from customers since.

It’s been a thrilling, challenging decade. We’ve helped 170,000 relationship sellers reinvent themselves in the digital era and enabled compliance teams to scale their workload amidst an explosion of digital communications. We’ve raised $50 million and expanded to 22 countries while remaining incredibly capital-efficient due to our industry focus. We created social selling as a category, focused to become an industry cloud, acquired a mobile communications platform, then expanded our charter to last-mile omnichannel engagement to allow our customers to drive outcomes across their full client journey, not just social.

Along the way, I’ve learned countless business, leadership, and life lessons, forged lifelong friendships, and pushed harder, dreamed bigger, and overcome more than I ever thought possible. This last decade has been the journey of a lifetime, and we are just getting started. The first wave of digital transformation in financial services was automation and self-service. Validated by the pandemic, this next wave is about authentic engagement at scale– a category Hearsay has established and will fuel its next chapter of huge growth. As co-founder and CEO, I’ve always done what it takes to make Hearsay successful. Today I’ve decided what Hearsay needs to be successful for the next decade is a new CEO.

Mike and me last week, appropriately socially distanced [photo by Radu Ranga]

Last year, after a decade as CEO, the board and I began looking for the right person to lead Hearsay into its next chapter. With our last-mile engagement category established, platform built, and customers aligning their enterprise transformations, Hearsay had entered a new stage in its evolution which required a new skillset– someone with experience threading and scaling cross-functional processes needed to align our growing number of teams and offices around the world. Our COO  Mike Boese exemplifies these skillsets as well as our company values, and it’s with so much pride and optimism that  I announce he will be our CEO for Hearsay’s next chapter, which I already know will be our biggest yet. I will step into an executive chairwoman role where I can support from the wings.

Let me tell you about him. With his prior experience leading multiple software companies, combined with his humility and “Day 1” hustle, I knew when I met Mike that he was special. Mike studied engineering at the University of Washington and has helped build some of the most important and iconic software companies of our time– Oracle, PeopleSoft, SAP, Taleo. Mike is a former startup founder himself, and has also scaled companies and teams exactly to the next phase of where Hearsay needs to go. Above all, Mike is an incredibly good person, partner, and servant leader deeply committed to our people and customers.

From platform utilization to new deals and customer expansions, our business is outperforming expectations on nearly every metric. Watching how our customers have depended on Hearsay to reassure and guide their customers during the pandemic has given our team a new level of purpose. Thanks to our business performance and Mike’s leadership performance, I know in my heart that the time has come to pass the torch. Our future has never been brighter, and I know the company will flourish under Mike’s stewardship.

What’s next for me? Hearsay will always be my company. As executive chairwoman by day, I’ll be helping Mike advise our customers, codify our team culture, continue building out our leadership team. I’ll stay on full-time for as long as Mike wants, then transition to part-time. That’s the plan for now. Over the next several months, I’ll take some time off to recover from the millions of miles I’ve traveled in the last decade, spend quality time with family, and then figure out what’s next.

Thank you from the bottom of my heart to those who have joined and supported me in this startup journey. My initial list was too long to fit in this post, so apologies in advance for this condensed version:

  • To my husband Dan, thank you for supporting me and making sure I remember to eat and sleep. I love being home with you every day and never want to go back to flying 300,000 miles a year.
  • To my son Blake, it has been such a joy to get to know you deeply, read bedtime stories and tuck you in every night. I’m nervous and excited to be Room Parent for your kindergarten class!
  • To our current and former team, customers, investors, partners, supporters, believers, thank you for the opportunity to build together. You should feel proud that the company is bigger and will last longer than any individual person. I’ll cherish my 11 years as CEO working alongside you and will always carry this experience with me in my heart.
  • To my co-founder Steve, chief bottle-washer Pete, grumpy cat Robert, EQ coach Barkis, deal magician Tom, and contrarian Chris Hearsay with the yellow backpack, thanks for energizing me with your fiercely original ideas, continuously challenging my thinking and assumptions, and for your incredible GSD, support, and friendship over many years. I couldn’t have asked for a better band of misfits to be a part of and grow up with in my career.
  • To Bryan, Jon, Patrick, and Frank, thanks for your support through thick and thin, and for pushing me to act boldly and think bigger. In 11 years, never was there a wasted board conversation or meeting. You’ve always come prepared, been on point, and known exactly which parts of the business to push on.

It has been the privilege of a lifetime to serve as Hearsay’s CEO. As scary as this decision feels, I know in my heart I’m doing what’s best for our future. When the stars align, the choice is clear. I love this company, our team, and our customers, and am so excited for the decade ahead!

The Vitamin and the Painkiller – Where Does FinServ Fall?

Traditionally in business, a solution, product, or service is either a vitamin or a painkiller. Think about a vitamin — it’s a nice-to-have. When you remember to take it, you take it. If you don’t take it on a particular day, you usually don’t even notice — but over time, when you take your vitamins, you do feel better every day. Now, a painkiller? That’s when you have a major issue, you have a burning platform, you have to take care of it right away. Every moment that you don’t take care of it, you’re at risk.

The conventional wisdom is you can choose to build one or the other, but I believe that a great product does both: solves that burning problem right away … and makes you a little bit stronger to face tomorrow. In my recent episode of Masters of Scale with Reid Hoffman, I explored how Hearsay started as a vitamin (social selling), accidentally uncovered and addressed a huge pain point (compliance), and turned that into an even bigger vitamin (human-first digital).

This metaphor is relevant today when we think about the products being created at this moment. Everyone with an entrepreneurial mindset has been watching with interest as these new markets develop. Face mask makers. Food delivery services. Virtual conferences. Parents’ collectives to organize virtual classes and pods. We’re all serving as one another’s painkillers right now – creating products and services that keep us safe and connected.

But the standout products in this new market? Not only are they saving us pain, they’re also making us a little bit better. A little happier, a little more resilient. I look at a company like Second Wind, a small mask-maker in New York. This team of women created a custom mask design with a stylishly long decorative chain — adding a dash of verve that turns the mask into an upscale fashion statement. Is this product a painkiller? Yes. A vitamin? Also yes.

While I recorded this episode early on in the Covid pandemic, revisiting the session more recently made me realize, never has this metaphor been more applicable to financial services organizations than now. The pandemic has turned lives, and capital markets, upside down. In today’s uncertain economic times, financial services organizations are in a unique position – their advisors and agents are vitamins and painkillers for clients. There is a short-term urgency and long term necessity for clients and investors to connect with their agents and advisors for that authentic guidance and personalized advice – and it’s never been more critical than now.

Our economies have been changed by this pandemic, and when it ends, they will not look the same. Lots of the products and services we need now are painkillers: Right now they’re vital, life-or-death, but when we don’t need them any more, we won’t use them any more. On the other hand, the things we’ve grown to love during this time, the things that make us better, happier, stronger … we’ll make an effort to keep those, even after. Whether it’s your new Peloton, or a delivery service that’s a delightful improvement over schlepping to the store, or a new habit of checking in with your social networks more often and being more genuine when you do. Those are our vitamins.

So my advice on how to help your advisors and agents thrive throughout this time and afterward — it turns out, it is the same advice I gave Reid and listeners in the episode. Encourage your field to be both a vitamin and a painkiller. Solve an immediate need for their clients, and strive to make their long-term vision just that little bit better too.

Hearsay Partners with Salesforce to Close the Loop on Last-Mile Client Engagement

In 2020, we’re seeing a new engagement model emerge in financial services to support human connections in a remote-first environment. Driving business outcomes from the home office on personal devices has become a requirement, and therefore compliance for BYOD and new digital channels is a challenge that must be addressed now. Both Hearsay and Salesforce are focused on driving this transformation, and today we announced an expanded partnership to help financial services firms bring new capabilities to their field organizations. Read the press release here.

INVESTOR UNCERTAINTY

Individual investors, as they navigate the uncertainty and in some cases upheaval of their lives, are rightly feeling vulnerable and have substantial concerns over their financial futures. This may result in new risk curves for some, more price sensitivity for others, and across the board a desire for consistency and transparency to provide (at least a feeling of) control.  When the world is volatile and unpredictable, decisions are harder and more complex, so more in-depth advice is desired.

This reset of reality is also prompting many to rethink their long term plans – how they want to spend the rest of their lives, their priorities and goals, and what they feel is truly essential. With both more time and more concern to rethink their financial position, they may want to simplify their finances, change their risk profile, or realign with changing personal or philanthropic goals.

This represents both risks and opportunities for financial advisors. People who never thought about life insurance may now work with the first person who takes the time to explain their options. Auto insurance customers may become more price-sensitive and decide to move away from a long-time agent. Investors may simplify their financial plan and consolidate from several firms to a single advisor and bank. Some investors may need reassurance to stay the course, while others may need more compelling evidence to change their position.

One common need across these risks and opportunities is more immediate and proactive communications between financial advisors and clients. This means faster responses, more frequent one-to-one communications, and deeper dialogs. There is opportunity to take advantage of a more captive, focused audience, and engage with clients who rarely respond or want engagement.

ADVISOR NEEDS

Advisors who rely on community events to make new contacts and face-to-face meetings to develop prospect relationships have seen their marketing playbooks go up in smoke overnight. With regular channels of communications not available, they must adopt new digital channels that give clients choice and are just as easy, if not easier, to use. In some cases, their strongest benefit may be unavailable (e.g., their convenient branch location), creating the need for a business model adaptation as well.

At the same time as they are facing these challenges, they also face a huge opportunity to be there for clients when it matters most. There is a strong opening to discuss new goals and plans, building new levels of trust and connection. To make the most of this situation, personal relationships between clients and advisors need to become more digital, and digital needs to become more human.

Although extra support from corporate is clearly needed, digital messages alone without a human touch can be tone deaf. With the large amount of reassessment and planning happening at this moment, human advisors are needed more than ever, but without digital support, they cannot scale to meet the demand.

HEARSAY + SALESFORCE

Given this environment, advisors and agents are being far more proactive with their customers and prospects. As a result, Hearsay has seen a 300% spike in activity in our compliant channels. We are also starting to see the financial services industry strike a better balance between automation and authentic engagement. At Hearsay, we focus on providing that critical last-mile of customer engagement, and more than ever our clients are focused on connecting those activities back into Salesforce to inform the next step in a personalized client journey.

This is the foundation of the Hearsay-Salesforce partnership. The ability to capture activities including texts, call records, social media and website interactions back into Salesforce records is transformational for our joint clients. When we connect these last mile channels to Salesforce we’ve seen a 15x increase in the amount of data flowing into CRM. This provides new insights for our customers.

The other very exciting aspect of the partnership is our ability to leverage Hearsay’s compliance platform, including the automation and intelligence that allows last-mile programs to scale up for field deployments into the tens of thousands. The platform captures and supervises activity across digital channels to comply with global regulations for financial services including requirements from FINRA, SEC, IIROC, FCA, and PRA. Using an AI-powered alert system, Hearsay’s platform intelligently surfaces, tracks and remediates sensitive communications so that supervisors can focus on the highest-risk violations and be more efficient.

All in all, we are excited to address some of the biggest challenges in financial services CRM – namely regulatory compliance and adoption of CRM in the field. Our partnership brings together a complete customer experience across automated and last-mile, one-to-one channels. There’s more to come in the next few quarters, and we look forward to sharing more innovations this year at Dreamforce!

Hearsay a Finalist for Social Media Leadership Award

Hearsay Systems recognized by WealthManagement.com as a finalist for financial services social media award.

As a trusted leader in compliant last-mile digital communications for the financial services industry, Hearsay recognized the importance of proactively taking measures to Safeguard Social During COVID-19 right away.

Today, we’re honored to announce that these efforts earned us finalist status in WealthManagement.com’s prestigious 2020 Industry Awards, in the Technology Provider: Social Media Leadership category. Amongst more than 200 companies and 625 nominations this year, selection as a finalist recognizes Hearsay as one of the outstanding companies, individuals and organizations that make a real difference in the daily activities of financial advisors.

In volatile markets like we’ve seen with COVID-19, it’s essential that advisors proactively engage clients. Social media is a critical way for advisors to provide a steady drip of updates to keep clients continuously informed. These are key moments for building stronger relationships and developing deep client loyalty. But due to that same volatility, the risk of misinformation is heightened.

Financial institutions need to ensure social media content is accurate and representative of their firm’s view. To safeguard social in turbulent times, and empower advisors to deliver critical social engagement that strengthens client relationships, Hearsay arms customers with risk mitigation features to identify, prevent, and track sensitive communications related to COVID-19 and alleviate compliance challenges. These tools offer a scalable, intelligent defense for firms and their compliance teams, providing stronger, more efficient coverage against digital risk. By tracking these COVID-19 engagements, business and compliance leaders can understand how their field is operating amidst the pandemic and better assess advisors’ overall impact.

In this time of heightened uncertainty, when it’s critical for advisors to engage and reassure clients, Hearsay offers tools for the field to authentically communicate with clients while making it easy for corporate teams to quickly identify and effectively remediate problematic communications.

A panel of independent judges will determine the WealthManagement.com 2020 Industry Award winners who will be announced at the Wealthies Live Virtual Event, September 10, 2020.

Welcome Iain Duke-Richardet! Financial Services and Tech Compliance Authority Joins the Hearsay Team

Get to know more about Iain Duke-Richardet, Hearsay’s new Compliance Strategy Principal. Find out what a typical day is like, his take on RegBI, predictions for the industry, and more!

We’re thrilled that Iain Duke-Richardet has joined the Hearsay team as Compliance Strategy Principal! Iain joins us from Accenture’s Regulatory & Compliance Practice where he helped guide clients on a range of issues including regulatory change and reporting, technology-related legal and regulatory issues, cybersecurity, privacy, and more. Prior to his time at Accenture, he spent a decade in our customers’ shoes (some of that time literally) as a compliance leader at global financial services firms, including RBC Capital Markets and Goldman Sachs & Co.

We’re excited by the ideas and expertise Iain brings to the table, so we sat down for a Q&A to help you get to know him.

William: Welcome to Hearsay, Iain. Let’s start with an easy one – what is your typical day like?

Iain: I spend a lot of time with Hearsay customers sharing best practices and guidance to leverage Hearsay as a key part of their compliance strategy, including providing advice on governance, change management, technology infrastructure, and any other area of compliance and supervision that matters to their business.

I am also entrenched with industry regulators such as FINRA, IIROC, the FCA and others, as well as deepening relationships with trade groups like SIFMA and LIMRA. You’ll see me engaged in thought-leadership discussions, which is essential as I articulate Hearsay’s perspective on compliance.

Finally, the balance of my time is spent collaborating with Hearsay’s Product teams to continually infuse compliance into our solutions both as they are engineered today, as well as how the product offering evolves.

William: What’s your initial impression so far? Anything that surprised you?

Iain: That’s a good question. From working with Hearsay for many years I knew that compliance formed a foundational element of the platform. What’s been heartening to discover in the first few weeks is the commitment Hearsay has to developing in-house expertise. We’re building what I call a “Practice of Practitioners,” and that really distinguishes us; only Hearsay draws on a team with deep industry expertise to guide product development, regulatory interpretation and program support. So it’s been great to meet the team and recognize the depth of industry and compliance knowledge that is embedded throughout the firm.

William: What trends are you seeing in the industry lately?

Iain: The global pandemic has resulted in the emergence of new engagement models among our customer base, typically in an effort to replace the in-person connection. This has also been occuring in the context of a work-from-home environment. This has meant that compliance processes have been challenged and, in some cases, strained such that we have seen a number of adjustments being made to how supervision is performed, with an increased focus on efficiency. Among the trends are strategies to shift review between the lines of defense, to lower spikes in items to be reviewed, to expand the use of existing messaging channels, and to rapidly deploy compliance controls that enable the use of new messaging channels.

William:  Now let’s move on to a hot topic—RegBI. What have you learned from our customers regarding Reg BI? What is the traction for becoming compliant with these customers?

Iain: Many customers are well on their way to establishing the controls that will enable them to meet the new standard of conduct established by the rule. Many have spent time assessing and updating their business practices, reviewing and augmenting their policies and procedures where necessary, and evaluating their compliance controls.

Additionally, it’s important to recognize that Reg BI sets forth a standard of conduct that is ongoing. Firms are not just focusing on being compliant by the immediate deadline but rather are looking at building a foundation for ongoing compliance. Policies, procedures, technology, governance—the entire compliance ecosystem will need to be regularly evaluated against this framework to validate that firms are continuing to meet the new standard.

William: What are some of your overall thoughts on where compliance needs to head in the next year and 5 years? What are your thoughts on any of the other pending compliance or regulations that may be put into effect?

Iain: Over the next year, I expect to see the ongoing development of Privacy regulation, primarily as individuals and companies increasingly leverage the right to be forgotten under the CCPA, but also as other States design legislation of their own. I also expect there to be additional clarity to the FCC’s TCPA following the Supreme Court hearing in May. Both will pressure customers and their compliance organizations to have clear policies and well articulated processes to address the demands of these regulatory developments.

Over the next five years, I expect compliance organizations to double-down on two primary areas of focus. The first is to manage the continued pressure on the cost of compliance. Organizations seeking to optimize the cost of their operations have moved on from areas where gains were simpler (e.g., technology) to other areas, including compliance. Compliance leadership must exercise the levers available to it, such as functional organization (e.g., is Compliance solely conducting compliance activities?) and cost rationalization (e.g., technology, expense management, subscription based processes). Secondly, and relatedly, to what extent can technology be leveraged to simplify compliance tasks through machine learning, natural language processing, and automation. This is already underway within leading compliance organizations where systems have been upgraded to incorporate such advances, but I expect the next five years to see this continue and proliferate through the majority of compliance functions.

William: Let’s end on an inspirational note; what excites you about Hearsay’s vision?

Iain: While on the surface one may look at Hearsay and see a solution for marketing, for distribution, and for advisors and agents, in helping deliver omni-channel outcomes, Hearsay truly puts the compliance user-experience at the forefront. We’re passionate about making life simple for compliance teams. So as our customers empower advisors and agents with more channels to deliver outcomes across the digital customer journey, we’re simultaneously arming compliance teams with tools like universal supervision across multiple channels – including reporting of calls and text messages – to simplify supervision and review by offering a complete, contextual view of the client relationship. This helps teams administer programs more effectively across channels via Hearsay’s unified platform for maximum scale and efficiency.

William: Thank you, Iain. We’re excited to have you at Hearsay and eager to hear more from you!

Iain: Likewise, and stay tuned for more from me and the Hearsay compliance team as the year goes on.

Safeguarding Social during COVID-19

We’ve all seen the myths – many of us (author included) have fallen for them. Hold your breath for 10 seconds and you don’t have the coronavirus. Hand dryers kill the virus… garlic kills the virus. So many that the WHO has a dedicated myth-busting page.

In highly fluid, turbulent times, the risk of misinformation is heightened. We’re increasingly susceptible to both consuming and spreading content with misinformation. Social media and other client engagement channels are the front lines of this issue. For our customers, it’s critical to be proactive and provide a steady drip of updates to keep clients continuously informed. However, financial institutions need to ensure what goes out is both accurate and representative of a firm’s view.

To address these challenges, Hearsay’s compliance team has proactively built protective measures. For one, we’ve built a lexicon designed to identify, prevent and track particularly sensitive communications related to COVID-19. This offers a scalable, intelligent defence layer for your teams on the front lines of compliance, so your supervisors can focus on the highest-risk violations. And by capturing this information, business and compliance leaders can better understand how their field is operating amidst the pandemic and better assess the overall impact their efforts may have on policies, accounts, holdings and more.

Beyond suffering reputational and firm risk, spreading misinformation can put your clients and professionals at risk and contribute to broad hysteria. So how can we defend against this while keeping critical channels like social open to engaging clients and prospects?

  • Implement Safeguards. Leverage a dedicated lexicon in your supervision process to quickly identify and review client engagements that focus on COVID-19. This will help surface the most sensitive of communications, and offer your compliance teams the chance to review and remediate if necessary. We’ve built a COVID-19 lexicon that amplifies our Risk Meter and AI-powered alert system to surface and remediate risky posts for our customers. Together these tools offer better coverage and defense against digital risk while reducing the risk of misinformation on social, websites, and texting by focusing supervision on the most critical areas.
  • Stay on Top of the Data. By tracking COVID-19 communications, leadership has a direct view into field engagement insights in this environment. The information being shared can have material impact on their business going forward – it could impact renewal rates, coverage terms, portfolios, and client satisfaction. This is a time to dig deeper into the data to facilitate best behaviors and practices that drive loyalty.
  • Promote Trusted Sources. In addition, we recommend organizations build out their social content libraries with easy-to-share, trusted content with messaging from the corporate team or from a trusted senior official. Since this is the primary news topic, it’s also a great time to source third-party content from trusted industry sources. Hearsay offers curated content to our customers as well as offers the ability to “whitelist” – or trust – specific domains so you can more effectively source accurate, reliable content.
  • Adapt Quickly. Developments – both market and cultural – are extremely fluid during these times. Content that was suitable yesterday may not be today, and may even appear out of touch or insensitive. For instance, customers of ours had March Madness and spring break vacation posts planned. Hearsay’s Dynamic Campaigns allow for content to be quickly removed, affecting all subscribers and ensuring inappropriate content is removed.

Overall, encourage your teams to communicate openly with clients. It’s critical for advisors to proactively and immediately reach out to reassure clients that they have a firm grasp on their financial goals and are monitoring the situation. But protect them and your firm – ensure you have the tools and processes in place to quickly identify and effectively remediate any problematic communications.