How Technology Will Transform Investor Relations in 2021
COVID-19 has expedited the process of adopting technological processes in investor relations (IR), and many of these changes are here to stay. Previously used traditional approaches are disregarded and replaced with new technological advancements. With the constant changes in the market, it is important for IR professionals to be in tune with the pulse of the industry and market sentiment. Hence, a more proactive approach is required to achieve desired results.
On the other hand, investors are leveraging technology to gather information and analyze organizations. Instead of face-to-face meetings and static points, they now prefer virtual meetings and real-time financial models. In addition, investors are also interested in ESG (environmental, social, and corporate governance) initiatives, videos, podcasts, and the use of social media to disseminate information.
Investor Relations Trend of 2021
Research by Citigate Dewe Rogerson in 2018 shows the top four technological tools shaping IR professionals to communicate with investors. These tools include video content, social media, and CRM tools.
Let’s find out the key practices that IR teams should adopt in 2021.
In this technological-driven environment, targeting investors should be the top priority for IR professionals. Technological advancements, such as artificial intelligence, is an effective technique to identify and target potential shareholders. Besides, machine learning can also be utilized to process vast quantities of data and draw conclusions to tackle different approaches and strategies to attract investors.
Data analytics allows IR professionals to effectively target potential investors from specific regions. It allows them to gather more information about the investors’ interests, hence, improving roadshows and uncovering new institutions and analysts that were not previously on IR professional’s radar.
Due to the increased use of technology, more retail investors are entering the stock market, increasing the need for better communication skills in the marketplace. Therefore, a more proactive approach is required to meet the demands of the growing audience.
The new-normal demands to engage investors through virtual events, webcasts, webinars, and videos instead of traditional meetings. However, in terms of financial communication, there is a range of tools for effective communication:
· ML (what exactly is ML? Machine Learning? Need to write it out or explain what ML is) and natural language processing tools (such as?). allow you to test the potential impact of a language used before it is published.
· Sentiment analytic tools measure brand health by analyzing brand awareness and brand reputation of a company. Not only this, but these tools also gauge customer satisfaction and opinions customers have about the company.
· Advanced CRM technology assists to strategically engage with stakeholders by tracking and managing their reactions.
Over time, the inclusion of social media plans in IR strategy is gaining importance. It is a strong tool that companies can utilize to control the flow of information and reach their target audience successfully.
Using technological advancements, IR professionals can strategically align their social media plans to promote their company’s brand recognition and loyalty, display the company’s key messages in a cost-effective manner and redirect traffic to the company’s website. Furthermore, the use of sentiment analysis tools on social media data can also prove to be beneficial for investment decisions.
Today, technology plays a key role in shaping the investment strategy. There is a dire need to digitize investor relation processes using AI and ML (again — write this out or explain what Al and ML are), re-evaluate communication strategies and use social media to increase media coverage. Hence, it is crucial for investor relations teams to adapt to the speed of the changing environment and investor preferences. If you want to take a professional IR team on board, contact us right away. Pristine Advisers — www.pristineadvisers.com