The first months of the year have, in my opinion, highlighted three trends which will continue to shape the digital investor relations scene: digitalization, regulation and globalization.
1. Digitization: Big Data, AI and Efficiency
More and more companies are arming themselves for digital change — in business models and workflows, as well as investor relations. It was very different 17 years ago when I founded the EQS Group. Digital investor communications was unchartered territory. But digitization has fully arrived in investor relations and is here to stay.
IR websites and digital business reports are now standard. The use of digital distribution channels for company communications has become indispensable. And yet improved technologies and greater bandwidths are creating new opportunities. We’re experiencing increased demand for webcasts or completely virtual events as a substitute for the traditional shareholders’ meeting.
Big Data and artificial intelligence will be the main factors influencing future investor relations. Why? Because issuers want to know more about investors. Big Data can deliver information on a large scale. In the future, IR Tools will make greater and more effective use of this kind of data potential. Artificial intelligence mechanisms personalize investors who are then recognized on the web and communicated with more directly. This is a tectonic shift in approaching investor relations.
At the same time, investor relations are being streamlined toward efficiency. Digitization will ease the work of IR managers if done correctly. And working from the cloud is a major step in this direction. IR work is becoming mobile, with all work processes linked to one another. In the end, complete IR ecosystems will emerge, as we have seen on smartphones. Our COCKPIT is exactly this efficient streamlined ecosystem for IR professionals. And we are already working to implement IR’s demands for the future.
2. Regulation: The Constant Demand for Transparency
The trend towards financial market regulation will continue in 2017. The EU started to put increased regulation into high gear with the Market Abuse Regulation (MAR) in 2016 and the trend is spreading to other regions, as well. In the battle to win international investors, companies are recognizing these investors demand for transparency and security. Regulators and stock exchanges demand nothing less, as well. We, for example, see this trend gaining strength in die Middle East region, where we opened a new office in 2016. Companies are now increasingly opening up to international investors there, strengthening its markets.
3. Globalization: Think Global
Investors are now looking for investments worldwide. And with digitization facilitating information retrieval like never before, internationalization is the natural result.
What worked for blue chip companies up until now is increasingly becoming the path for all listed companies: have a global IR strategy or be left behind. Targeting domestic investors only is a thing of the past.
Particularly in the US, we’re seeing that cross-border issues are becoming increasingly important. But financial markets in Europe and Asia are growing more closely together, as well.
Investor Relations has to meet these new requirements. Thinking globally is no longer an option but an imperative. Having a multilingual IR website is the bare minimum now. All communications have to be international. Global IR strategies, which were once the exception, are likely to become standard. In order to cope with this major shift, efficient solutions are required. Which leads us back to digitization…