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    5 Tips for Digital Transformation in Financial Communications

    Even before my start at EQS, I dealt extensively with digital changes in investor relations. In the spring of 2017 and in cooperation with the IR club of Switzerland and the University of Applied Sciences in Business Administration Zurich, I produced a study titled “Checking Digital Fitness of Investor Relations” which examined digital changes in the financial communications of stock-listed companies in Switzerland.

    The study identified a number of strategic, structural and cultural challenges. The graphic shows the challenges facing (Swiss) IR managers in times of digital change:

    Challenges of Digital Innovation in Investor Relations

    What does this mean for financial communications? These challenges have produced 5 recommendations for action:

    1. Strategy is a Must

    Digital investor relations need a clear, forward-looking plan. In our empirical study, we were able to identify four key aspects of the planning process:

    • detailed situation analysis
    • determination of measurable and clearly defined objectives
    • in-depth discussion with the financial community
    • coordinating projects with IR strategy

    Also key to a strategic approach are binding time and cost plans, sophisticated measures for effective digital information transfers and KPIs tailored to them.

    2. Resources are Indispensable

    Personnel, time and financial bottlenecks often prevent a thorough and far-sighted digital transformation. It is particularly important for IR managers to alert decision makers to the urgency and relevance of digital technologies as well as their influence on IR. In order to secure necessary resources for the initiation and implementation of digital projects, one must demonstrate the opportunities and potential of digitized financial communication. Only digital investor relations are able to efficiently and cost-effectively avoid scattering losses as well as dialogue with the financial world independent of place.

    3. Form a Solid Foundation

    Financial communicators should have sound digital know-how and experience in order to be able to make expert decisions under time pressure with shifting conditions. Defining roles and responsibilities as well as choosing relevant key technologies is key to basic IR knowledge. Core processes, such as the dispatch of company communications, should be regularly assessed for the potential for improvement through digital, automated technologies. Relevant measures can be derived from these findings.

    4. Innovation must be User-Oriented

    A solid basis of expertise is key to mastering major challenges, including the realization of digital innovations. In order to ensure that digital initiatives cover "real" user needs, one must systematically involve relevant stakeholders in innovation processes. By surveying and analyzing customer data, IR professionals glean vital information to make improvements, which in turn are incorporated into the design of new IR tools. Fulfilling the needs of the financial community is also the best way to increase the relevance of your own communication offer in the digital world.

    5. The Right Tools for Your Goals

    Modern IR departments are not only distinguished by comprehensive know-how about cloud-based technologies and goal-oriented implementation of innovative IR projects. They also adapt their tools to new conditions created by the speed of innovation. The ability to admit mistakes and a willingness to take estimable and justifiable risks for IR are also important for digital progress in IR. Digitization has great potential for financial communications. Our study has shown that forward-thinking IR, supported by the right platforms and tools is fundamental to modern IR. User-oriented applications and targeted linking with existing channels ensures authenticity, credibility and effectiveness in financial communication.

    October 25, 2017
    October 25, 2017