From the land of digital innovation comes a strong wind of evolution that is shaking up the world of investor relations. Today, companies are taking advantage of technology to engage with their investors in ways that were once unthinkable.
While artificial intelligence (AI) is a hot topic, it’s important to remember that the digital transformation impacting investor relations isn’t just about integrating new tools and platforms. It’s also about revolutionizing the entire investor experience.
Imagine the following scenario: an investor sitting comfortably at home enjoying a cup of coffee can effortlessly access up-to-date financial reports, participate in virtual shareholder meetings and even communicate with company representatives in real time with just a few clicks. This level of convenience and accessibility would have been an unattainable dream just a few years ago.
So how are companies adapting to this new era of investor relations? What strategies are they employing to improve communications and engagement in the digital age? While many of us would like to pioneer and incorporate the latest trends and tools into our IR practices, the risks associated with being a publicly traded company are significant, and no IRO can ignore the potential downsides of these new trends. It’s therefore advisable to stick with tried and tested solutions for the time being.
Before we look at corporate strategies, let’s take a moment to appreciate the profound changes brought about by the digital revolution.
Virtual shareholder meetings – The era of face-to-face shareholder meetings is gradually coming to an end. Today, everything revolves around virtual meetings, which shareholders can attend from the comfort of their own homes. Many general meetings now take place online and invite participation from all over the world. Shareholders are also becoming increasingly involved. Online voting and simultaneous translation have significantly driven this upswing in participation.
Interactive investor portals – Investor websites have come a long way from being mere repositories of information. Today, they’re dynamic platforms where shareholders can access reports, watch video and participate in discussions. Most IR websites today are rich in resources and have a user-friendly design.
Webcasts and podcasts – Webcasts and podcasts have become refreshing new platforms for providing financial updates and insights into organizations. They offer a more interactive and accessible method of disseminating information. Various companies are using webcasts to share their quarterly results and discuss their strategies with investors and analysts. The exciting thing is that some of these companies are even inviting the public to tune into their streams and listen to their discussions.
Changes including the above mean organizations are increasingly using the following tools to improve communication and engagement.
Harnessing social media – Social media isn’t just about selfies or funny cat videos. Companies are using platforms like X and LinkedIn to share news, provide updates and communicate directly with investors. By setting up company profiles, business leaders are also using these platforms to engage with shareholders and the wider public.
Personalized content – The days when companies served up boring, standardized content are long gone. Today, companies are harnessing the power of data analytics to customize their communications. Let’s say an investor is interested in something specific, such as sustainability. Then he receives customized information on precisely this topic. This is a smart and effective approach that ensures companies provide investors with exactly the information they’re interested in.
Chatbots for instant support – Chatbots haven’t only evolved into tools for customer service. Nowadays, they’re increasingly used on investor relations websites and are ready to answer frequently asked questions immediately. The use of chatbots in IR on a global scale is an excellent example of this trend, providing quick assistance to shareholders. Whether it’s simple questions, such as those normally found in the FAQ section, or more complex questions on topics such as the company’s growth strategy or ESG mission, these clever chatbots have it covered.
Mobile-first – Companies are now focusing on developing specialized mobile apps that focus on investor relations. These handy apps allow investors to always have information at their fingertips. They are also notified of updates and, amazingly, they can participate in shareholder meetings by casting their vote – all from their smartphone.
Challenges on the horizon
In today’s world of endless digital communication, the importance of data security cannot be overstated. Companies are investing a lot of resources in solid, strong cyber-security measures. And why? They want to protect their investors’ sensitive information from prying eyes. It’s undeniable that data breaches can seriously damage investor confidence in a company. For this reason, data security is crucial.
We also need to consider the digital divide between investors. Not everyone has the same access to technology, which means we need to strike a balance between our digital and traditional methods of communication. This is important to ensure everyone is included, regardless of their access to technology.
The future looks bright as we move into the exciting digital world of investor relations. The blend of technology and IR will continue to adapt and open up ever-more innovative ways to communicate and engage.
Imagine a future where investors can virtually attend shareholder meetings using augmented reality. Or where AI-powered chatbots can predict and effortlessly answer investor questions. Imagine a world where the transparency of corporate actions is ensured by blockchain technology. These ideas may sound futuristic, but they aren’t. They’re part of the digital landscape companies are actively exploring and using.
To summarize, digital transformation in investor relations isn’t just a phrase – it’s an entire revolution that is redefining how companies engage with their investors. The practices we have mentioned barely scratch the surface. Companies are striving to provide their shareholders with an unparalleled digital experience that makes investing more accessible, interactive and insightful than ever before.
The digital landscape is vast and ever-changing, and it’s clear that as investors become more familiar with the nuances of the digital age, navigating this dynamic landscape will be an exciting ride, full of opportunities to learn and grow. So buckle up, fellow IROs! We’re about to embark on some truly exciting, unexplored areas in investor relations, all fueled by the limitless possibilities of digital transformation.
Müge Yücel is director of investor relations and sustainability at Galata Wind Enerji
