Realizing the Potential of Artificial Intelligence in Investor Relations

Rapid advancements of technology have revolutionized and created new opportunities in investor relations. Innovations from data analytics to financial technology and artificial intelligence, all have transformed and potentially improved investment management capabilities. The evolution of AI has further streamlined investor relations, enabling effective data analysis and driving efficiency. For investor relations firms, the potential applications of AI are tremendous.

IR professionals these days are equipped with an influx of information, and they have become busier than ever. For them, innovation is essential and paramount to survival. That is why, most firms believe and seek to embrace big data and AI as a major enabler influencing investor relations in years to come. Investor relations, in the past, was a reactive function that retorted to market fluctuations and investor requirements as they arose. Now, the industry is able to envision events before they arise and communicate directly with a larger investment community using technology.

Significance of AI in IR

For any business success and growth in the market, investors play a significant role. Investor Relations (IR) refers to the amalgamation of finance, communication, and marketing to effectively control the flow of information between a public company, its investors, and its stakeholders.

In order to maintain robust, transparent relationships with investors, IR has become significant for businesses across every industry, enabling them to accomplish the best possible share price that resembles the fundamental value of the company. While there are mixed outlooks over certain aspects of the use of disruptive technologies, especially AI, they are certainly opening new windows of opportunities for the IR industry.

Today, the sector is becoming increasingly mobile, with all processes linked to each other creating a complete investor relations ecosystem. According to reports, Nasdaq and Q4 Inc. are leaders in adopting AI and reshaping the investor relations space from both an operational and a strategic approach.

Machine learning, a subset of AI and is a technical discipline where the most immediate impact for investor relations lies. The technology is applied to a voluminous amount of data that are produced at an unprecedented rate every day, delivering interpretations and recommended actions and enabling management to make more informed decisions and implement a strategy based on knowledge, instead of intuitions.

Machine learning will soon be able to assess a large number of conference call scripts and will let know if there was a change of tone among investors. In addition, AI can gain access to proprietary sentiment, instability and investor algorithms for all stocks, paving ways where investor relations teams shape their message and deliver information to investors, including perhaps what kinds of data they share with investors at key points throughout the year.

Apart from delivering benefits, the teams also must be aware of the risks AI can pose to businesses. IR teams need to comprehend how AI is being leveraged within their organizations and answer the ethical framework around the use of AI, risk mitigation processes and effective ways with appropriate knowledge and skills to deploy the technology within the business.