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How technology is shaping investor relations departments

Bnamericas Published: Wednesday, July 03, 2019
How technology is shaping investor relations departments

Emerging technology such as robotic automation and artificial intelligence are starting to shape the profile of corporate investor relations (IR) offices, but still represent a minor part of tech investments made at these departments.

According to a Deloitte study carried out for the Brazilian investor relations institute IBRI, almost 70% of Brazil's open-capital companies have invested in new tools and ways of working, but only 8% applied data analytics, automation and cognitive technologies in their IR areas.

What is more, around 62% of the companies surveyed were not even thinking about adopting such technologies for IR functions.

The survey was conducted among 64 companies belong to the 30% of businesses with most liquidity listed on the Brazilian stock exchange; 75% of these companies are based in southeast Brazil, of which 54% are in São Paulo.

"There is an effort by most companies to catch up with the development of new technologies by investing in new ways of working. However, the application of more disruptive tech has not yet reached the IR units,” Ronaldo Fragoso, head of social advisory risk at Deloitte, said at a conference in São Paulo.

According to Fragoso, Brazil and Latin America in general are relatively well positioned for using investor relations technologies but still very far from Europe and the US.

Responding to a question from BNamericas, he said that the application of AI for investor assistance in chatbots is still low, but other potential AI uses exist such as for the analysis of client history and investment portfolios.

Even though advanced automation is yet to take off in IR departments, technology is already transforming other aspects of the IR workforce.

According to the study, roadshows and webcasts, with 81% and 65% respectively, are the preferred forms of respondents’ relationship with stakeholders and investors.

Meanwhile, apps appear in 17% of the multiple responses for such interaction and digital influencer campaigns are attractive for 6%.

According to IBRI's president, Guilherme Setúbal, the new generation of IR executives, investors and stakeholders will be less keen on face-to-face relationships.

The survey also showed that a growing number of companies is monitoring digital channels to check their image and possible fake news mentions.

"Companies in the digital world need to respond more and more quickly to rumors and citations, especially the negative ones," said Setúbal.

IR PROFILE

Among other findings, the study identified that two-thirds of IR professionals in companies accumulate roles in other departments, due to among other things, the fusion of areas within companies as response to the economic crisis.

However, according to Deloitte, from 2018 to 2019 the size of IR teams either grew or remained stable, but did not decrease.

The profile of the IR professional is also becoming more comprehensive.

According to Setúbal, one reason refers to the increase of attributions and functions of corporate governance in the face of new regulations.

But the changing profile also indicates more complex demands by investment funds, mainly foreign ones, that require much higher corporate governance practices than in the past.

"The IR professional has become more wide-ranging. He is qualified and generalist, almost like a general practitioner,” said Setúbal.

In terms of the skills needed for the future, in addition to customary characteristics such as critical thinking, 59% of the responding companies mentioned foreign language skills, strategic planning and financial expertise, proficiency in new technologies and 43% digital marketing knowledge.

As a result, future investors relations employees will less operational and more strategic.

The survey also noted an increase in the participation of individuals as opposed to companies among the share of investors since the last surveys.

Setúbal expects this trend to continue, provided good macroeconomic conditions are maintained, but said companies need to train IR professionals for customer support and adapt financial reports to make them more palatable to individuals.

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