Beginning to change the game: AI in IR

If you go back to ancient Greek literature, philosophers like Aristotle and Plato wrote about the possibility of creating intelligent machines that could perform tasks in a human-like manner. Today, artificial intelligence (AI) dominates the headlines and is impacting our everyday interaction, from dinner recommendations on food delivery apps to wearable tech diagnosing early signs of medical trouble.

Following my colleague’s dissection of why AI will likely augment the work we do as communications advisors, I thought it was worth exploring ways in which it is already exists in the Investor Relations (IR) industry.

Traditionally, IR has been seen as a field which needs a human touch and a friendly face. While this is still fundamentally true, there have been a number of interesting developments which have made it increasingly important for IR professionals to have a firm grasp on AI, and how it can be used to our clients’ advantage.

The first of which is in financial media and the rise of programmed journalism. This can be seen most obviously at Bloomberg and their increasingly sophisticated Cyborg algorithm. For several years, the firm has been investing in AI software which analyzes financial reports as soon as they are released and almost instantaneously publishes news items which incorporate all essential information.

In March, Bloomberg also announced updated information on their Automated Intelligence system, highlighting its capability to predict market events with Natural Language Processing and sentiment analysis. For an IR professional, it is becoming important to understand how these systems work and their limitations to evaluate how a client’s messaging and key figures are included in automated articles. Failure to do so could have a material impact on trading at market open.

AI has also been tipped to start encroaching on one of the very cornerstones of the IR profession. Gartner, the prominent Management Consultants, expect 90% of material in quarterly financial reports to be synthetically generated by the year 2025. That is a significant upheaval of the results process engrained in many of those from our industry.

There is a danger of looking at developments such as these as a threat to advisors, but I would disagree. In my colleague’s article mentioned above, this level of automation frees up a significant amount of time for IR practitioners to think more deeply about the core messages they are trying to convey and the overall equity story they are trying to tell.

Not only is AI set to streamline the work we can do for our clients, it also promises to fundamentally change their businesses.

A report by CCW Digital recently suggested that by the end of the year, over 80% of organizations will be looking to implement some machine-response capability.

This creates an imperative for comms advisors to understand these systems in order communicate the commercial benefit they are having in their clients.

Indeed, in a recent IR Magazine Webinar, speakers urged IR professionals to use ChatGPT and other artificial intelligence technologies in their daily work to gain a better grasp of this new technology. Efficiency, thoroughness of data assessment, and the ability to accommodate a talent that would otherwise need to be outsourced were just a few of the benefits which were discussed. Christoph Greitemann, a senior IR manager at Deutsche Telekom, said that his group utilized ChatGPT to write website content and postings for social media. Although the feedback was “never exactly what was needed”, he acknowledged that 80% of it is there, leaving 20% to finish manually.

However, this is not to say that utilizing artificial intelligence in Investor Relations will be without complication. It is a profession that is dominated by various regulations which will take time to catch-up with AI. In the interim, a level of human due diligence will be essential to catch any mistakes or inconsistencies thrown up. Furthermore, AI is still a nascent technology, particularly for this industry, and it is difficult to truly estimate the extent of its positive impact.

Nevertheless, while IR teams should remain cautious about using this technology, it is undeniable that AI will continue to change the nature of Investor Relations and reshape the financial landscape. Being an authority on the space and knowing how to best use it can give a competitive advantage that sets advisors apart from the competition.

As artificial intelligence (AI) continues to grab headlines, it is becoming increasingly vital for communications advisers to understand its impact on clients and our industry. Russell Shen from CDR’s US office, has put down his thoughts on how AI is transforming the Investor Relations (IR) industry. He emphasizes the critical need for IR professionals to keep themselves abreast of new AI developments to stay ahead of the curve and effectively serve their clients.