Remember (to verify) the Human
The role of AI in the future of Investor Relations
Greetings from Chicago! The Stakeholder Labs team is excited to spending this week attending NIRI’s Annual Conference and connecting with professionals in the IR industry. If you are at the event, please drop by booth 515 and say hello!
Artificial Intelligence has started to carve out a place for itself in almost every sector, opening the doors to more advanced processes, deeper insights, and improved business models. One of these sectors, Investor Relations, stands on the cusp of an AI-induced revolution by delivering potent insights, anticipating market trends, and bolstering stakeholder communication. We're witnessing glimpses of this future: from Disney's CEO Bob Iger expressing openness to using AI-driven avatars for earnings calls to Box CEO Aaron Levie demonstrating AI's swift aggregation and analysis of earnings information. Moreover, NVIDIA, a leading AI developer, has seen its stock value skyrocket nearly 40% in just 30 days, making it the world's sixth most valuable company. However, amid this incredible digital transformation, we are reminded of a key principle from Reddit: remember the human. By keeping this human-centric perspective in focus, we can identify the primary hurdle obstructing the full realization of AI's potential in IR: the lack of trustworthy, real-time shareholder data.
Confronting the Shareholder Verification Challenge
The importance of accurate data and the ability to authenticate a real human interaction is top of mind for many AI pioneers and addressing this challenge is a prerequisite for successfully integrating AI into our society. Earlier this month, OpenAI’s Sam Altman announced a $115M raise for a crypto project called Worldcoin which “aims to distribute a crypto token to people just for being a unique individual”. While blockchain technology and pairing a cryptocurrency with retinal scans may offer a unique solution for establishing identity on the internet, it is our belief that introducing strategic digital tools into our current financial and regulatory framework will be the most effective way for solving this problem. Today, when investors purchase stock through their brokerage account, a series of transactions takes place behind the scenes over the course of several days between brokerages, clearinghouses and transfer agents to settle the purchase which makes identifying a company’s shareholders incredibly opaque. In most cases, publicly traded companies do not have a conclusive or actionable list of their shareholders and we already have begun to see in other industries the embarrassing consequences of artificial intelligence applied to problems with poor or incomplete data sets. Stakeholder Labs is confronting this challenge and has designed an innovative solution that enables shareholders to self-verify with their digital brokerage accounts on a company’s owned and operated web properties. This creates an accurate, up-to-date digital record of a company’s shareholders, and through this, we have turned the critical and costly task of shareholder identification into a manageable, efficient process.
How AI and Verified Data Could Change Investor Relations
The insights drawn from verified shareholder data can help companies better understand who their investors are, their preferences, and their behavior, significantly enhancing communication, interaction and loyalty. In many instances, companies have already gathered large amounts of this information about their customers but have no way of verifying which of their customers are also shareholders. Let’s take a minute to imagine an AI-enabled shareholder experience leveraging verified data:
Personalized Communication: For all the investors who have received a startling, anonymous email in all caps from their brokerage asking them to participate in a proxy vote knows there has to be a better way. Instead of brokerages sending generic messages with no clear value proposition for participating, every shareholder would receive personalized messages from the company tailored to their specific relationship. A long-term shareholder should always receive a direct message appreciating their loyalty and a summary of the company's performance during their hold period and AI will allow publicly traded companies to execute this important brand moment at scale.
Improved Accessibility and Responsiveness: Investor Relations teams within companies are relatively small and can be overwhelmed with questions and requests from thousands of individual investors. As a result, many IR teams only focus on their largest institutional investors and retail shareholders are left to engage with each other on social platforms such as Reddit or Twitter. We saw first-hand with the ‘meme stock’ phenomena that individual investors can be quite powerful when they form digital communities that are not engaged appropriately and AI would facilitate 24/7, personalized shareholder chatbots, making companies more accessible and responsive to shareholders increasing trust, satisfaction and loyalty.
Proactive Engagement: Can you imagine the effectiveness of a marketing department if they only sent communications to customers once a year to directly solicit a purchase? Many IR departments take a similar approach by only communicating directly with their shareholders once a year during proxy season and proactive engagement is an area we expect to see a systemic shift in the IR industry. Once shareholders have been verified, companies can use AI to proactively engage investors like a marketer would with content, rewards and experiences intended to increase shareholder loyalty. This could involve providing predictive insights, offering a personalized experience or discounts on the company’s products, or delivering relevant information based on a shareholder's investment and customer history.
Digital shareholder verification is a crucial component to remembering the human during this period of technological transition and unlocking an AI-enabled IR industry. As a company operating at the unique intersection of financial technology and investor relations, our mission is simple yet far-reaching: connect issuers with their shareholders and equip them with accurate, up-to-date shareholder data, thus enabling AI to truly unfold its potential in the IR industry as a critical tool for increasing shareholder loyalty. Furthermore, shareholder verification is essential for ensuring the security and integrity of shareholder transactions and interactions, which is particularly important as companies increasingly leverage AI to facilitate real-time engagement and automate processes. In essence, shareholder verification not only enables a more personalized and secure IR industry but also fosters trust and confidence among shareholders, which are key to the successful integration of AI in the IR industry.