An article in CityAM this week asked whether coronavirus will be ‘the tipping point for company communications’ in the financial sector.
Here we look at what the current situation means for financial services communications, and whether it will indeed create a sea-change in the way that firms communicate with clients and prospects.
Is the virus just speeding trends already in existence?
The article claims that while the word ‘unprecedented’ is used almost constantly at the moment. However, the ways that companies communicate with investors – and indeed the way the financial market in general operates – have not responded with similarly unprecedented change.
Instead, current circumstances have led to ‘the acceleration of trends that were already in place’. The article cites the example of the AGM, a tradition it claims ‘has been diminishing’ in value for some time.
How does this translate to investor communications?
Traditionally investors have been communicated with via a couple of routes, both of which have also seen changes in recent years.
The traditional channels of communication to investors were:
- Via brokers – whose research informed investor decisions (although they have played a less crucial role post-MiFID II, where they are often prevented from attending meetings between companies and their investors).
- Direct to the media – a route used particularly to release results-related news. This has also declined in importance in recent years, as the mainstream printed media has been supplemented and, in some cases, supplanted by new news sources.
Making it easy for investors to find financial information
Most if not all financial firms have responded to these shifts by including investor information on their websites. Often, companies have large areas of their site devoted to investors.
But this is ‘pull’ information – relying on the investor proactively seeking it out. Do firms need to do more to ‘push’ this financial data out to investors?
The CityAM article suggests that, while many financial institutions – and increasingly, not just the largest ones – use digital data to assess potential investments, they are not optimising their use of digital platforms to share their own investor information.
The article claims that even before Covid-19 became a factor ‘there existed a huge imbalance between use of digital data by investors and by companies’.
How and why should financial institutions use digital to improve investor comms?
The article suggests three key steps:
- Be comprehensive in your communications
Digital channels can be used to communicate all aspects of your business. This covers both financial data and non-financial information. All might be relevant to potential investors.
- Be proactive in pushing information out
But all too often, firms leave this information – as the article says – ‘inert, marooned on their website’. This is no use. Companies need to proactively take it out to current and potential investors.
- Grasp the opportunity that digital channels offer to promote your firm
After this crisis is over, the firms that have continued to communicate positively with investors will remain in the strongest shape. When face-to-face communication is impossible, embracing digital becomes an imperative rather than a nice-to-do.
Respond to changing circumstances
The article ends by claiming that ‘Coronavirus is accelerating the digitisation of investor communications, changing the way we interact with investors forever’.
In these – truly – unprecedented times, firms should take the opportunity to revisit their investor communications to ensure that they are taking every opportunity available to push the data they want investors to see via digital channels.
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