Will the future of IR be powered by artificial intelligence? Webinar recap
22 March 2018
By Marla Hurov
Artificial intelligence (AI) is quickly moving from the realm of science fiction to reality. IR teams need to understand how they can harness its potential, especially in terms of surveillance, targeting, and activism. Q4 and IR Magazine hosted a webinar on March 19th, exploring how AI tools can provide actionable intelligence to improve the IRO’s workflow and performance. Moderated by Ben Maiden (Editor at IR Magazine), the panel of experts included Adam Frederick (SVP of Intelligence at Q4), Gregg Lampf (VP of investor relations at Ciena), and Kimberly Stewart (Head of Investor Relations at Solvay).
What is AI and machine learning?
While it might sound like the fantasy world of machines and high tech gone wild from movies like the Terminator or Minority Report, the technology for using AI in our daily lives is already here. According to Adam Frederick, the definition of AI is broad. “From the advanced cognitive capabilities of autonomous cars and robots, to everyday technology like Alexa on your smartphone, Google on Google talk, or a Nest Learning Thermostat, it’s all machine learning.” When it comes to IR, he continues that AI technology can “sift through mountains of data from various and disparate sources like real-time equity, options trading, business cycles, commodity prices, fund flows, and high frequency trading models. AI can pull them all together in real time and convert them into easily digestible and actionable intelligence for the IRO.”
AI can be leveraged for surveillance, targeting, investor sentiment, as well as market expectations, structure dynamics, and analytics. By synthesizing and making sense of various, and often disparate data sets, it can give the IRO a greater understanding of the driving forces behind trading. Essentially, AI offers a depth and breadth of intelligence that’s faster, more accurate, and objective than any analyst could humanly provide. Also, machine learning means that an AI engine will become increasingly skilled at spotting correlations and patterns in the data.
How are IR teams using AI?
For Gregg Lampf, “it’s all about creating insights.” He explains, “we’re challenged with how much we can review, never mind internalize and act upon. We watch different types of trading portals with all kinds of data coming at us in real time.” Whether it’s looking for ownership relationships and trends, determining the impact of your outreach, or analyzing the effects of sentiment on trading, it’s an overwhelming challenge to predict and track the outcomes driven by the IRO and the surrounding market’s activity. This is where there’s a tremendous opportunity for AI. According to Gregg, “Right now, all of this is manual. We can get these insights, but it’s really about timing. We all want to make decisions as quickly as we can, and that’s where AI can come into play.”
His company, Ciena, recently launched an AI product for optical communication products. It measures resources across service provider networks and produces on-demand content like Netflix. For Gregg, “The opportunity for IR is how we can apply this kind of intelligence and insight to make information more actionable. I rely on my surveillance expert, but if I can introduce AI and add science to the art, it can help both of us do our jobs better.”
What are the benefits of AI for IR?
Kimberly Stewart recently tested how AI could potentially help her with market perception. Using a third party, she executed a perception study interviewing 20 investors, in combination with an electronic survey, which was sent to all of the investors her team met over the last 12 months. She then took these results and measured them against analyst reports that were generated by an AI tool. The AI-driven results closely matched those of the perception study and survey, at a fraction of the cost.
She sees a lot of value for using AI, especially for deciphering conference call language, market sentiment in relation to her peers, as well as smart investor targeting. Kimberly summises that AI offers “something much more sophisticated than a quick and dirty survey to the investment community and sifting through a pile of analyst reports.” Sharing this kind of high powered intelligence with management will not only offer deep insights about investors, but also the company’s overall picture for better decision making.
Adam Frederick adds, “AI can do everything humans can do, but just faster and more accurately. It can find correlations in the data that humans sometimes can’t see.” He points to Q4’s Activism Alarm as an example. The alarm’s AI-driven algorithms are designed to spot triggers in trading data and typical patterns in activist behaviour. He also sees the power of AI for “looking at sentiment and how the money is positioned in the marketplace.”
What is the future of AI and what tools do IROs want?
At the highest level, Gregg Lampf envisions using AI to help IROs anticipate and plan. He explains, “if I can apply AI to look at how effective my program is and where I need to make improvements in terms of outreach, to analyse how predicted ownership actually played out, that would be really helpful.” For him, AI technology should be embedded seamlessly into our workflows, while continuing to keep the IRO as an integral player in understanding businesses and markets.
Adam Frederick believes that we’re only scratching the surface with advances in AI. At Q4, he’s seen the strongest traction on the surveillance side. He predicts that what’s next to come is automating the IRO’s entire workflow. He anticipates that AI will be able to forecast the IRO’s calendar with proactive meeting insights. And when it comes to smart targets, he believes that AI will be able to determine the likelihood of funds buying a stock in the next six months or so. In terms of analytics, he expects that AI will be able to forecast an IRO’s success, by analyzing hit rates and the outcome of meetings, as well as comparing past and present market sentiment.
It’s clear that AI technology is becoming increasingly smarter and more intertwined with our everyday lives and workflows. From investor sentiment and market expectations to earnings call analytics and activist signals, IR teams are already leveraging AI to help digest intelligence, so that’s it’s immediately actionable. The key is to find the right products and partners that are strategically integrating AI into their offerings. Adam sums it all up, “It’s not about automating you out of a job, but automating processes so you can focus on increasing multiples against your peers and drive value for you and your shareholders.”
Marla Hurov is the Content Marketing Manager at Q4 Inc and blogs regularly about trends in IR and digital communications.