Investor relations (IR) teams are tough, resilient, and dedicated. COVID proved that. When the pandemic hit, IR professionals raced to embrace a new reality overnight, moving from primarily face-to-face meetings to video conferencing, data rooms, and other digital solutions to maintain connections with investors.
IR’s current need for technology, however, goes beyond virtual telecommunications. Confronted with market uncertainty, a 40-year high in inflation, downward pressure on performance fees, and expanding regulations that impact fundraising (such as the new SEC marketing rule), modern IR teams require modern IR fintech solutions if they are to contribute the greatest value to their organizations and investors. Here are four ways fintech solutions enable IR to deliver faster and better outcomes every day.
1. Gain More Time for Higher-Value Work
Last year, Backstop released the 2022 Alternative Investment Manager Productivity Survey. The proprietary survey asked investor relations and business development professionals what they cared about the most. Responses revealed that the most frustrating drain on the IR team’s time is manually loading fund administration data, reconciling it for accuracy and completeness, and addressing any anomalies. Nearly one full day out of every single week is spent this way (on average, 7 hours out of a 58-hour work week).
Having accessible, up-to-date, accurate fund admin data is necessary for the IR team’s work. What is not necessary is having skilled IR professionals waste their time manually acquiring, entering, validating, and confirming that data when the right fintech solution can automate the entire process. By integrating with administrators, a fintech solution can access investor relations data and import it directly into the institution’s platform. The solution can then perform the necessary reconciliations, flag any anomalies that require human intervention, and store the data in a central repository where it can be instantly located by the IR team.
With robust automation handling fund admin data, IR professionals can reclaim nearly an entire day’s worth of time each week. That time can be poured into higher-value work that draws upon their full array of skills and abilities.
2. Deepen Relationships with the Investment Community
Modern IR teams are responsible for building and strengthening relationships with prospects, clients, consultants, and other key parties. A fintech solution designed with investor relations in mind empowers IR professionals to consistently and intentionally maximize these relationships.
For example, a purpose-built fintech solution provides instant access to capital activity, investor balances, investor accounts, and statements so that IR professionals can deliver the superior service investors deserve. It tracks investors’ behaviors and preferences so that the team can systematically fulfill expectations.
But that is not all. By making both data and insights readily available, a fintech platform supports IR professionals in their task of proactively getting the right message at the right time to investors to ensure retention and growth of capital. This is particularly important during periods of uncertainty, fluctuations, and volatility, such as are occurring now. The Brunswick 2022 Digital Investor Survey noted that institutional investors do not appreciate investment narratives that are not backed up by data and that are not sufficiently tailored to the target audience. Rather, investors want transparency and a demonstrable understanding of and preparedness to deal with or capitalize on industry trends. Meeting these investor imperatives is only possible when the IR team’s expertise and experience is undergirded by technology that promptly delivers the information they need while simultaneously accelerating their efficiency and productivity.
3. Turn Impromptu Calls into Key Touchpoints
There is no such thing as a “regular” day in IR. Every day has its share of unpredictability; in fact, nearly one-third of the IR team’s time is spent handling unplanned investor communications. These impromptu calls, emails, and meetings are frequently triggered by questions or concerns regarding the status of the market and are critical investor touchpoints.
A robust fintech solution that automates the handling of fund administration data and makes information immediately accessible in a central repository helps IR handle impromptu investor calls with ease. The IR professional has up-to-date, accurate data at their fingertips to answer questions, address concerns, and provide insight to investors on the spot – without having to utter the dreaded words, “Let me get back to you on that.” This consistent, reliable client service is a differentiator most investors are searching for.
So, while nothing will lessen the number of unplanned calls that come to IR professionals, purpose-built technology can slash the amount of time spent searching for data to respond to those calls and support the delivery of world-class client service.
4. Demonstrating Value to the Organization
Another area where IR teams benefit from tailored technology is in tracking and measuring their activities. Key metrics include investor communications and engagements, new introductions and prospects, and – for IR professionals with dual roles – capital-raising opportunities and the number of finals. Beyond the metrics themselves, it is possible to drill down to the actual content of activities through meeting notes and supporting documentation.
The ability to provide detailed information for the IR scorecard fulfills multiple functions. It enables the team to compare where time is being spent with where it should be spent and make course corrections if necessary. It keeps the team on track and aligned with their goals and objectives. And it supplies both quantitative (meetings, deals, etc.) and qualitative (call notes, client feedback, etc.) proof of the value that IR is bringing to the organization.
Modern IR Teams Need Modern Fintech Solutions
A fintech solution designed for IR offers many more benefits in addition to the four discussed here. For instance, it can integrate compliance into everyday workflows by auto-archiving emails and watermarking fund marketing documents and streamlining the creation and sharing of reports and analytics. In fact, the right technology can be a differentiator for IR teams by demonstrating institutional readiness and enabling them to do their job more efficiently and effectively.
The bottom line is simply stated: modern IR teams need modern fintech solutions – and the best fintech solution will be a perfect match for the full scope of the IR team’s greatest vision.
To learn more about our solutions for IR professionals, download the Backstop Investor Relations datasheet.