Cybersecurity attacks are becoming so common that it’s no longer a matter of if a breach will occur but rather when. Hackers are looking for vulnerabilities in your system 24/7 and in today’s digitalized world, their efforts have never been easier, or more successful. Over the last 12 months, 66.2 percent of financial organizations faced at least one cyber security attack. And the global cost of cyber crime is estimated to reach $2 trillion by 2019, a threefold increase from the 2015 estimate of $500 million.

Cyber breaches can cause any number of business challenges, from financial and reputational damage to a loss in shareholder value. For public companies whose websites house sensitive information such as quarterly financials, press releases and more, the stakes are high. The best defense is to understand security best practices and partner with an IR vendor who puts them into action.

Here are five key security measures you need to know about to help you stay ahead of future attacks.

Passwords: The necessary evil

How many times has IT reminded you to create a unique password (using letters, numbers and symbols)? The purpose: secure access to your resources. For many, the weak link in the authentication chain has been the much maligned “password”, however, new and secure technology trends are on the rise.

Many companies, large and small, are looking to new authentication trends such as: Two Factor Authentication (2FA or TFA). 2FA is an extra layer of security often referred to as two-step verification. The first step is the password and the second step could be PIN, token or smartphone app that is only accessible to the application user. 2FA makes it harder for attackers to gain access to your IR web application because knowing the password alone is not enough to pass the authentication check.

Data Encryption: Mathematical algorithms at work

Encryption, a system of mathematical algorithms that encode user data so that only the intended recipient can read it, is one of the best methods to safeguard your privacy. Using Wi-Fi to connect to the Internet is convenient, but in terms of security, there’s always a trade-off as it isn’t difficult for an intruder to intercept your connection, which could result in stolen user credentials and other sensitive data. This is why many websites use a protocol called HTTPS for encrypting data that’s being sent between sites. While this doesn’t guarantee absolute security, the risks are reduced as information being transmitted can only be decrypted by a destination site.

Before selecting a web partner, make sure their solution provides encryption of data in both Transit (SSL encryption) and at Rest.

Patch Management: Vital for online security

As you know, the cyber threat landscape is evolving at breakneck speed. While cyber criminals are able to compromise a system in hours or minutes, the reaction of companies usually takes months or even years. In fact, 18 percent of new malware remains undetected in the first 24 hours and 2 percent continues 3 months after infection, according to IDG Research.

For many companies that are implementing new technologies one of the top priorities during the planning phase is security. A critical aspect of security is Patch Management: the process of repairing system vulnerabilities that are applied to different parts of information systems, including operating systems, servers, routers, desktops, firewalls and many other components that exist in a network.

To protect from malware and ransomware and other external attacks, it’s important to work with a partner who conducts regular security patches to your website and hosted servers. The importance here is the prevention of viruses like Zero Day Attack or WannaCry, which have the potential to take down a company’s entire network.

Monitoring: Around the clock website check ins

Website downtime not only affects the end user’s experience and productivity, it ultimately affects a company’s bottom line. Proactively monitoring the network around the clock is an important pre-requisite for any organization wishing to protect itself from a potential security breach. There are various monitoring tools (New Relic, Splunk, Pingdom, IDS, Log manager, SCOM, etc. available in the market that allow infrastructure and security teams to monitor both up-time and any security breach in a network.

Security Assessment: Third party independent security reviews

Regular IT security assessments by a third party is key in preventing gaps in the application or infrastructure security. The third party independent vendor tests the application against OWASP standard. This universal security standard ensures the application is built following security best practices and is protected against attacks like SQL injection and cross-site scripting. IRO’s should be requesting the third party audit reports before deciding on the final solution. These third party security reports are similar to a home inspection before purchasing a house. Third party independent reports will provide insight into the security of an IR web application.

With cyber threats on the rise it is critical that you prepare for a cyber incident with the same discipline and rigor as you would an operational one. This means getting up to speed on security best practices, taking the necessary precautions internally, and partnering with a vendor that has the measurements in place to mitigate risk and keep your information secure.

Vee Punia is Director, IT & Infrastructure at Q4 and holds over 17 years of experience in IT Infrastructure Management, Security operations, ITIL Change Management and Service Delivery of Enterprise or SaaS platform. 

The post Five security measures you need to know about to stay ahead of future attacks appeared first on Q4 Blog.

       

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There’s a lot to keep up with in Investor Relations for 2018. Extensive new regulatory requirements will bring change while new technologies will present opportunities as they seek to improve the accuracy and efficiency of IR programs. To get a better understanding of this year’s trends impacting the IR space, we caught up with industry experts including: Gary A. LaBranche, NIRI President and CEO, Darrell Heaps, CEO at Q4 Inc., Ben Ashwell, Digital Editor at IR Magazine, Amit Sanghvi, Senior Director International Advisor at Q4 Inc. and Adam Frederick, SVP Intelligence at Q4 Inc. and asked: what do you see as the big trends in IR for 2018?

Trend #1: MiFID II will bring sweeping changes

Amit Sanghvi (AS): The expectations are already well known: progressive shrinking of the European sell-side analyst pool, improved quality of research and an increased burden on European IROs to connect directly with the buy-side. But beyond that, I suspect MiFID II will start to be felt globally. My guess is that buy-side firms and their clients who, in theory, will benefit from better quality equity research and enjoy tighter spending control will demand the same from the sell-side the world over.

Gary A. LaBranche (GL): While the SEC has given a 30-month reprieve to brokers, we still expect to see a continuation of the erosion of sell-side research coverage for small and mid-cap U.S. companies, which will pose significant challenges for their IR teams. We expect that some companies will increase their investment in IR and expand their investor outreach efforts to help offset a decrease in coverage.

Darrell Heaps (DH): Certainly MIFID II is a massive trend for 2018. Although the impact in non-European markets may take longer to disrupt things, the trend and impact to the sell-side, buy-side and corporates seems very clear to me. For a large number of corporates, there is now an increased need to understand their current shareholders and proactively target new investors into the stock. The world of relying solely on the bank to take you out is quickly disappearing for most corporates. In demand companies will still have the sell-side reaching out, but even these popular firms will need to manage direct inbound requests for meetings from the buy-side, who are increasingly building their own internal corporate access departments. IR departments of all sizes are going to need to take matters into their own hands, in terms of marketing, targeting and meeting with investors from all markets.

Trend #2: Investors will continue to seek greater transparency

GL: Most U.S. companies will be making their first disclosures under the SEC’s CEO pay ratio rule during the 2018 proxy season. We expect that many IROs will take an active role in advising their management teams on how to address the concerns of investors, employees, the news media, and other stakeholders over this new disclosure. U.S. companies also are facing increased demands from governance activists to improve board diversity, while the rise of passive investing strategies likely will mean that IROs will face more governance-related inquiries in 2018.  

Ben Ashwell (BA): During last year’s proxy season we saw that investors were willing to side with activists on an unprecedented scale (at Arconic it cost the CEO their job) and were willing to vote against companies on climate-related proposals (at Exxon Mobil, Occidental and PPL Corporation) and against the nomination of certain board directors. As investors make greater efforts to connect the dots between their portfolio managers and investor stewardship teams, ESG will come into sharp focus. If IR is to be taken seriously by the Street, it should be able to answer questions relating to board diversity and composition, executive compensation, environmental risk and disclosure, political lobbying and a range of other ESG issues. Consulting investor’s voting guidelines is a good way to get briefed on their positions on ESG issues, as is reviewing the various governance frameworks that have come into effect.

Trend #3: Passive investment strategies continue to gain popularity

AS: We will see continued flow of funds from active to passive strategies. However, I believe the line between what is passive and active investment is set to be blurred with the advent of roboinvesting. Suddenly, like passive funds, active strategies will be dependent more heavily on data (and algorithms) rather than traditional stock picking by humans. What remains to be seen is how the IR community will adapt to this both in terms of managing any perception gaps created by algorithms and soliciting votes.

DH: 2018 will see no slow-down in the flow of funds from active to passive strategies. Algorithms will form the basis of investing decisions. For IROs looking to adapt to the rise in passive investing, survival lies in the ability to leverage data to tell a story and intelligence to interpret what the “machines” are doing. Unlike the active investor, machines don’t care about your qualitative story. It will be the job of the IRO to understand the underlying algorithms and leverage data in the required format.

Trend #4: AI & machine learning finally become mainstream.

AS: For too long – forever even – IROs have had to put up with intel that lacks in terms of quality and quantity when compared to what investors have access to. I think 2018 is the year when firms like Q4 will arm IROs with tools powered by artificial intelligence that truly help each IRO fight for capital with a focused plan.

Adam Frederick (AF): Artificial intelligence has gone from a buzzword to a real solution and will no doubt play a critical role in the evolution of the IR workflow. While we have already seen applications of these technologies put into play, 2018 will be the year its leveraged at scale in the IR world. These technologies will allow IRO’s to increase targeting efficiency, track investor engagement, analyze investor behaviour and improve corporate access.

Trend #5: The rise of Cryptocurrencies continues

DH: It is impossible for anyone who has access to the internet to not have heard about Bitcoin, the most popular cryptocurrency in the world. Although not a trend for IR in 2018, I do think it’s one of the most important trends for anyone connected to the capital markets to understand.  My reason is not bitcoin per say, but the underlying technology called “blockchain” and the explosion of “Initial Coin Offerings” or more recently ‘Initial Token Offerings” and Ethereum, which utilize the concept of “smart contracts” programmed into the blockchain. These smart contracts have the ability to function like a share certificate with a built in shareholders agreement and have the potential to be highly disruptive to the capital markets as we know them today. The impact of this is still a few years out, but for those in IR, it’s important to understand the tectonic shifts that are upon us.

Conor White is currently hustling in the Marketing team at Q4, and a passionate contributor to the Q4 Blog.

The post What do IR industry experts predict for 2018? appeared first on Q4 Blog.

       

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Earlier today, Q4 introduced iris: a new AI engine for investor relations that integrates machine learning, big data analytics and NLP to analyze and process high volumes of fragmented market data. The result: improved investor engagement and shareholder quality, leading to lower volatility and higher multiples.

Phase one of this revolutionary product, available today in the U.S., is applied to Q4’s stock surveillance business, where it has been achieving accuracy levels of real-time ownership that, until now, have been unheard of in the market. And because of iris’ accuracy levels, Q4 has also announced its commitment to proactively report accuracy results to clients, along with a money back guarantee on maintaining accuracy above 80 percent.

We caught up with Adam Frederick, SVP, Intelligence to understand how iris originated, its future role in IR and how AI is changing the capital market landscape.

Lorena Reyes (LR): This is a very exciting day at Q4 with the release of iris into the marketplace. Tell me about iris. 

Adam Frederick (AF): iris is the culmination of three years’ worth of development by Q4’s quant team, our experienced analysts, market experts, and former floor traders. It initially began as a way for Q4 to better monitor real-time trading flows in both the options and equity markets. But over the past 12 months, iris has transformed into a fully-functioning AI-engine that drives the entire Q4 intelligence platform.

(LR):  iris’ accuracy is unheard of in the market and changing the game. Perhaps the biggest impact to the market is Q4’s accuracy guarantee. I’ve got to ask: how and why?

(AF):  Within the first several weeks of putting iris to the test, and then backtesting her results, we were witnessing a level of accuracy never seen before in the industry. We found that our average accuracy in predicting shareholder activity was north of 80 percent for all US stocks, regardless of business cycle, macro-environment, sector or market cap. The intelligence produced by iris is accurate, there is no denying it.  So why not stand behind our data, and be accountable?  

Q4 is the only surveillance provider to officially guarantee its accuracy by self-reporting on it to clients each quarter, and, on the off chance we fall below our guaranteed target, we offer a rebate. This ultimately makes Q4 accountable and gives our clients the piece of mind to know they are getting a quality product that their provider stands behind. It allows IROs to feel confident in our data, and pass the intelligence upstream to their management.

(LR): Why has nobody historically been able to stand behind this data?

(AF): The reason no other surveillance firm has been able to make this kind of claim  is that the model hasn’t lent itself to it. Traditional stock surveillance is only as good as the analyst and limited to the amount of data he/she can digest. With humans there is room for error and subjectivity. But an analyst armed with iris – now that changes the game. 

(LR): AI technologies are changing many industries, and the way people work. How is AI impacting the IR landscape?

(AF): Q4 has been the leader in bringing AI and other innovative technologies to the IR space. That said, leveraging AI within the IR Workflow is still a very new concept, and I believe we’re still only touching the surface of what we can do with it. To date, we’re seeing the most significant advancements in shareholder monitoring (stock surveillance) and market structure analysis (deciphering order flow characteristics & drivers in real-time). With the traditional surveillance model an analyst is typically able to look at a few hundred lines of data, for 8-10 companies, in an average work week. Conversely, AI-driven intelligence, such as iris, sifts through millions of lines of data, and billions of individual data points, for thousands of stocks, in a matter of minutes. And as an added bonus to that, AI takes out the human bias and subjectivity. Therefore, our results are not only deeper and more informed in their basis, but decidedly more accurate as well.

(LR): We talked about how AI is changing the IR landscape. Can you talk to how it’s changing the way IROs work?

(AF): With better accuracy comes intelligence that an IRO can truly trust and act upon. Additionally, and this is important to note, iris is not only driving Q4’s surveillance efforts, but in utilizing machine learning and big data analytics, we’re able to empower our clients with deeper insight into such areas as: trading dynamics, market structure analysis, short-selling, sector rotations and trends, predictive analytics around shareholder sentiment and market expectations, forward-looking trading assumptions, etc. The sheer volume of data ingested and analyzed by iris daily is unmatched, and her results speak for themselves. It’s accurate, actionable intelligence that arms IROs with a real-time feedback loop, which leads to better stakeholder communications and messaging, lower turnover and dampened volatilities, and ultimately, higher multiples. In short, AI is improving the efficiency and effectiveness of the IRO Workflow.

(LR): How does iris differ from what is out there?

(AF): Artificial Intelligence is a term that is too often thrown around. For instance, having an algorithm that can decipher if/then statements to produce “AI-targets,” is nothing revolutionary. Technology like that has been around for 20+ years. What’s different about iris is that she is an intelligent being; the brains behind Q4’s Intelligence Platform. The system learns, and gets smarter as time goes on. It infers and makes interpretive decisions. AI-platforms, like iris, anticipate and predict what’s to come next – both from the market’s standpoint, as well as in how the IRO is likely to react.

(LR): We’ve now released phase one of iris. What’s next?

(AF):  Without giving too much away… In the future, AI-driven platforms will empower IROs with easily digestible intelligence, proactive next-step workflow suggestions, and complete transparency around shareholder engagement success or opportunities. In a true AI-platform, the IRO no longer is at the center of the process, driving the steering wheel from module to module. Rather, the platform itself, this intelligent being, has the controls. The platform will make smart and intuitive suggestions, anticipating your every move, and allowing you to focus on what matters most – driving value, and expanding market multiples.

The post Meet iris™: the AI engine set to revolutionize the IR space appeared first on Q4 Blog.

       

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As global markets continue their momentum, competing for capital has become more challenging than ever. IR teams are facing more scrutiny and pressure as they battle against peers for institutional investors to allocate more assets directly in their company. In today’s fierce market, IROs need to be sure of both their investment proposition and that they are meeting with the right investors, at the right time.  

As IROs continue to adapt to a new market environment, they are turning to new technologies such as Q4 Desktop to attract new buyers to their equity, generate a broad and stable shareholder base, ensure management spends time with the ‘right’ people, and improve the overall quality of the institutional shareholders.   

With today’s release, Q4 Desktop’s CRM is more robust than ever, integrating new features and functionality, such as a calendar and itinerary builder to help with roadshow preparation. When utilized in collaboration with the platform’s ownership and targeting tool, IROs have all the tools and resources they need to raise capital and maximize the ROI on outreach efforts.

Here’s how Q4 Desktop’s fully-integrated platform prepares IR teams for future roadshows.

Understanding your shareholder base.

When preparing for a roadshow, understanding investor behaviour, history, and sentiment is crucial. Q4 Desktop’s ownership data provides a clear overview of investor trends in style, turnover, and quality over time, combined with historical interactions and contacts. Ownership activity charts make it easy to measure effectiveness of your corporate communications, highlighting the impact your news, events, and meetings have on your shareholder base. Peer analysis is simplified with modifiable peer matrices, while historical ownership provides the bigger picture with up to five years of data. By assembling your briefing books and tear sheets, Q4 arms you with everything you need to clearly understand your relationships with your investors.

Identifying the highest quality targets.

With Q4 Desktop’s screener tool, corporates can leverage a database of over 250,000 entities and utilize filters such as location, style, AUM, etc to identify compatible targets. Q4 Desktop also allows IROs to filter by Quality Rating (QR), a proprietary score that identifies whether a target is expected to be a long, mid or short-term holder; and Purchasing Power which goes a step further to quantify just how much investment the target could potentially make in the stock. Targeting by metro area is also possible, allowing you to broaden your search beyond a specific city.

Planning and executing a seamless roadshow.

Once your list of targets and investors is defined, the roadshow planning begins. With Q4 Desktop, IROs can easily group their contacts into distribution lists and initiate contact. Once meeting times and dates are established, the new itinerary builder helps capture every meeting detail in a simplified workflow, ensuring the user never loses track of where they are in the process of producing their event. Briefing books and printed itineraries are integrated with historical and customizable meeting notes, emailed directly to your account when ready for download, ensuring you have every detail to make the most of your meetings.

The new calendar makes it easy to see what your team is doing, who they’re meeting with, where they’re going, and when. Once on the road, take notes against each meeting and add tags to highlight particular topics of interest to the attendees. Every interaction can be grouped under your roadshow, updating your team’s itinerary while logging potentially significant events with your prospects and meeting guests.

Book a demo today to learn more about Q4 Desktop and how to integrate it into your IR workflow.

Conor White is currently hustling in the Marketing team at Q4, and a passionate contributor to the Q4 Blog.   

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Please return to your seats. The market has turned on the seatbelt sign: what happened last week, and what do we look for next?

Two weeks ago, my friend’s daughter, Leah, asked me to help her select stocks for her high school economics class. To be honest,  I was nervous to recommend anything as the markets had gone straight up for an extended period of time. I really felt we were well overdue for a pullback. As the markets sold off sharply last week, I was less concerned about my portfolio and more fearful that because of the state of the markets (and more so the stocks I picked), Leah would fail economics, and my buddy since kindergarten would never speak to me again.

Looking for a bad guy

I have been in capital markets intelligence for over 20 years. What I’ve learned in that time is that while people are far less interested in what’s going on with their stock when it’s moving higher, senior management really leans in when stocks don’t perform as expected. That’s when I’m asked: Mike, who is the bad guy?

The recent decline in the market started on February 2nd, as the January employment report sent interest rates higher. The Department of Labor reported that January’s hourly wage rose 2.9 percent. This marked the biggest year-over-year increase since the last recession ended in June 2009. The report sparked inflation fears and sent interest rates sharply higher, making some believe that the risk/reward between stocks and bonds had changed.

The selloff continued on February 5th, as the Dow gapped lower by over 800 points and then slipped to the largest intraday loss in history -1,600 in approximately 10 minutes. How does this happen? Who is the bad guy? Did the markets break?

While higher interest rates were the original bad guy, traders quickly turned to inverse volatility ETNs and ETFs to explain the velocity of the sell off.

Following market close on February 5th, the two largest anti VIX funds — the VelocityShares Daily Inverse VIX Futures Short Term exchange-traded note and the ProShares Short VIX Short-Term Futures exchange-traded fund — came into focus. Shorting volatility has been free money for investors in a market that has shown very little volatility. The market had seen a record 404 days without a 5 percent move lower. The VelocityShares ETN and the ProShares ETF each gained more than 180 percent last year. This performance obviously attracted fund inflows and the products swelled into the billions. This incredibly successful trade turned horribly wrong in a matter of hours as the 4 percent selloff in the S&P 500 sent the VIX higher by over 115 percent. The biggest anti-volatility funds lost over 90 percent of their value (roughly $3 billion) and forced Credit Suisse (the sponsor of the XIV ETN) to shutter the fund.

Barclays estimates that an additional $500 billion of assets are tied to funds that target a given level of volatility and as volatility rises, these funds decrease their leverage to equities. This type of strategy creates more of a mechanical type of selling vs. fundamental and certainly added to the velocity of the declines we saw last week.

The Herd Mentality

Passive funds have swelled over the last three years pushing Vanguard, BlackRock and State Street Global to the top of most public companies shareholder list. When investors pulled a record $23.9 billion from funds last week, many of these firms were forced to sell stock.

State Street Global S&P 500 Index (top 10 holdings)

Our proprietary relative performance score helped keep IROs ahead of the curve with  its real-time look into trading showing senior management exactly how much of the company’s move was tied to broad-based market selling.

Before the market turned positive on February 9th, I noticed that many of our clients had institutional buyers picking up shares into weakness. My team informed clients that if we saw an end to the program selling we expected shares to rebound off the lows. Fortunately this thesis proved true as stocks rallied off the lows later in the day.

With the bad guys identified–rising interest rates, inflation, volatility funds and index selling– how do things settle out from here?

Three percent mark on the 10-year note

Traders remain focused on the bond market and the 10-year note. The yields on the U.S. 10-year Treasury note closed at 2.83 percent, significantly higher than the 2.41 percent at year-end 2017. Traders look at the 3 percent mark as the line in the sand and a spike above that level could trigger another downdraft in the markets. All eyes will be on the January Consumer Price Index when it is released February 14 for our next piece of inflation data. Traders are expecting the core rate (less food & energy) to rise  0.2 percent with the year-over-year expected to fall 0.1to 1.7 percent.

S&P 500 200-day moving average

Buyers stepped in February 9th after the market fell briefly below the 200-day moving average. This mark will be a key line of support if the bull market is able to resume.

While the possibility of a bear market remains low and much of the decline last week was tied to mechanical and index selling, we are likely to see much more volatile trading in the near term. So buckle up and keep your trays in the upright and locked position, because things are likely to remain bumpy in the near-term.

Mike Coffey is head of Business Development, Intelligence at Q4 and has over 20 years experience in the capital markets. Mike is a regular contributor to Q4 blog.

The post U.S. market insight: What happened last week and where do we go from here? appeared first on Q4 Blog.

       

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When it comes to investor relations, a website is one of the most crucial platforms to educate and engage the street about your company’s offerings and differentiate yourself from your peers. From your value proposition to performance metrics, investors need quick and easy access to digestible content, orchestrated by a fully seamless experience across devices. In an overcrowded and competitive marketplace, it’s more critical than ever to leverage web design to bring your brand to life. But capturing a user’s attention span (on average a mere five seconds) means that your IR websites need to not only communicate efficiently and intuitively but also creatively.

In the past, websites were text heavy, feverishly trying to cram everything above the fold with few visuals and sparse white space. Today, we’re creating sites that not only follow web design best practices, but also convey brand personality and differentiation. By thinking outside of the box, designers are giving content that space to breathe and fuelling user interactivity. The aim is to deliver an uncluttered, focused, and authentic experience that’s also unique and engaging.

While IR sites can be somewhat limited when it comes to the flash and flare of their corporate counterparts, bold minimalism and clean design are the key focuses for 2018. Here are four design trends to keep in mind for your upcoming site build or much-anticipated redesign.  

Vibrant colours, big typography, and eye-catching photography

This year, bigger and brighter is better. Bright, vivid and crisp colours are replacing traditional muted palettes. Portraying a strong and confident brand personality and catching (and keeping) visitor attention, these colour schemes are being paired with large and often oversized typefaces and headers. The impact is dramatic but still minimalist and clean.

Designers are also featuring big and bold photography with a focus on being real and engaging. Boring and generic corporate stock photos are being ditched for striking real-life images that truly reflect a company’s personality and tone.

Icons, infographics and animated graphics

Corporates are turning to design for high impact visual storytelling. Custom icons and infographics can effectively convey and simplify complex information at a glance. Flat design is an especially popular and minimalistic approach, featuring two-dimensional illustrations with vivid colours, crisp lines, and clean open space. Designers are also leveraging microinteractions to make content and metrics more dynamic by engaging the user through animated icons and graphics.

Embedded Video

Videos continue to add a human touch and breathe life into static content. A Hubspot study claims that 59 percent of executives prefer to watch videos instead of reading text, and 92 percent of these mobile users share video content with their network. Using smart design to cleverly and organically integrate video content throughout your website is essential. An innovative and interactive example is a scrolling “slider” which consolidates multiple videos from a variety of voices across the organization.

Mobile Optimized

Last year, mobile usage officially surpassed desktop browsing. According to an IR Magazine survey of 300 institutional investors, 83 percent of investors rely on mobile to do their work and 68 percent look at investor-related content throughout the day. Staying economical about space and user attention span, designers are finding more intuitive ways to organize information for mobile (including the long scroll), using graphics that are instantly consumable (like icons and infographics) and maximizing on microinteraction opportunities.

Overall, regardless of access point, design today is all about conveying a strong brand image and engaging the end user. The focus is on creating simple but powerful experiences, through accessible, digestible, and stand-out content. If these design trends are any indication, the future is clearly bright and bold.  

Marla Hurov is the Content Marketing Manager at Q4 Inc and blogs regularly about trends in brand strategy and digital communications.

The post Big and Bold Design Trends for IR Websites appeared first on Q4 Blog.

       

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The capital markets industry is ripe for disruption. With the evolution of technology, machines are helping us do our jobs faster and more accurately than ever before. And when it comes to accessing real-time insights, IR executives no longer need to remain in the dark.

There are critical information voids in the IRO’s workflow, from insights about stock buyers and sellers, to market participant types driving valuation, and institutional targets that shift with investor sentiment. As someone who has spent the last 20 years advising IROs on shareholder and market intelligence, I know the power of real-time insights. Today’s latest surveillance tools are now driven by artificial intelligence, offering unprecedented clarity and actionable intelligence in an otherwise nebulous industry.

Working with outdated information

In the current market, investors have a much shorter time horizon than ever before. A study by SG Global Strategy Research reveals that the average holding period for a stock on the NYSE dropped from over 10 years in the 1940s to less than four months today.

According to Ana Avramovic, Trading Strategy Director at Credit Suisse, the annual turnover rate in U.S. stocks stood at 307 percent in 2015, up from 303 percent in 2014. Though down from the peak turnover rate (of 481 percent) in 2009, this still amounts to an average holding period today of just 17 weeks.

Given these stats, 13F data might be able to tell you who owned your stock four times per year, but is this actually adequate?

Rising above market noise

Capital flows are dynamic and fast-paced. HFT, Passive funds, ETFs, and Quants, have all exploded in terms of popularity and assets under management. According to Credit Suisse, while overall volumes and HFT volumes both peaked in 2009, they still remain historically high. Meanwhile, active fund volumes have actually declined (both absolutely and relatively).

Prior to the emergence of artificial intelligence, deciphering “real” volume from ETF flows or HFTs was extremely difficult, if not impossible. Even traditional surveillance, driven purely by experienced analyst know-how and industry contacts, has struggled — at times — to provide true insight and accurate intelligence and rise above the noise. There is just too much data, and simply not enough manpower in the traditional surveillance model to effectively comb through it all.

Looking to Artificial Intelligence for solutions

With the increasingly high turnover rates of investors, combined with the market’s deafening trading noise, finding relevant and actionable intelligence has become more difficult than ever.

In terms of investor targeting, relying solely on biased feedback from a variety of market participants and stale 13F data doesn’t cut it anymore. It’s no longer enough to have a list of top institutional managers and a cheat sheet of investor segments that own your peers. The speed of information flow and the short attention span of today’s buyside has made the timing of IRO marketing efforts absolutely essential. Like in the sales world, IROs need to constantly track and monitor their prospect base. When you’re “selling” your company’s story to the investment community, it’s critical to stay up-to-date on the latest trends, changes in sentiment, and competitive threats. Your success depends on the ability to get your message out to the right investors and put your senior management in front of the right names at the right time.

Investor targeting is where the marketing process first begins, but it certainly doesn’t end there. IROs also must be able to interpret how the Street is positioning for the near-term future, and understand whether your company’s share price is being driven by true institutional activity or ETF flows. Trustworthy real-time shareholder intelligence is crucial. Leveraging artificial intelligence shines a light on some of the market’s darkest areas and breaks through all of the noise. Essentially a Superhero version of the long-forgotten “Floor Specialist,” today’s tech-powered stock surveillance offers real-time analysis of market structure and capital flows (and their drivers). With these AI tools, IROs are equipped to understand and communicate shifts in short-term sentiment and investor expectations.

This new brand of real-time intelligence allows IROs to gain proactive insights into short-term price volatility and its causes, uncover short selling trends, quantify ETF flow impacts, identify Activists moving company shares, and recognize institutional shareholder activity. It’s actionable intelligence that you can feel confident in pushing upstream to senior management and the board; and also enables you to precisely forecast which institutions are most likely to buy or sell your shares.

AI surveillance not only dramatically improves your targeting efforts and ability to understand real-time trading drivers, but also provides the highest assurance that you always put your best foot forward.

Q4’s next generation AI surveillance tool, iris® is programmed to accurately report and even predict movements in shareholder and peer stock. From daily insights to weekly shareholder activity reports, she’s designed to arm IROs with real-time intelligence. This kind of actionable intel can truly empower you to strike your target audiences at the most critical moments, and ultimately expand multiples.

Adam Frederick is the senior vice president of intelligence at Q4 Inc and blogs regularly about surveillance and its applications for IROs.

The post How real-time surveillance shines light on a dark market appeared first on Q4 Blog.

       

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With the EU’s General Data Protection Regulation (GDPR) coming into effect on May 25th, the clock is ticking loudly to integrate the new data privacy laws. The stakes are likely higher than you imagine. If your organization is deemed to be non-compliant, you could face fines as staggering as €20 million or four percent of your global turnover. These unprecedented penalties are part of the EU’s global plan to aggressively protect the privacy rights of EU residents. The focus is on personal data that can be directly or indirectly used to identify an individual. This applies to all organizations that collect or process the personal data of EU citizens. While North American companies might think that they’re off the hook, multinationals take heed. This includes non-European based organizations that provide service to the EU.

To complicate matters, there’s a fair share of confusion surrounding what GDPR’s last phase involves and who needs to comply, as well as information that can be interpreted in multiple ways. As an infrastructure and security specialist and certified EU GDPR practitioner, these are the steps that I professionally recommend to ensure that your organization is ready for compliance.

8 Steps for integrating GDPR

1. Start data mapping:Identify how your organization handles personal data. The core way to make sure that you’re compliant is to conduct a comprehensive review of how your data is used, stored, retained, and backed-up. Start mapping your current processes for collecting, holding and processing personally identifiable information (PII data). Ensure that you have adequate security in place to protect this data. Collect a list of all vendors and find out if they’re GDPR compliant. According to GDPR, both collector (your organization) and processor (any vendor who processes data on your behalf) are liable for data breaches.

2. Identify your high-risk data: Carefully assess highest risk personal and sensitive data. Data mapping all of your applications at the beginning of any project will help give you insight into what needs a Data Protection Impact Assessment (DPIA).

3. Check your security certifications: Data privacy and security are two sides of the same coin. Ensure that you have adequate security controls in place, to protect the personal information of your clients and customers. Security certifications like ISO 27001, SOC1, SOC2 and Cyber Essentials  can help with GDPR compliance. Encrypting both stored and active data is key to ensuring customer anonymity and keeping personal data safe, especially during a breach.

4.Prepare for Subject Access Requests (SAR): According to GDPR, your data subjects have the right to be informed about and object to their data being used in automated systems. If they request for their information to be deleted or exported, you must respond within one month (or else face large fines). Train your support staff to be ready for these kinds of requests and create phone and email script templates to address customer concerns. Also, consider automating these SAR requests using methods like API.

5. Report a major incident within three days: Build an incident response policy to ensure that an EU Supervisor Authority is notified within 72 hours. Penalties for not reporting serious breaches can be up to 20 million Euro or four percent of your global turnover. Establish an incident response team including  IT, security, management and communication. This team should be prepared to quickly identify and remediate the breach, as well as assess whether it’s severe enough to be reported.

6. Establish an employee GDPR security awareness program: Build a GDPR security awareness program and train your employees company-wide about GDPR. Your team as a whole needs to use best practices for handling personal data.

7. Update your privacy policy: Make sure that your privacy policy is up-to-date on your website and ensure that it’s simple for an end user to understand. It’s key to define why you’re collecting personal data, how you’re storing and securing it, as well as whether it will be shared with third parties.

8. Get clear consent: According to GDPR, consent has to be clear, informed, specific and given freely. Make sure that you have opt-in consent for sending emails and any other kinds of marketing messages. Opting-out should also be as easy as opting-in. Log all of these activities in your backend database (for compliance auditing) and always include a privacy notice about your purposes for using personal data. Then be diligent about exclusively utilizing data for these specific reasons.

There’s only a few months left to align your organization’s processes with GDPR. Keep in mind that the sole purpose of the new laws is to protect the personal information of your end users. It’s crucial to get your security policies up to speed with the ISO27001 standard and protect your PII information, from handling email opt-ins and outs, to “subject access” requests, consent notices, and privacy policies. Make sure that your organization also has strong response systems to address, report, and log any major breach within 72 hours. In the worse case that you’re actually hit with an intrusion, do your due diligence now and be prepared to show that you did everything in your power to safeguard your clients and customers. You’re not only protecting your consumers, but yourself.

Vee Punia is Director, IT & Infrastructure at Q4 with over 17 years of experience in IT Infrastructure Management, Compliance, Security operations, ITIL Change Management and Service Delivery of Enterprise and SaaS platform.

The post How to integrate GDPR and protect yourself from a €20 million fine appeared first on Q4 Blog.

       

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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.”  

You can watch the webinar here for more on AI and how IRO’s are leveraging its potential to improve their day-to-day. Learn more about Q4’s AI engine, iris, here.

Marla Hurov is the Content Marketing Manager at Q4 Inc and blogs regularly about trends in IR and digital communications.

The post Will the future of IR be powered by artificial intelligence? Webinar recap appeared first on Q4 Blog.

       

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