Public companies are increasingly utilizing generative AI to prepare for earnings calls, aiding in communication strategies and anticipating analyst questions. Companies like Skechers and Ciena have incorporated AI to refine their earnings messaging and ensure consistency with investor expectations. This trend showcases a shift in the finance sector as investor relations teams begin to leverage technology to enhance efficiency and accuracy, although ethical concerns remain regarding information privacy.
As public companies increasingly highlight the benefits of generative artificial intelligence (AI) during earnings calls, they frequently overlook the crucial role of this technology in preparing for such communications. Organizations like Skechers USA and Ciena have begun incorporating generative AI into their investor relations processes to enhance their earnings commentary preparation. This includes anticipating potential analyst inquiries and crafting effective responses more efficiently.
Despite the finance sector generally being cautious in adopting AI compared to other departments, investor relations teams are showing a notable shift. They now utilize AI to streamline earnings disclosures, allowing executives to navigate the complex landscape of earnings presentations and analytics with greater assurance. Shannon Cole from Gartner notes that the intricacies of investor relations make it a prime candidate for AI integration.
A recent survey indicated that approximately 44% of investor relations professionals have begun employing AI for various tasks, particularly in content creation. For instance, Skechers employs AI to assess the coherence of their earnings messaging with their strategic objectives, ensuring alignment with investor expectations. Chief Financial Officer John Vandemore articulated the necessity of this approach, remarking, “The reality is a lot of investors are going to gravitate to using tools like that,” emphasizing the need for consistent messaging.
Ciena has similarly adopted AI technologies to assist in drafting scripts and anticipating questions during earnings calls. Gregg Lampf, the firm’s vice president of investor relations, explained how AI enables them to run checks for clarity and relevance, ensuring that communications resonate with diverse audiences. Additionally, executives are refining their language choices based on AI analytics, identifying optimal terms that align with prevailing industry standards.
Furthermore, AI technology provides insights into the emotional tone of executive statements, helping to gauge sentiment which may influence investor perceptions. Steve Soter from Workiva elaborated on this, noting how AI can indicate whether financial leaders are optimistic or concerned, potentially affecting interpretations of future company performance.
Nevertheless, the increased dependence on AI within the earnings reporting process raises ethical considerations, particularly regarding accuracy and confidentiality. Experts advise caution, highlighting the risks of exposing sensitive information, particularly when utilizing public AI models. Evan Pondel from Triunfo Partners cautioned against discounting these risks as companies transition into reliance on AI, emphasizing the need for prudent implementation strategies.
For Chief Financial Officers, incorporating AI into earnings preparation may serve as an entry point for broader technological acceptance. May Habib of Writer observed that engaging with AI in investor relations helps demystify its capabilities, paving the way for enhanced efficiency and revenue opportunities.
The integration of generative AI in investor relations has emerged as a revolutionary trend for public companies, enhancing their approach to earnings reporting and investor communications. As these organizations navigate complex market dynamics, the strategic application of AI tools aids in refining messaging, anticipating inquiries, and aligning corporate narratives with investor expectations. This paradigm shift is particularly notable as finance departments, traditionally cautious in adopting AI, now increasingly embrace it in investor relations.
The adoption of generative AI in investor relations is reshaping how public companies prepare for and execute earnings calls. By leveraging AI technologies, organizations can enhance their communication strategies, increase operational efficiency, and mitigate risks associated with investor interactions. While the benefits are significant, the challenges regarding privacy and ethical considerations must be addressed as firms continue to explore the full potential of AI in their investor relations practices.
Original Source: www.livemint.com
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