Introducing the Q&A Blog Series: Navigating a New Digital World

Digital transformation has been talked about in the financial services industry for years. The COVID-19 pandemic forced us all to find new ways of doing business and operating, and to be more flexible in how we work and think. In fact, most companies in this industry had to deploy to a virtual environment very quickly and did so successfully.

What's next?

According to Mediant President and COO Sherry Moreland, “We’re in a brave new world. The future is here and we need to embrace it and look ahead to 2021 and beyond. However, we need to work together to capitalize on opportunities through technology and innovation.”

Mediant is launching a series of blog posts that addresses this in greater detail. Sherry Moreland will kick off the series here followed by other Mediant executives in the coming weeks.

Regulatory Changes

Q: Where do you see the future of industry regulations heading?

Sherry: First, I think the pandemic has shown that we need a flexible regulatory framework to work in. Even regulators who are traditionally averse to change need to adapt to keep up with technology. They did this with the pandemic, but it was crisis driven. They took quick action across several areas to keep the industry moving, especially given the timing of COVID fell in line with proxy season.

But regulators need to move beyond crisis driven. They need to really look at how technology is advancing the financial industry and make sure the regulations are in step with these advances. This pandemic has shown that leveraging technology is such an important factor and that having the information and tools you need at your fingertips is essential to helping you comply.

You also need to have technology vendors that have a deep understanding of current rules and regulations and can provide you with expert knowledge to stay on top of the ever-changing regulations landscape.

Q: What regulatory changes are impacting investor communications? How are regulations keeping up with technology solutions?

Sherry: The industry is addressing several regulatory-related issues right now including:

  • Rule 30e-3. Companies need to send a notice of electronic availability for regulatory, annual and semi-annual reports, which eliminates a lot of printing and postage for funds but also drives investors towards digital documents. Now another level of rules have been proposed to make the documents more engaging and easier to read to the shareholder in a digital format.
  • Shareholder Rights Directive II (SRD II). This update to 2007’s European Union-directed SRD I mandate aims to strengthen the shareholder’s role in the financial marketplace, promote long-term shareholding and reduce excessive risk from companies that issue stocks. It also requires brokers and custodians to rely more on electronic data while respecting the EU’s demand for shareholder privacy.

Shareholder Engagement

Path to Digital Leadership

Q: Shareholder engagement is more important than ever, and investors are now accustomed to digital interactions. How can digital tools help drive engagement?

Sherry: We should all be asking ourselves several questions: How do we improve the client experience? How do we help our clients, our investors, advisors and shareholders? Are we meeting them where they are in terms of communication?

At Mediant, we've developed the ability to text proxy materials and send out text messages about proxy materials. We can also push this out through the broker-dealer’s app. We've even perfected voting over Alexa. We are using all the channels available to us to communicate with shareholders through the medium they're most comfortable with.


Q: What impact has COVID had on shareholder engagement?

Sherry: COVID had a huge impact on this proxy season. The pandemic was striking about the time issuers were getting ready for their annual meetings. Suddenly they were thrust into needing to do it and wondering could they do it.

The SEC gave very good and broad relief guidance. It gave issuers a tremendous amount of flexibility in how they could carry on with their meeting. They could postpone it, even if they had mailed their proxy material, or convert it to a virtual meeting.

One of the biggest ways to engage shareholders is through virtual annual meetings. Last year at this time only a few hundred issuers had used a virtual meeting platform, even though the service has been around for about 10 years. But overnight with the pandemic, suddenly many issuers were scrambling to have a meeting and do it 100 percent virtually.

Now the industry is trying to identify best practices for virtual meetings because they are here to stay. Recently I was on a call with an industry group that's trying to define best practices. I commented that this is not a technology issue. The technology is here – we need to harness it to improve our workflow, create two-way communications and engage shareholders.

Keep an eye out for more insights from Sherry about annual general meetings going public, as well as thoughts from other Mediant executives on navigating a new digital world.

In the meantime, please contact us with any questions or comments about this post.