The following is a guest article by Michael Tegos, Content Editor at research platform Smartkarma. Beginning today, Smartkarma is hosting a digital conference, Insight2020, which will contribute proceeds to UNICEF for COVID-19 relief efforts in the East Asia and Pacific regions.
Out of everything the global economy blames Covid-19 for, the pausing of in-person meetings and conferences is one of the most easily noticeable consequences. As the pandemic rages on, cancellations have hit everything from global conferences to individual company events, right down to mandatory annual general meetings.
Much like most aspects of personal and business life during Covid-19, a lot of those events have moved online – turned into one-hour webinars, all-day group calls, or even multi-day digital versions of the sessions, panels, and presentations one would find at a regular conference.
This digitisation of physical events is a confluence of trends that Covid-19 accelerated, but definitely didn’t create.
Moving Past the Middlemen
The proliferation of online conferencing tools is one factor enabling a broader push towards disintermediation in the finance industry. Investors, shareholders, issuers, and other market participants are increasing their efforts to decouple themselves from large players – investment banks and brokers – who have traditionally been gatekeepers between those different parties.
The onset of MiFID II two years ago essentially codified disintermediation, requiring investors to account for all costs pertaining to research and corporate access. Its effectiveness has been debatable (and still very much under examination), but as early as May 2018, a majority of UK-based financial institutions were reporting that they would rely less on intermediaries for corporate access.
With several firms looking to cut back on excessive costs as well as stay compliant, it’s not surprising that broker-organised lavish conferences and picturesque retreats would be some of the first to go.
While there isn’t an equivalent legislation in the US, asset managers there have sought to take corporate access into their own hands.
Some of the top money managers in the US, including Fidelity, T Rowe Price, and more, recently decided to hold an investor conference with corporate management without no brokers involved, according to a story the WSJ broke in March. While it would be premature to say that Wall Street brokers are no longer part of the equation, firms like T Rowe Price don’t mind stating that they “supplement” broker-arranged conferences with their own events.
So even before Covid-19 put a stop to all such conferences, the shifts were starting to get more and more noticeable. But the pandemic has given a gravity assist to trajectories already in motion. When Citigroup held their annual general meeting in April, they did so virtually – a course several other companies have followed or are considering.
Much like what happened with research, the changes disintermediation brings about disproportionately affect smaller market participants. Large players can afford to pivot, hold their own conferences, sidestep any intermediary they want. Smaller firms can’t do that without risking a hit on their relationships or their bottom line. For them, challenger upstarts are coming up with their own propositions.
In our experience, online events can have a lot of value for market participants. They are less resource-heavy since there are no physical concerns such as a venue. They can accommodate speakers and attendees from several different countries with zero costs in terms of travel and time for them – thus democratising attendance and speaking opportunities. And by trimming away the fat and focusing on the content, they can be more efficient and valuable to participants.
Because of these advantages, we expect a major portion of conferences and corporate access will continue to go digital even after the pandemic wanes.