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Ask the Expert: Chiara Cuccu, Head of Digitalis’s Financial Services Practice

March 2024
 by Chiara Cuccu

Ask the Expert: Chiara Cuccu, Head of Digitalis’s Financial Services Practice

March 2024
 By Chiara Cuccu

Our Financial Services Practice provides technology and advisory services to a range of financial services clients including banks, insurers, public and private markets investment managers, as well as issuers and privately owned companies. We help clients to identify idiosyncratic risk and harness the opportunities presented by the unregulated, unstructured, and decentralised online information environment – often in preparation for planned high-value events or pursuant to unplanned events.

Our Head of Financial Services Practice, Chiara Cuccu, works with clients in the financial services industry to provide support with online reputation management, as well as being an online narrative management expert. Here she takes a few minutes to answer some questions on the work of the Practice, and how she helps clients manage the impact of digital trends and developments in an ever-changing external environment.

1.Tell us a little about the range of skills and expertise within Digitalis’s Financial Services Practice, and how the team works together to help clients.

My experience prior to Digitalis was mostly in communications, language analysis and social media – all key components of the work we do to protect and help our clients. I have been an active member of the Financial Services Practice since I arrived at Digitalis five years ago. From day one, a significant part of my workload included research into unfolding narratives in the shareholder activism sector, and as I progressed, I deepened my understanding and focused increasingly on clients operating in this space.

I am now Head of our Financial Services Practice, which brings together individuals from across the company, including search engine specialists, digital intelligence experts, and online reputation and narrative management advisors. Bringing expertise together in this way enables us to provide a 360° approach to the analysis of new narratives and unfolding trends, and provide a bespoke service in response to the unique needs of each client.

In the past few years I’ve also worked closely with Fred Duff Gordon to develop our online narrative management offering and finetune our approach for Financial Services clients.

2.What kind of clients do you work with, and what challenges do they approach you with?

Digitalis has a diverse client base, and my focus is on those involved in the financial services world. We work with institutional investors, private investors, private equity firms and activists, as well as advising companies on their messaging and outreach to shareholders. Each client will of course have different objectives and priorities, and our approach allows us to be flexible and tailor our strategy to align exactly to their needs.

Our early stages of research identify what kind of information the stakeholders are looking for, and where it is important for the client’s messaging and materials to be accessible and visible. We also provide bespoke offerings in preparation for certain events, such as a planned IPO or a shareholder meeting, gaining an in-depth understanding of the digital landscape, existing online sentiment, the content potential investors or shareholders are likely to find, and how to ensure critical messaging reaches all relevant audiences. Pre-event planning often entails working within very specific timeframes and adapting our strategy as new narratives unfold.

3.What key digital trends have affected your clients in recent years, and how have the challenges they face evolved over time?

In recent years, we have seen how online sentiment and discourse can have a real-life effect on the stock market. Throughout 2020 and early 2021, online investing communities on platforms like Reddit and trading apps thrived, with retail investors discussing potentially profitable stocks and culminating in the short squeezes of GameStop and AMC. As hedge funds and short sellers faced significant losses, it became clear that there was a need for existing regulation and online moderation to be revisited and updated to fully understand the impact that internet platforms can now have.

Companies began to grasp the importance of online sentiment, attempting to monitor and understand the ongoing discourse on these platforms, where users try to predict stock behaviour and discuss value. While institutional investors may have been the main audience of these companies’ messaging in the past, these events demonstrated that a wider public is now directly involved in the investment world, and companies may need to have this in mind when planning their communications and outreach plans.

We have also recently seen how the spread of false information online can spark real-life consequences. When X (formerly Twitter) changed its ‘blue check’ verification requirements in late 2022, some users took advantage of this and posed as the official accounts of multinational companies, political leaders, and celebrities. One fake post from an account impersonating a pharmaceutical giant about the price of their products led the real company’s stock value to drop by over 4%, demonstrating how online phenomena and memes can have a significant effect on the market.

4.You’ve talked about your expertise in online narrative management. How does the online narrative management process work at Digitalis, and how does it make a difference to clients?

Each online narrative management programme is different, and we pride ourselves on the way we adapt our strategy to the exact situations our clients are facing. With our core online reputation management offering, we usually focus on digital resilience and the curation of a client’s online profile as a whole. In some cases, however, we may be evaluating the search engine landscape in preparation for an event, and understanding the online commentary around an upcoming IPO – in this situation, potential investors will be carrying out their research, and it is of paramount importance that all the relevant materials are easily accessible to stakeholders when performing online searches for the relevant terms and in the key jurisdictions.

Our proprietary technology allows us to tailor the scope of each project accordingly, so that we can monitor how search results change over time in relation to real life events, and which voices are more prominent in these target searches. We also often inform our strategy with the findings of our Digital Intelligence team. With this knowledge, we can then provide bespoke advice and engage our tech to maximise the outreach of a client’s messaging.

5.Looking ahead, what are the most important issues for your clients in the near future, and how can they remain aware of the risks and protect themselves against emerging threats?

As well as ensuring our clients have control over their online profile, we also monitor developing trends and shifting narratives in the sector as a whole. The growing expectations with regards to ESG is one example of a significant shift in public perception in recent years, and as regulation is changing, financial services companies must ensure they are adapting accordingly.

Shareholders will have expectations of the companies they invest in when it comes to their ESG efforts and pledges, and if a company’s statements are not matched by actions and practical changes, they may be perceived as greenwashing, bringing a negative reputational impact. With the rise of ESG-specific funds and increased scrutiny from new sustainability regulations, coupled with activist shareholders beginning to mention ESG efforts as part of their requests for change, companies can no longer afford to ignore sustainability when considering new opportunities, reviewing the impact their investments are making on the world, and ensuring their initiatives are effectively communicated to the right audiences.

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