The Significant Relevance of Large Language Models (LLMs) in African Capital Markets

Listed companies’ stakeholder and investor communications should not be left behind as technology evolves rapidly. Large language models (LLMs) have steadily carved a significant role in various industries, most notably in consumer products such as auto-suggest tools, Google Translate, Grammarly, etc. They are set to positively disrupt the declining African investor relations and investment research industry, providing AI-driven tools to enhance insights and investor-relevant data.

LLMs content origination for companies to tell their stories is a boon for African stock exchange-listed companies struggling with resource and budget issues. All that is needed to start:-

1. A content framework and policy – the SDGs or GRI Standards (or both) and a supportive Board
2. A team (investor relations officer) to describe what’s happening in companies daily operations.
3. AI tools to take the most basic of commentaries from staff to turn it into coherent storytelling text
4. Quality control procedures

The Hype Cycle of AI Tools – Does it Apply to African Markets?

Internationally, amidst the promising innovations, a hype cycle – an emotional rollercoaster of innovation, inflated expectations, disillusionment, enlightenment, and, eventually, productivity is distracting executives. Not so in Africa. Information is less paramount (due to illiquid markets and narrow shareholder bases) in our African markets.

Artificial intelligence (AI) has yet to bring about unprecedented changes, from optimising workflow to analysing vast datasets. Most companies are aware of AI but have yet to take substantive action. The hype has yet to impact the digital stakeholder engagement space. Its impact is imminent, and the first movers will be the winners.

Generative Artificial Intelligence: The Hallucination Issue

A key concern that has emerged is the issue of “hallucination” in generative artificial intelligence tools. Users of tools such as ChatGPT, BingChat, and others in financial research often report this problem, where these tools invent plausible-sounding answers that have no basis in reality. This is a significant concern, as false or misleading information can have profound implications, particularly in the investment research industry, which relies heavily on factual and accurate data.

To mitigate this risk, human oversight is still critical. The financial analyst’s role is not dead yet. It could be empowered: significantly.

The Imperative of Direct Communication for African Companies

AI tools currently struggle with validity. Human-curated AI content will alleviate misunderstandings and mitigates the risk of misinformation. Financial updates communicated to investors, and the broader stakeholder base responsibly and directly is the best way of ensuring that strategic messaging and ESG disclosures are delivered, meaningful and well understood.

Companies must use AI but not irresponsibly. Ensure human oversight, always. Be bold and a first mover, knowing there’s a long learning curve ahead.

AfricanFinancials: Your Partner in Effective Investor Communication

There is no substitute for direct, transparent, and effective communication in investor relations, originated, curated and published by humans (with some help from AI). This is where AfricanFinancials steps in. We are dedicated to assisting African-listed companies to communicate timely, relevant and accurate information directly (apps, email and SMS) to shareholders and stakeholders.

With our suite of investor relations solutions (designed for companies of all sizes), we are well-positioned to help companies optimise investor relations strategies, ensuring messages of sustainable wealth creation are communicated effectively, directly and authentically. By partnering with AfricanFinancials, companies focus on their core business. We are here to embrace this AI future together but in moderation.