“Investor trust cannot be designed or manufactured. Trust must be earned—through diligence, through restraint, and through experience,” observed Kara Stein, Commissioner on the U.S. Securities and Exchange Commission (SEC), during one of her last public addresses of 2017.

Speaking to members of the Investment Company Institute (ICI) in Washington, D.C., Commissioner Stein said in her wide-ranging speech that it has been more than 30 years since the start of the personal computing revolution. As such, she says the SEC is taking time to review the investing industry’s progress adopting and leveraging emerging technologies for the benefit of retail and institutional customers.

“How has the SEC’s approach to disclosure changed in that time? Well, for one, instead of typing disclosure forms and printing them out for filing, [fund managers] now Word process disclosure forms and file them on EDGAR,” Stein noted. “In many ways, this is like the move from rotary dialing to touch tone—we went from analog to digital, but the phone we’re using is still basically just a plastic handle with a speaker and a microphone.”

Stein recalled for the audience the results of the SEC’s Office of the Investor Advocate recent evidence summit, “called to discuss how investors think, act, and save.” One takeaway from that summit, according to Stein, was that digital communication and data management technologies are now becoming key tools for enabling investors to make effective investment decisions. Stakeholders in government and businesses, along with consumers, see major potential in the years ahead for maximizing the use of such data technology.

“For example, we can envision a future where users query SEC data from their smartphones, or perhaps even through social media-like platforms,” Stein said. “We are wondering, can we give investors a quick way to comparison shop—for example, check the box on three companies and see a dynamically generated side-by-side comparison of their products? What if the disclosures were customized for that investor? Why not?”

However, as much as she believes in the potential for technology to improve investors’ access to, and use of, disclosures, not every use of technology improves the position of all investors, Stein warned. She cited how debate has continued over a rule that would change the way investors receive important information from their mutual funds. According to Stein, the proposed rule 30e-3 would, for the first time, allow funds to provide shareholder reports via the Internet even when investors do not actually choose e-delivery.

“This proposal is not about whether the Commission should allow e-delivery or not. I’m actually a big supporter of e-delivery and I think it can have huge benefits. However, as I’ve spoken about in the past, the approach in 30e-3, shifting the burden to investors, concerns me for several reasons,” Stein said. “First, for those investors who prefer e-delivery, the electronic format may help them manage information. But some investors prefer paper. Others may not have access to a computer or the Internet. It would, therefore, be unrealistic to expect that we can impose this additional burden on busy investors without negatively affecting their engagement.”

Stein stressed that her opinion is her own and does not represent the opinion of the SEC as a whole—or the opinion of other commissioners.

“I recognize the potential for cost savings and environmental benefits that proponents of 30e-3 have pointed to. Those are worthy goals, and I support pursuing them, but the Commission is charged with balancing these goals with investor protection,” Stein said. “I do see a potential path forward here. Investors could benefit enormously from a compact and timely disclosure document that they actually look at and understand.”

Stein said the SEC may take up the exploration of a summary document containing the most important details of shareholder reports to be delivered by mail or e-mail, depending upon the investor’s preference.

“The summary document would then offer the investor a way to easily access additional information,” Stein suggested. “This layered approach would put something substantive in the hands of investors who have not chosen e-delivery. At the same time, it can offer many of the benefits of the proposal by reducing printing and delivery costs. To the extent the cost of delivery continues to reflect fixed costs of intermediaries based on outdated regulatory schedules, let’s work on fixing that. Those costs should not drive the conversation about disclosure affecting millions of Americans.”