Trust issues: Building digital trust in the age of skepticism
Digital trust is at an all-time low – and with good reason. Headlines about data breaches, privacy violations, and cyberattacks, along with AI job scares and social media manipulations, have got people questioning the impact of technology on our lives from everyday interactions to broader societal issues. Meanwhile, organizations are finding themselves under a brighter spotlight, with both customers and regulators scrutinizing their ethical practices, data protection measures, and how responsibly they handle tech.
As pretty much every company depends on digital technology in some way for its operations and customer interactions, digital trust is, or at least should be, a universal concern. Especially considering how fragile it is.
In the 2022 McKinsey Global Survey on Global Trust, nearly half of respondents said they’d switch brands if they weren’t sure how a company would use their data. In fact, when it came to purchasing decisions, they considered a company’s ethics, trustworthiness, and data protection practices almost as important as price and delivery speed. Yet, fewer than a quarter of executives reported that their organizations were actively addressing digital risks across the board, whether it’s dealing with AI models, managing data, or fostering diversity in their talent pool.
In this article, we’ll explore what digital trust is, including its key pillars, effective tools and methods for building and maintaining it as well as the benefits associated with doing so.
What is digital trust? Definition and key considerations
The World Economic Forum defines it as “individuals’ expectation that digital technologies and services – and the organizations providing them – will protect all stakeholders’ interests and uphold societal expectations and values.” This includes a wide array of responsibilities, as highlighted by McKinsey, such as safeguarding consumer data, implementing strong cybersecurity measures, offering trustworthy AI-driven products and services, and being transparent about AI data usage.
Put simply, the meaning of digital trust is far-reaching and involves recognizing the broader effects of technology on people, from employees and partners to customers and society as a whole. It’s important to stress here that this isn’t merely a tech problem but rather a human one. Technology is neither inherently trustworthy or untrustworthy, so digital trust goes beyond trusting the technology itself. Fundamentally, it’s about having faith in the individuals and organizations overseeing technology implementation and use.
Why is digital trust important? Explore 5 major benefits
Digital trust isn’t just some trendy buzzword; it’s an imperative for every organization, no matter its size or industry. Here are some reasons why digital trust truly matters:
1. Protects customer data
By establishing reliability, credibility and integrity in their tech use, businesses demonstrate their commitment to safeguarding their customers’ sensitive information. This not only helps in building stronger customer relationships but also ensures compliance with ever-changing data privacy regulations.
2. Enhances brand reputation
A data breach or cyber attack can quickly tarnish a business’s reputation and turn away potential customers. Conversely, having a strong track record of protecting customer data and maintaining online trust can build confidence in the brand and attract more consumers.
3. Builds customer loyalty
Customers are more likely to remain loyal to a business that they trust with their personal information. By providing a secure and transparent digital experience, businesses can foster long-term relationships with their customers, strengthening their confidence in the brand.
4. Establishes credibility
Digital trust is a key factor in establishing credibility and reputation for a business. It shows that the company takes their customers’ privacy seriously and follows ethical practices.
5. Drives business growth
When businesses earn their customers’ trust, they can usually collect more customer data to fuel growth and innovation. This can be used to improve products, tailor marketing, and boost the overall customer experience. Plus, when customers trust a business, they’re more likely to spread the word with positive reviews and recommendations.
The four pillars of digital trust, explained
The technologies fueling digital transformation can both build and erode trust, bring benefits or risks to society. If used responsibly, they have the potential to become powerful allies in boosting transparency, ethics, data privacy, and security – what Deloitte calls the four pillars of digital trust.
Transparency and accessibility
Having clear and easy-to-find information about a company’s digital practices is crucial for building trust in its intentions and dedication to providing quality digital products and services. Today’s consumers crave transparency, especially when it comes to how their data is handled, including in AI-driven decision-making processes. Research reveals a strong demand for business transparency, with 73% of customers willing to pay more for fully transparent products.
Ethics and responsibility
As technology evolves, organizations face ethical challenges that come with increased power. Putting customer needs and societal benefits first can boost credibility and trust levels significantly. This includes promoting fairness, inclusion, and stakeholder welfare while combatting disinformation and applying digital controls to prevent unethical or inappropriate tech use. Embracing strong business ethics is crucial in navigating these challenges.
Privacy and control
Customers have long been handing over their data to companies for convenience and personalization, but there’s a limit to their consent. Misuse can have serious repercussions – think boycotts, public inquiries, and hefty fines under strict regulations like the General Data Protection Regulation (GDPR). However, organizations that prioritize consumer privacy and respect customers’ choices on data collection and management earn more leeway in handling customer information and delivering personalized services.
Security and reliability
Consumers value the convenience of digital technologies but expect businesses to take responsibility for the security of their data, including proactively alerting them to suspicious activity in their accounts. With cyber risks on the rise, customers prefer companies that use the latest technology to ensure cyber security in business operations.
How to build digital trust? A non-exhaustive list of practical steps
1. Improve transparency
It’s important for companies to be upfront about how they handle data and ensure security to build trust in the business. Follow ethical principles when collecting, processing, and storing data, and only use data for disclosed purposes. This means informing customers exactly what data is collected, how it’s used, and who it’s shared with, in a clear, easy-to-understand way. Make sure to keep customers in the loop about any privacy policy updates and communicate openly in case of a data breach or cyber attack.
Recommended tools and methods: clear privacy policies and terms of service agreements, easily accessible privacy settings and preferences, regular communication with customers through newsletters and/or blog posts, responsiveness
2. Give customers control
To build trust in the business, give customers control over their data. This could include opting in or out of data collection, minimizing the amount of information collected to what is necessary, or giving customers the ability to delete their data if they choose. By empowering customers to make decisions about their personal information, you can effectively show commitment to respecting customer privacy.
Recommended tools and methods: easily accessible privacy settings and preferences, data deletion and opt-out options, clear consent forms for data collection, regular data audits, automatic data deletion policies.
3. Implement strong authentication and access control
An essential part of keeping data safe is making sure that only selected personnel have access to sensitive information. This can be achieved through robust authentication and access control methods. Educate your workforce about strong password practices, use multi-factor authentication for all accounts, and limit access to sensitive data only to those who really need it. Keep track of who’s got access and update permissions regularly to make sure former employees or unnecessary users don’t retain access. Also ensure that access controls are applied fairly and transparently across all user groups.
Recommended tools and methods: strong password requirements, multi-factor authentication systems, role-based access controls, regular password updates
4. Integrate encryption into your data protection strategy
Implementing strong encryption protocols for all stored and transmitted data is critical for protecting sensitive information against unauthorized access. Encryption acts as a powerful barrier, ensuring that even if data is intercepted, it remains unreadable and secure. Prioritize the use of advanced encryption standards and zero-knowledge end-to-end encryption mechanisms to provide maximum protection.
Recommended tools and methods: AES 256-bit encryption, SSL/TLS protocols, end-to-end encryption, VPN for secure remote access
5. Employ AI and automation for enhanced security
Implementing AI and automation technologies enhances your organization’s ability to secure personal information and maintain customer trust. These tools offer advanced detection capabilities, identifying potential threats and vulnerabilities much faster than traditional methods. Plus, they can streamline data classification and encryption, reducing human errors. AI can also assist in monitoring unusual patterns or behaviors that may indicate a security threat, enabling proactive rather than reactive measures.
Recommended tools and methods: AI-powered threat intelligence, automated data classification and encryption, anomaly detection and behavior analytics
6. Use new technologies responsibly
Deploying new technologies responsibly is paramount in earning customer confidence and driving positive change. To achieve this, companies must prioritize ethical considerations while leveraging digital innovations to improve their operations. For example, when using AI or automation technologies, make sure they don’t perpetuate bias, discrimination, or harm to individuals or specific groups. It’s important to regularly monitor and evaluate AI systems to identify any potential ethical or privacy concerns. Employees should also be trained on the responsible use of these technologies, emphasizing the importance of human oversight and intervention when necessary.
Recommended tools and methods: ethical impact assessments, diversity and inclusion training, regular audits and reviews, stakeholder consultations
7. Educate your workforce and cultivate ethical practices
Create a culture of ethical reflection and continuous improvement within your organization. Regularly assess your data practices, policies, and technologies to ensure they align with ethical standards and evolving societal expectations. Provide ongoing training and education to your employees on data protection regulations, best practices for handling personal information, and the importance of ethical decision-making. This will help foster a responsible and privacy-aware workforce.
Recommended tools and methods: training courses, simulated phishing campaigns, employee handbooks, ethics committees or boards, employee surveys
8. Ensure compliance with relevant laws and regulations
Make sure you’re familiar with the applicable data protection laws and regulations both in your jurisdiction and field, such as the General Data Protection Regulation (GDPR) in the EU and the California Consumer Privacy Act (CCPA) in the U.S., or the Health Insurance Portability and Accountability Act (HIPAA) in healthcare. It’s crucial for businesses to stay informed about the requirements and take necessary steps to align their practices accordingly to avoid legal consequences and customer backlash.
Recommended tools and methods: legal counsel, online resources from regulatory bodies, compliance management software, regular audits
How can digital trust promote business growth?
The 2022 McKinsey Global Survey on Global Trust reveals that being trust-driven can bring significant advantages beyond merely satisfying consumer needs. The survey defines digital-trust leaders as companies where employees follow strict data, AI, and ethics guidelines, and implement best practices for AI, data, and cybersecurity. These organizations outperform their peers in two key areas: loss prevention and earning potential.
Digital-trust leaders showed lower rates of negative AI incidents than others. They experienced a 40% incident rate compared to a rate of 53% at other organizations. They were also less prone to data breaches, with a rate of 49% versus 57% for others.
Besides, companies leading in trust were 1.6 times more likely than the global average to achieve revenue and EBIT increase rates of 10% or more, a direct result of building confidence in their digital operations. Simply enforcing ethical conduct leads to growth, which a stronger commitment to digital trust through policy integration can only boost further. Adhering to best practices in cybersecurity, data protection, and trustworthy AI enhances this potential even more.
Other advantages may include:
- Employee satisfaction: A higher level of digital trust can boost employees’ trust in the business, particularly their confidence in the company’s leadership and decision-making. This leads to a more motivated and loyal workforce, as well as a more positive work environment.
- Improved communication: Trustworthy tech decisions and ethical considerations can enhance communication within an organization. When employees feel at ease sharing their thoughts, ideas, and concerns without fear of repercussions or judgment, it fosters healthier and more effective communication, collaboration, and teamwork.
- Regulatory compliance and new partnerships: By proactively focusing on data integrity and security, companies not only avoid fines but also build a reputation for reliability and compliance within their industry. This can attract partnerships and collaborations with other reputable organizations, further strengthening the company’s position in the market.
- Innovation: The commitment to ethical conduct often spurs a culture of creativity and exploration within the company. This can result in pioneering solutions, novel approaches to challenges, and a reputation for being at the forefront of technological advancements.
- Enhanced decision-making: Leveraging data protection and cybersecurity practices not only improves decision-making processes but also instills a sense of confidence in stakeholders. This trust can lead to stronger partnerships and a more resilient business model overall.
