If trust is the currency of the digital economy, then consumers must represent the central bank. And just like in the world of finance, organisations are held to certain standards if they want to be issued with more of that currency.
The World Economic Forum projects the digitalisation of consumer industries to be worth over US$10 trillion by 2025. This represents themes ranging from consumer data flow to supply chain automation.
The explosion in digital touch points created from this will provide companies with myriad opportunities to innovate, differentiate and win customers. But the reality is those opportunities can also pose threats for companies who don’t prioritise consumer trust.
CA Technologies’ 2018 Global State of Online Digital Trust found that 36% of Australian consumers had stopped shopping at an organisation because of a data breach. Nearly 6 in 10 businesses reported a negative impact on business results following a data breach.
Meanwhile, Internet penetration is maturing around the world. This year’s Kleiner Perkins Internet Trends Report found new user growth had dropped to 7%, down from 12% in 2016.
These findings should put businesses at attention. With more opportunities to lose consumers, and less new consumers coming online, unlocking value through digital initiatives is becoming increasingly competitive.
Consumers are gradually becoming more aware that the data they hand over to companies is the price they pay for free services. With recent scandals involving data breaches and misuse making headlines around the world, consumers will look to tighten those (data) purse strings.
Companies looking to capitalise on opportunities presented by digitalisation – and mitigate potential threats – must do three things to build trust:
Transform the business to deliver trusted experiences
Reduce the risk of embarrassing data breaches and secure consumer identity
Empower consumers with more control over what private data is stored, what behaviour is tracked and how data is aggregated and shared
Deliver trusted experiences
CA Technologies’ digital trust report found that there is strong correlation between digital trust and online spending, with high digital trust leading to a 57% increase in online spend.
Many businesses understand that experience is starting to overtake product when it comes to winning consumer preference (and dollars), but only a select few seem to recognise that security is a key part of that experience. In the digital economy, IT security culture is perhaps more critical than responsive customer service.
Our study found 86% of consumers would choose a secure experience over a convenient one. This means that customers are likely to value controls like multi-factor authentication, and not see them as points of friction. Measures like better risk analytics – to determine a transaction is fraudulent – can serve as a customer touchpoint that inspires confidence.
Prevent data breaches
Our lives are rapidly digitising. Services are going online at a rate faster than most people can come up with original passwords.
This means that a data breach at one company could lead to financial damages for a consumer, even if that company didn’t store financial information.
Many security professionals would argue the consumer was to blame for not practising proper password hygiene, but the consumer would blame that company and take their business elsewhere.
Paradoxically, they key to persuading customers to share more data with your company is to store less of it. If the information isn’t necessary for audit compliance or to fulfil a business objective, it probably shouldn’t be kept.
Tracking online behaviour can be contentious when it’s done to sell that information for profit, but it’s a key component in detecting data breaches. Companies spend a lot of money on a plethora of security tools. According to the CA study, 88% of business executives agree that it is important to invest in technologies to protect consumer data. But few have adopted this relatively straightforward practice.
Put another way, this is the digital equivalent of installing a bank vault without putting a camera in to track who is entering and leaving. Companies that can detect and prevent are buying an investment in the currency of consumer trust.
Empower consumer consent
Software, as they say, is eating the world. Companies have a voracious appetite for game-changing technologies that will give them the insights they need to stay ahead of the competition. But customers will not share information with companies that can’t be trusted to secure data from hacking, or who don’t provide transparency on how their data is being collected and used.
The solution to this is twofold. First, invest in the right people, processes and tools to protect critical information.
Second, be clear on how customer data will be used. When collecting information, companies need to disclose data usage transparently. As an ongoing part of customer relationship management, companies should provide the online capability for customers to manage behaviour tracking and data sharing.
Recent data misuse scandals around the world have impacted stock prices and geopolitics alike. Consumers want to feel empowered about how their personal information is used. Companies that ignore this risk eroding the trust in their customer relationships and turn themselves into a transactional commodity rather than a desired experience.
Customers are quickly recognising the value of their data and will withhold it from companies that prove themselves untrustworthy. In the digital economy, business success depends on useful information to fuel innovation and sustain competitive advantage.