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Trust is the new currency of the digital age
RECENTLY, there has been a flood of headlines about the misuse of consumer data by social media platforms, indicating that while people do care about privacy, they still have no clue what it means or how to handle it.
Hopefully, when the dust settles, those who had deleted their social media accounts will get back to connecting. After all, social media and digital tools have been helping us bridge the gap with loved ones when distance separates us physically. However, data misuse and privacy issues will spring up again. As the digital economy expands, data privacy and trust issues will only multiply.
On a daily basis many feel that companies are accessing personal information that they did not explicitly provide. Yet, despite such concerns, very few people have sworn off the Internet entirely. Neither is it easy to, considering how essential digital tools are to the ways that we live and work today. While we generally voice a desire for privacy, we are also very open with the information we share about ourselves - a conflict which seems to have become a permanent fixture in our everyday lives.
Let's face it: although we claim to want our privacy, we tend to focus more on the benefits we get out of our online activities than on the risks we take by engaging in them. Personal data also powers more relevant digital experiences, and consumers today understand this. In fact, data is among the intangible assets constituting as much as 84 per cent of the market value of companies listed on the S&P 500 index.
Research from Cognizant titled The Business Value of Trust has revealed a "give-to-get" ratio, where 66 per cent of respondents understand personal data as a valuable commodity and are willing to share it with companies - but only in exchange for some form of value. Companies must show consumers a return on the value of their trust. This positive "give-to-get" ratio is at the core of the economics of trust.
Over the next five years, the notion of "privacy" will undergo a radical change, and perhaps what is seen as unethical today will become acceptable tomorrow. As consumers become more educated about how companies are using their data, they may be willing to assume more risk in exchange for value in the form of personalised experiences, discounts or coupons. This kind of trade-off might be the new norm of privacy in the future.
NO PRIVACY WITHOUT TRUST
With everything from shopping to dating happening online, it is easy to wonder if data privacy really exists. Currently, our only hope for radically increased privacy in the short term lies on the other side of the world, with the European Union's General Data Protection Regulation (GDPR) that took effect on May 25, 2018. However, while the establishment of digital regulations is important, I am hesitant to agree that they should be the only mechanism utilised to protect our personal data.
Trust is key here. Without trust between consumers and service providers, there is no common ground for privacy in the digital world, especially when companies use personal data in ways consumers were not expecting. In the age where data and analytics are the key to honing a competitive edge, data ethics has to be at the heart of business success.
Unfortunately, many companies believe that they have done their duty by publishing data privacy and security policies. But as I have done countless times, and I'm sure most people too, we simply skim over the Terms and Conditions before clicking on "Accept". Communication is a two-way street. If a company is transparent about how it intends to use consumer data, I think end-users would be more willing to share it. When companies share responsibility for and show an interest in minimising risk, consumers become more likely to trust.
As the digital revolution unfolds, trust will become even more important because consumers will increasingly expect that businesses put their interests above everything else. Transparency will evolve to become the new competitive differentiator, and keeping customers informed about data usage policies in a language they understand will become a rising business imperative.
Companies that earn the trust will be better suited to weather the inevitable data breaches that will come our way as cyberthreats become more pervasive and sophisticated.
- The writer is senior director at the Center for the Future of Work, Cognizant