21 Feb 2023
Digital trust refers to the confidence and reliance that individuals and organizations have in the security, privacy, reliability, and authenticity of digital technologies and services. It is the level of confidence that people have in the integrity of digital transactions, data, and communication.
Digital trust is essential in a world where technology is deeply integrated into almost every aspect of our personal and professional lives. With the increasing dependence on digital technologies, it becomes crucial to ensure that the digital services we use are secure and trustworthy. This includes protecting personal data, ensuring the confidentiality of communication, preventing unauthorized access to networks and systems, and providing reliable and consistent services.
For businesses, one of the effects of COVID-19 was a dramatic rise in the use of digital technologies. It is well known that the pandemic has accelerated digital transformation across the board. With rapid digitalization, the internet evolved beyond a communications medium. Therefore, creating an ecosystem where consumers can operate safely and securely is imperative. That’s where the digital trust factor comes in.
While digital trust might sound like a relatively new term, it is more than just a buzzword. Simply put, it is a holistic way of analyzing several factors that create trust in the latest technologies, such as Artificial Intelligence (AI), Machine Learning (ML), etc. It will enable businesses to have the needed framework and reassure the consumers, giving them the confidence that their online transactions and other activities are secure.
Digital Trust, a Crucial Factor in Strategic Digital Transformation
India is poised to have 1 billion smartphone users by 2026 and will be the second-largest smartphone manufacturer in the next five years. At a time when everything – from booking a doctor’s appointment to ordering groceries – is happening at the click of a button, the customer experience matters more than ever. Besides giving them a seamless service, one thing that would help get recurrent customers is trust. As per ISACA’s State of Digital Trust 2022 survey report, 98% of respondents said digital trust is essential, but only 12% of the firms seem to have dedicated staff.
Creates a good reputation: It is vital to stay ahead in this fast-evolving digital world. However, a lack of security and transparency is causing distrust in digital technologies. Experts suggests that most consumers value digital trust and are more likely to change the brand if it doesn’t deliver.
Customer loyalty: Consumers nowadays only look for companies that protect their entrusted data. As per Harvard Business Review research, 88% of customers are less likely to leave if they trust a brand. Loyalty eventually translates into retention, and a 5% increase in customer retention can boost a company’s profits by as much as 95%.
Accelerated growth rate: Digital safety is where the best interests of consumers and businesses come together. Companies must put their customers’ safety first, not just because the consumers demand it, but because it is also suitable for businesses. A McKinsey report stated that companies that build digital trust could increase growth rates by at least 10%.
Minimal privacy breaches: According to Surfshark’s 2022 report, India ranks fifth on the list of the most hit countries by cyberattacks. As per IBM, it cost businesses INR 17.6 crore, up from INR 16.5 crore in 2020.
Achieving Digital Trust is Imperative yet Challenging
The challenges to establishing digital trust are fairly significant. Some factors that need to be addressed include a lack of funding and technological resources, leadership, and, most critically, a shortage of skilled workers. Digital trust is hampered by issues including fraud, financial crime, and data theft. Business may foster trust by switching to a more advanced digital infrastructure and lowering risks for consumers.
The industry requires systems that enable interactions between companies and customers on a foundation of trust. Quality, availability, security and privacy, ethics and integrity, openness and honesty, and resiliency are all factors that affect digital trust. Information technology, risk management, assurance, compliance, and resilience are the areas of an organisation where digital trust is most prevalent.
To sum up
Digital trust is built through a combination of factors, including transparency in data usage, secure infrastructure, strong privacy policies, and robust security practices. When people trust the technology they use, they are more likely to engage with it and use it to its fullest potential. Digital trust is therefore critical for enabling digital transformation, innovation, and growth.