Organisations that invest in trust see the best return: McKinsey

When organisations invest in earning consumer trust they are most likely going to see the highest top and bottom-line growth rates, this is according to a new McKinsey report.

The report, Why digital trust truly matters reveals that roughly two-thirds of consumers believe companies that are transparent around their data privacy policies, deliver AI products at least as trustworthy as those relying on humans.

Data protection is a big deal to customers and the majority believe companies holding their data are responsible with that said data.

From those surveyed, 70 percent believe that the companies they do business with protect their data. Customers often use a trust level to determine where they do business, with 40 percent reporting having dropped a company that lacked data protection policies.

As defined by the authors, digital trust is an individual’s confidence in an organisation to protect their data, enact effective cybersecurity measures, offer trustworthy AI-powered products and services, and provide transparency around AI and data usage.

The study surveyed more than 1,300 business leaders and 3,000 consumers globally to compare business practices against consumer expectations.

The majority of organisations surveyed believe they are at least somewhat effective at mitigating digital risk but less than 25 percent of business leaders report that their organisations are actively mitigating a variety of digital risks.

While this might be the case, data breaches are still present with more than half of organisations reporting a data breach.

According to the report, 57 percent reported a data breach in the last three years while 55 percent had an AI application produce problematic outputs.

Respondents report that these incidents often led to financial losses. They also present missed opportunities to attract customers looking for a trustworthy company for their business.

Liz Grennan, associate partner, Stamford, CT said, “The companies that are doing more to build trust and are communicating this effectively to consumers will likely shift the landscape of consumer expectation even further.

“As an analogy, consider the increased awareness around the use of trans fat—built up largely through scientific research and company action—and how many food companies now print ‘no trans fat’ on their labels. Consumers are now attuned to looking for trans fats and avoiding them.”

A look at the practices of digital-trust leaders shows that their success starts with goal setting, the report noted.

The authors wrote, “First, they simply set more goals—leaders in digital trust set twice as many goals for trust building than all other organisations.

“They are also more likely to focus on value-driving goals—particularly, strengthening existing customer relationships and acquiring new customers by building trust and developing competitive advantage through faster recovery from industry-wide disruptions.”