The perilous state of customer trust in digital services

Published on the 17/07/2019 | Written by Jonathan Cotton

Customer trust in digital services

Customers aren’t trusting business to protect their data – and they’re prepared to punish companies for failing to do so…

New research from IDC and Microsoft shows just what a fragile thing consumer trust can be for digital services providers.

The report, entitled Understanding Consumer Trust in Digital Services in Asia Pacific polled more than 6,000 consumers across the APAC region to gauge their attitudes towards privacy, security, reliability, ethics, and compliance when using digital services.

The study shows a low consumer tolerance for risk when it comes to doing digital business. According to the study nearly 40 percent of consumers felt they have had their trust ‘compromised’ when using digital services and only 31 percent of consumers said they trust organisations offering digital services to actually protect their personal data.

“Many consumers are asking if they can trust the technology companies designing, developing and deploying digital services,” says Russell Craig, CTO of Microsoft New Zealand.

Consumers will take action if they have a negative trust experience with 53 percent of respondents saying they would switch to another organisation.

“Do these companies understand their responsibilities?

“Many organisations do not make the cut.”

The study found that consumers will take action if they have a negative trust experience – more than half of the respondents (53 percent) said they would either switch to another organisation, reduce the usage of the offending digital service (36 percent) or stop using the digital service altogether (34 percent).

The study also found that just five percent of consumers will transact with an organisation that offers a cheaper product but on a less trusted digital platform. And when it comes to recommending services to others, almost two thirds of those surveyed (61 percent) said they would recommend a higher-priced digital service over one a less-trusted one.

“This has significant implications for organisations looking to use cost as the primary differentiator for their digital services,” says Craig.

“For organisations that are planning to monetise their digital products further or introduce premium services, it is evident that fostering trust needs to be an integral part of their strategy.”

The savvy use of AI could offer one solution, but that brings with it it’s own problems. According to the survey, respondents are more likely to prefer the state to take the lead in establishing responsible frameworks for AI initiatives with 46 percent of those surveyed saying that ensuring AI is applied ethically should be managed by the government, as opposed to technology companies (32 percent).

That, says Antony Cook, associate general counsel, corporate external and legal Affairs, Microsoft Asia, is all the more reason to foster greater collaborative efforts between government and the tech industry.

“These dialogues would need to be backed by actions, including forging closer partnerships and facilitating greater knowledge exchange… These are all necessary steps that will enable us to collectively establish a well-balanced, holistic baseline for trust for the entire industry,” he says.

“Brands were first invented so consumers could know who they were buying from and make judgements based on quality. The only difference is that we are in a period of rapid change and exposed to new situations all the time.

“Trust comes down to preserving some basic principles: Privacy is a basic human right. People want to know that organisations respect them and are transparent about their actions. it’s important that the benefits of technology are available to all, and not an elite few.”

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