A recent McKinsey report has shared key findings relating to why digital trust matters for organisations.
Why digital trust truly matters
- A recent McKinsey report has shared key findings relating to why digital trust matters for organisations. Digital Trust is an individual's confidence in an organization to protect their data, enact effective cybersecurity measures, offer trustworthy AI-powered products and services, and provide transparency around AI and data usage.
They surveyed 1300+ business leaders and 3,000+ consumers and it revealed:
- Consumers have a high degree of digital trust in the companies they use, but many companies are still ill-prepared to defend against digital risks.
- However, a group of digital trust leader companies has emerged that not only defend against digital risk better but are also more likely than others to see annual growth rates exceeding 10%.
- The research also delved into what the digital trust leader companies are doing differently, consumers' digital trust in businesses, businesses' self-assessment of how trustworthy their digital products are, and the cost of digital risk events.
For consumers, the research established:
- 70% of consumers believe that the companies they do business with protect their data.
- Whereas 57% of executives report that their organisations suffered at least one material data breach in the last 3 years.
- 85% of the respondents thought it was key to understand a company's data privacy policies before making a purchase.
- With 72% stating that knowing a company's AI policies is crucial before making a purchase.
- 46% often consider other brands if the one they plan to use is unclear on how their data will be used
- Amongst this, 58% were Asia-Pacific respondents
- 56% were purchasing on behalf of their organisation
- 50%+ were millennials and Gen Z
- Many consumers considered ethical and trusted reputation and the amount of personal data required, to be nearly and sometimes equal to other purchasing factors, such as cost and delivery time.
- A substantial proportion of respondents said they would take their business elsewhere if trust was violated: forty percent of all respondents report that they have pulled their business from a company after learning that the company was not protective of its customers' data.
- Overall, consumers stated they believe companies establish a moderate degree of digital trust and that consumers had similar (36%) or greater (32%) trust in products and services that utilise AI compared to utilising people.
Digital trust connects to growth
The report additionally focused on how digital trust connects to growth and it found:
- Leaders in digital trust were 1.6x more likely than the global average to see revenue and earnings before interest and taxes (EBIT) growth rates of at least 10%.
- Digital trust leaders that were able to set goals regarding digital trust were more likely to achieve a better degree of digital-risk management compared to those who did not set goals/targets. These digital trust leaders were sometimes twice as likely to mitigate a variety of digital risks.
- Where a strong emphasis on digital trust was maintained, digital trust leaders would lose less and grow more. Meaning that they were less likely to suffer a data breach or AI incident and more likely to have a higher growth rate.
For more research findings and to read the full report published by McKinsey, click here.