By Jon Stanford, ISACA Emerging Trends Working Group
Businesses must secure digital trust in order to be successful in an increasingly digital world. With emerging threats and powerful technologies like AI making for a volatile enterprise landscape, organizations must be able to reassure users with transparency about the security of their personal information and transactions. Transparent and ongoing communication with consumers can lead to business growth, a positive brand reputation and improved consumer loyalty.
ISACA’s State of Digital Trust 2023 report explores why some organizations recover and maintain loyalty after incidents that severely impact digital trust. It suggests that this is often related to the company’s actions and transparent communications before, during and after an incident. Key factors include whether the company had safety, security, privacy and related policies in place and followed them, whether the company voluntarily disclosed the incident and provided updates in a timely manner, and whether the company provided remediations/solutions/compensation for customer losses.
As a starting point, it’s important to understand what digital trust is. While there are many factors that contribute to digital trust, it largely hinges upon the confidence customers have in an organization’s ability to protect their data and respect their privacy. When a data breach or cyberattack occurs, that trust is eroded. The way an organization responds to such an incident can significantly influence whether it recovers successfully or not.
Digital trust is a cornerstone of customer loyalty, brand reputation and, ultimately, business success. However, as data breaches and cyberthreats are ever-present, maintaining this trust is becoming increasingly difficult. The report provides insights into why some organizations successfully recover from incidents that impact digital trust while others do not.
According to the report, a high degree of preparedness is crucial. Organizations that have robust safety, security and privacy policies in place are better equipped to handle incidents when they occur. They have clear protocols to follow, which helps to minimize the effects of a breach and ensure rapid response. Transparency is another crucial factor. When an incident occurs, customers want to be informed promptly and honestly. Organizations that voluntarily disclose an incident and are transparent about the steps they are taking are more likely to retain their customers’ trust.
Here are some key takeaways from the report:
Digital Trust-related Benefits
- Fewer Privacy Breaches (56% of respondents): Organizations with high digital trust often have robust privacy policies and practices in place, which can lead to fewer privacy breaches.
- Fewer Cybersecurity Incidents (56% of respondents): Similarly, these organizations typically invest in strong cybersecurity measures, leading to fewer cybersecurity incidents.
- More Reliable Data for Decision-Making (57% of respondents): When customers trust an organization, they are more likely to provide accurate and complete data, leading to more reliable data for decision-making.
- Positive Reputation (67% of respondents): High levels of digital trust can significantly enhance an organization’s reputation, making it more attractive to customers, partners and employees.
- Stronger Customer Loyalty (55% of respondents): Trust is a key factor in customer loyalty. When customers trust an organization, they are more likely to continue doing business with it, even when things go wrong.
- Faster Innovation Due to Confidence in Their Technology and Systems (42% of respondents): Trust in an organization’s technology and systems can foster an environment that encourages innovation.
- Higher Revenue (27% of respondents): All of the above factors can contribute to higher revenue. When customers trust an organization, they are more likely to purchase its products or services, leading to increased sales.
Consequences of a Lack of Digital Trust
- Reputation Decline (63% of respondents): A company’s reputation is one of its most valuable assets. When trust is lost, the damage to a company’s reputation can be severe and long-lasting. This can lead to a loss of current customers and difficulty attracting new ones.
- More Cybersecurity Incidents (59% of respondents): A lack of digital trust can lead to an increase in cybersecurity incidents. This could be due to inadequate security measures or a lack of investment in cybersecurity infrastructure.
- More Privacy Breaches (58% of respondents): Similarly, organizations with low digital trust may experience more privacy breaches. This could be due to insufficient privacy policies or failure to adhere to privacy regulations.
- Loss of Customers (56% of respondents): When trust is lost, customers may choose to take their business elsewhere. This can lead to a significant loss of revenue for the company.
- Less Reliable Data for Decision-Making (54% of respondents): Trust plays a crucial role in data collection and usage. If customers do not trust a company, they may be less likely to provide accurate data, leading to less reliable data for decision-making.
- Negative Impact on Revenue (42% of respondents): All of the above factors can ultimately lead to a negative impact on a company’s revenue. The loss of customers, coupled with the potential costs of dealing with cybersecurity incidents and privacy breaches, can significantly affect a company’s bottom line.
- Slower Ability to Innovate (36% of respondents): Trust is crucial for innovation. If customers, employees, and stakeholders do not trust a company, they may be less likely to support new initiatives or changes, slowing down the company’s ability to innovate.
The State of Digital Trust 2023 report reveals that digital trust does not necessarily require significant budget increases or creating new C-suite positions, and that prepared organizations have fewer privacy breaches and cybersecurity incidents, more reliable data for decision-making, better reputations, stronger customer loyalty, faster innovation and higher revenue. You can download the full report here to learn more.