By Antony Cook, Associate General Counsel, Corporate External and Legal Affairs, Microsoft Asia.
Interactions and transactions today are becoming digital. This is especially true in Asia Pacific, one of the most digitally active regions globally. In this region’s retail sector alone, consumers are already spending more on online retailing than North America and Europe combined, accounting for nearly half of the world’s business-to-consumer e-commerce market in 2017[1].
Over the last few years, we have witnessed a dramatic increase in the breadth and depth of digital services as organizations leverage game-changing technologies, such as cloud and artificial intelligence (AI), to digitally transform their business models, products and customer engagement approaches.
A Wide Consumer Trust Chasm in Digital Services
As consumers’ reliance on digital services continues to climb, organizations have unprecedented access to personal data. While this data fuels the growth and evolution of digital services, consumers are also increasingly becoming aware of the risks involved. Their personal data can potentially be used maliciously not only by hackers and criminal organizations, but also abused by organizations holding on to this data.
Many consumers are asking if they can trust the technology companies designing, developing and deploying digital services. Do these companies understand their responsibilities?
In the consumers’ eyes, many organizations in Asia Pacific do not make the cut when it comes to trust. According to the Microsoft-IDC Study, Understanding Consumer Trust in Digital Services in Asia Pacific, less than one-third of consumers (31%) in Asia Pacific believe that their personal data will be treated in a trustworthy manner by organizations offering digital services. This is more than just a perceptual issue as two out of five (40%) consumers have had their trust compromised when using digital services.
Working with IDC, Microsoft has defined five elements of trust that consumers consider when they use digital services: privacy, security, reliability, ethics, and compliance. The Study uncovered that the top three trust elements that caused consumers to stop using digital services are security (57%), reliability (55%), and privacy (53%).
The business implications for the loss of consumer trust can be dire. More than half (53%) of the respondents would switch to another organization if they experienced a breach of trust while using a digital service and 34% will stop using the affected type of digital service altogether. These drastic actions can potentially impede the rollout of new digital initiatives and hurt organizations’ bottom line.

Consumer Trust is a Critical Competitive Advantage in the Digital World
While the consequences of the loss of consumer trust can be severe, the upside of having a trusted digital platform can be significantly rewarding.
The study found that only 5% of consumers prefer to transact with an organization that offers a cheaper but less trusted digital platform. This has significant implication for organizations looking to use cost as the primary differentiator for their digital services. And for organizations that are planning to monetize their digital products further or introduce premium services, it is evident that fostering trust needs to be an integral part of their strategy.
Additionally, 61% of consumers highlighted that they would recommend a trusted digital service to others even if the cost is higher. Word-of-mouth advocacy, especially in today’s social media-driven world, can significantly bolster brand equity and provide strong differentiation for an organization’s services in the hyper-competitive landscape.
Building Consumer Trust in Asia Pacific
Building trusted digital services takes planning, time and commitment for organizations to get it right. It is not an easy feat, but here are five strategies that organizations can consider to ensure their digital services are firmly rooted in gaining consumer trust:
- Embed trust at the core of digital transformation plans: The trust-related choices that organizations make as they explore the opportunities and risks of digital innovation will have a lasting impact on their ability to create value and thrive in an increasingly competitive digital world. Organizations should seek to address the policy, regulatory, and ethical issues that these technologies raise while achieving the highest compliance with data protection laws and standards for themselves and their customers.
- Prioritize security and privacy as the two most important trust elements: It is essential for organizations to start their journey of building a trust framework by prioritizing cyber defense strategies, as well as defining what type of data is critical to protect.
- Orchestrate dialogue between governments, technology companies and other industry stakeholders: The responsibility of building trust should not rest solely on the shoulders of organizations providing digital services. The broader industry, including regulatory institutions as well as technology companies, play a critical part too. The Study showed that consumers in Asia Pacific feel that the government (43%) should take the lead in building trust, followed by technology companies (35%).As the development of digital services and the use of technologies such as AI will necessarily involve issues that go beyond the organization, a broader debate that involves the appropriate stakeholders is necessary. This ensures the interest of our society is considered as organizations formulate the right approach to building trust.
- Create an ecosystem of partners that value trust: An organization cannot function effectively without an ecosystem of partners providing related products and services, from manufacturing supply chain, technology solutions and platforms, to customer delivery channels. Organizations should only work with partners that respect customer’s privacy. Technology partners should give customers control over their data and be transparent in their privacy practices, offering meaningful privacy choices and transparency on the processing and storage of data.
- Host digital services on trusted cloud platforms: As organizations increasingly rely on cloud for their digital services, they will need to ensure their cloud platform is built on the five elements of trust: privacy, security, reliability, ethics, and compliance.
Today, more than ever, organizations’ long-term success depends on their ability to build consumer trust in their digital services and the technology they use. If organizations can bridge the vast consumer trust chasm that exists today, the fruits of their labor will be incredible – strong brand differentiation, customer loyalty, and greater confidence to accelerate their digital initiatives to capitalize on Asia Pacific’s burgeoning digital economy.
[1] United Nations Economic and Social Commission for Asia and the Pacific, Embracing the E-Commerce Revolution in Asia and the Pacific