In recent years, technology has rapidly transformed the way we live, work and play in Singapore. Just a couple of years back, many of us were still enjoying shopping at retail malls, paying for purchases in cash and catching up with our friends at cafes and restaurants. Today, all these activities can be completed via a few simple touches on our smartphone, aided by the wide range of digital services that enable us to make purchases, bank transactions and be updated on the latest happenings within our social circle.
As digital technologies continue to permeate every part of our lives, more and more of our interactions and transactions with people, organisations and the government will be conducted digitally. This is especially true in Singapore, as the government envisions the city-state’s transformation into a Smart Nation that is powered by digital innovation, with all segments of the society being able to harness digital technologies in ways that benefit their everyday lives.
Increasingly, as the nationwide push for digital transformation propels organisations of all sizes to adopt game-changing technologies such as artificial intelligence (AI) to transform their business models, products and customer engagement approaches, consumer trust will become a key differentiator for businesses looking to gain a competitive advantage in a digital world.
After all, consumers will not use technology and digital services that they do not trust, hence organisations, technology companies and the government will have to work together to collectively meet consumers expectations of trust now and into the future.
The vast consumer trust gap in Singapore
As consumers’ reliance on digital services continue to increase, organisations will have unprecedented access to large volumes of personal data. While this data has the ability to fuel the growth and evolution of digital services, consumers are also increasingly aware of the risks of their personal data being used maliciously by cybercriminals, and misused by the organisations holding on to this data.
In fact, many consumers in Singapore do not believe that organisations providing digital services will treat their personal information in a trustworthy manner. According to the Microsoft-IDC Study on Understanding Consumer Trust in Digital Services in Asia Pacific, less than one in four Singapore consumers (23%) said that they can trust organisations with their data, and 61% are ambivalent about the issue. This is more than just a perceptual issue as 32% of Singapore consumers have had their trust compromised when using digital services.
Working with IDC, Microsoft has defined five elements of trust that consumers consider when using digital services – privacy, security, reliability, ethics, and compliance. The study also uncovered security (58%), reliability (57%) and privacy (51%) as the top three trust elements that caused Singapore consumers to stop using digital services following a negative trust experience.
The business implications for the loss of consumer trust can be dire. Half of the Singapore respondents would switch to another organisation if they experienced a breach of trust while using a digital service and 38% will stop using the affected type of digital service altogether. These drastic actions can potentially impede the roll-out of new digital initiatives and even hurt organisations’ bottom line.
Consumer trust is a critical competitive differentiator in a digital world
While the consequences of the loss of consumer trust can be severe, the upside of having a trusted digital platform can be rewarding. The study found that only 5% of Singapore consumers prefer to transact with an organisation that offers a cheaper but less trusted digital platform. In contrast, more than half (55%) of the consumers would prefer to transaction with an organisation that offers a more expensive, but trusted digital platform. Not only does this have significant implications for organisations looking to use cost as the primary differentiator for their digital services, organisations who are looking to grow will also need to look at prioritising trust as part of their strategy.
Additionally, 56% of Singapore consumers said 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 organisation in the hyper-competitive landscape.
5 recommendations to build consumer trust in Singapore
While building trusted digital services takes significant time, resources and commitment to get it right, Microsoft has distilled our learnings in building trust through the years into five recommendations for organisations to consider when building consumer trust in a digital world:
- Embed trust at the core of digital transformation plans: The trust-related choices that organisations 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. Organisations should seek to address the policy, regulatory and ethical issues that these technologies raise while ensuring compliance with data protection laws and standards for themselves and their customers.
- Prioritise security and privacy as the two most important trust elements: It is essential for organisations to start their journey of building a trust framework by prioritising security and privacy 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 organisations providing digital services. As the development of digital services and the use of technologies such as AI involve issues that stretch beyond the means of the organisation, a broader debate that involves the industry, including regulatory institutions, technology companies, industry associations and communities at large, is necessary. This ensures the interest of our society is considered as organisations formulate the right approach to building trust.
- Create an ecosystem of partners that value trust: An organisation 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. Organisations 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 organisations 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.
More than ever, organisations’ long-term success will depend on their ability to build consumer trust in their digital services and the technology they use. If organisations can effectively bridge the vast consumer trust gap 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 capitalise on the burgeoning digital economy today.