By Ranjan Reddy, Founder & CEO, Bureau
Whom do you really trust? Most of us, if pressed to answer this odd yet pertinent question, would actually have a very short list. We’ll probably list a few family members, maybe a close friend or two. In reality, we trust far more people than those. We actually end up trusting complete strangers. We trust our cab driver with our safety. We trust our bank with our money. Heck, we even trust social media websites with our personal data. Almost all of our decisions revolve around trust. Whether we are shopping for groceries online or completing our KYC for a new mutual fund, we are actually trusting these services to keep our data safe and deliver on their promises.
Building trust online is becoming increasingly important for any individual or business. Your ability to establish an authentic and trustworthy presence online can make or break you in this digital age. This is perhaps why you won’t bother to tidy your hotel room while checking out but will make sure that your AirBnB accommodation is in order. We behave differently because AirBnB not only lets you critique your hosts, but allows the hosts to rate you too; a tangible representation of an exchange built on trust. Yet today, our shared foundation of trust is under strain as the disruptive impact of new technologies are stretching the limits of traditional systems of trust-building.
For starters, there is considerable concern that the internet is one of the major contributors to this problem of trust. But the internet was not originally designed to address trust problems and security concerns. As Vinton Cerf, one of the creators of internet protocols, put it: “We didn’t focus on how you could wreck this system intentionally.”
The question arises, then: What will happen to online trust in the coming years? For that, we need to understand what online trust is. Online trust is about any two entities interacting with each other and engaging in some form of economic exchange without the fear of any negative repercussions. If something does go wrong during an exchange, it leads to friction, fraud and compliance issues, thereby eroding the trust of one or both entities.
Trust and risk are two sides of the same coin. Trust is the belief and expectation that a specific outcome will occur. So, when two entities come together for economic or financial exchange, trust ensures that both parties get some value out of the interaction swiftly and efficiently. In the physical world, it’s much easier to gauge the intent of the people involved through their communication and their body language, etc. This, more often than not, really helps to decide whether the transaction will go or fall through.
But, the digital world is a different ballgame. In any online transaction, different entities fulfil each part of the transaction. When these entities work cohesively, there is a seamless, frictionless transaction. However, a failure in any part of the process leads to a bad experience for the user, such as data being compromised, misuse of private information, defrauding etc. In turn, a failure on the part of the service provider to verify trustworthy individuals results in the provider being defrauded or compromised. A delicate balance must be struck by the service provider; either introduce friction into the equation in the form of increasingly elaborate verification protocols or implicitly trust users and prioritise seamless experiences?
Online trust has not been having a good run in recent years. According to The Global Risks Report 2022, converging technological platforms, tools, and interfaces are creating a more complex cyber threat landscape and a growing number of critical failure points. Intangible risks—such as disinformation, fraud, and lack of digital safety—are impacting the collective public trust in digital systems. At an individual level, questions are being raised about privacy and how a user’s information is protected online. How companies procure, manage and share that data is fast becoming the determining factor in successful customer relationships. Failure to do so can cost a company its reputation and money. When PayPal admitted to closing down 4.5 million accounts after ‘bad actors’ took advantage of rewards and incentives programmes, it sent its shares plummeting by a whopping 25%.
In the pre-pandemic digital world, there was always a trade-off between friction and fraud. However, with the proliferation of digital transactions during the COVID-19 pandemic, things have evolved thanks to technology, user awareness, businesses getting more innovative with their business models, regulators and governments passing new-age regulations, etc. With these changes, the premise of whether the trust will come at the cost of security or security has to be introduced to verify trust, still remains to be seen.
As we move deeper into the digital age and our lives become more integrated with the internet, our ability to establish trust is an essential skill to cultivate. Those that get the trust equation right will be the ones best positioned to capture the most valuable customer data, as well as digital’s full business potential. Technologies such as biometrics, encryption, digital IDs, blockchain and smart contracts are being invested upon to enhance security and build trust. But they are in a race with darker forces who continue to become more effective in breaching security measures.
Regaining online trust is a shared responsibility. Current vulnerabilities, privacy concerns or data issues cannot be solved in isolation as businesses, governments and consumers have to come together to ensure trust in a digital world. Businesses that refuse to comply should face the consequences while those that can prove ethical and trustworthy should be rewarded. Stakeholders need to work together using a pro-privacy shared data infrastructure in order to ensure a safer internet space, enhanced collaboration, build resilience and ultimately, create new revenue streams. Online is a safe place to be, once you open your eyes and take charge of your data and safety.