In a digital age where privacy and security are such prominent factors for organizations to engender confidence in their brands, the fact of the matter is this: consumers are not going to buy from organizations that they don’t trust to secure their data.
According to the Cisco 2023 Data Privacy Benchmark Study, 94% of organizations said their customers would not buy from them unless their data is properly protected.
Data privacy can be a complex landscape to navigate. That’s why we focused on three priorities that companies may consider to help them earn and build trust with their customers.
1. Be Transparent About How You Use Customer Data
The keys to building trust are transparency and communication. This is true in all aspects of life, but especially when it comes to protecting personal data. When consumers were asked what matters most to them in terms of trust with their data, their top priority was transparency by nearly a 2-to-1 margin. They want to know that their personal data is only being used in ways they understand and would expect. Interestingly, there is a bit of a disconnect between consumers and organizations on this issue. When organizations were asked what they thought mattered most to consumers in terms of trust and data, they ranked compliance ahead of transparency.
Transparency can be particularly difficult to achieve when using Artificial Intelligence (AI), due to the nature of the decision-making algorithms. 96% of organizations feel they have the right processes in place to meet the responsible and ethical standard customers expect, but most consumers don’t see it that way. Nearly two-thirds of consumers have already lost trust in organizations due to their AI practices and are willing to take action if they don’t feel their data is safe. Over one-third of respondents said they have already changed providers over their data policies or practices. It’s important for organizations to be transparent about how personal data is being used, who has access to it, how long it is retained, and so forth.
2. Provide Greater Choice in Automated Decision-Making
Organizations must proceed carefully and thoughtfully when using personal data in AI and automated decision-making that materially affects customers. When it comes to how AI is applied and used in their solutions and services, 92% of survey respondents said that their organization needs to be doing more to reassure customers that their data is being used only for intended and legitimate purposes. It seems organizations are starting to get the message that they aren’t doing enough.
So, what actions have organizations put in place that could help reassure their customers? 63% of organizations are ensuring that a human is involved in the decision-making process, 60% provide greater transparency, and 55% have adopted Responsible AI principles into their operations. Yet only 21% of organizations said that they give customers the opportunity to opt out of AI decision-making, the option most preferred by consumers. Giving consumers freedom of choice is a huge step for organizations to take to build confidence and trust.
3. Weigh the Benefits and Costs of Data Localization
Data localization requirements recently have been seen as an attractive approach for protecting data, as it forces data to be kept within a country or region. While this may appear to be a good idea at first, our research indicates that it becomes less attractive once cost, security, and other trade-offs are considered. In our most recent Consumer Privacy Survey, 78% of consumers initially thought data localization was a good idea, but their support dropped to 41% once they took into consideration the added cost for goods and services. And data localization does add significant cost, according to 89% of the organizations in this year’s survey.
For organizations, 88% of the respondents surveyed said that their data would be inherently safer if stored within region, but a remarkable 90% also said that a global provider, operating at scale, can better protect their data compared to a local provider. Looking at both perspectives, it appears that organizations ideally would like to keep their data local, but when forced to choose, they would prefer a global provider over a local one.
Data privacy has become a business imperative and a critical driver of customer trust for organizations around the world. While there are many complicated facets to consider, we hope that focusing on these three key priorities can help foster transparency and accountability that will build confidence and trust with customers.