Digital Trust in The Age Of Data Privacy : Insights & Best Practices

By: Dr. Mythili Kolluru

Summary: Faith is becoming increasingly important as more and more activities are conducted online, from banking and shopping to communication and social networking. Without digital trust, users are less likely to engage in online activities. They may be hesitant to share their personal information, which can limit the growth and development of digital economies. In this article, Dr. Mythili Kolluru, a strategy consultant & professor who has written on 4IR, Metaverse, and the Internet of Behavior, reveals the nuances of digital trust for organizations to navigate their competitive advantage in a continuously evolving digital business landscape.

INTRODUCTION

Digital trust is a relatively new concept that has gained more attention in recent years due to the increasing importance of digital technologies in our daily lives. In a survey conducted by PwC in 2019, 58% of respondents indicated they were concerned about data privacy and cybersecurity, indicating a growing awareness of the importance of trust in the digital age. Similarly, a survey conducted by Edelman in 2020 found that trust in technology was at an all-time high, with 76% of respondents indicating that technology has positively impacted their lives. Digital trust refers to the confidence and reliability that individuals, organizations, and systems have in the security, privacy, and authenticity of digital transactions, communications, and interactions. It is built on data security, privacy protection, and transparency, where users can trust that their data and information are handled responsibly and securely.

In recent years, there has been a growing recognition of the importance of digital trust for individuals, organizations, and governments. While some countries have made significant progress in building digital trust, others have lagged. According to the latest research and surveys, countries like Denmark, Finland, and Norway are leading the way in digital trust. These countries have established solid legal frameworks for data protection, investing in digital infrastructure, and implementing effective cybersecurity measures. They have also tried to promote transparency, user control, and responsible use of data.On the other hand, countries such as Russia, China, and Brazil have been identified as lagging in digital trust. These countries have been criticized for their lack of transparency, weak legal protections, and limited investments in cybersecurity. As digital technologies continue transforming the global economy and society, digital trust will likely become an increasingly important factor in international competitiveness and cooperation.

One of the most important but least known facts about digital trust is that it is not just about technology but also human behavior and organizational culture. While technology is critical in ensuring digital trust, more is needed. Human factors such as awareness, training, and behavior can significantly impact digital confidence.For example, an organization may invest heavily in state-of-the-art security technology to protect its digital assets. Still, if its employees are not trained to identify and respond to security threats, technology alone will not be enough to ensure digital trust.

Similarly, an organization may have the most advanced privacy policies and procedures. However, if employees do not understand or value privacy, the organization may still be at risk of data breaches or other privacy violations. Therefore, digital trust requires a holistic approach considering technological and human factors and a culture of security and privacy embedded throughout the organization.

Research insights

A growing body of research suggests a positive association between digital trust

and organizational performance. Some studies have indicated a positive correlation between digital trust and financial performance. For example, a survey by PwC found that organizations prioritizing cybersecurity and digital trust are more likely to achieve revenue growth and profitability.However, it should be noted that the relationship between digital trust and organizational performance is complex and can depend on factors such as the industry, the organization's size, and the nature of its operations.

Digital trust can enhance organizational performance in several ways:

• Digital trust can build stronger relationships between customers and organizations. When customers trust an organization to protect their data and provide secure online transactions, they are more likely to remain loyal to that organization.

• Organizations perceived as trustworthy digitally will likely enjoy a better reputation and brand image, leading to increased customer engagement and sales.

• Strong digital trust can help organizations manage risks associated with data breaches and cyber-attacks. Organizations that have invested in robust cybersecurity measures are less likely to experience data breaches and associated reputational damage.

• Organizations that are perceived as trustworthy are more likely to be able to attract and retain talent leading to increased innovation and competitiveness.

Digital trust is becoming increasingly important in our society as more and more of our personal information and transactions are conducted online. However, several critical ethical issues associated with digital trust must be addressed. One of the biggest challenges is the constantly evolving threat landscape as technology advances. There is also a need for a universally recognized digital trust standard widely accepted across industries and regions. Digital systems and networks' increasing complexity and interconnectedness can also pose a challenge. Ethical issues related to digital trust include:

• The privacy of personal information

• Fair and transparent use of AI and machine learning algorithms

• Addressing the digital divide

• Cybersecurity Companies that collect and store personal data are morally obligated to protect it, and AI and machine learning algorithms should be used fairly and transparently. Addressing these critical ethical issues is essential for building a trustworthy digital environment that benefits everyone.

Let's learn from corporate illustrations

Several companies are considered leaders in digital trust and can be used as benchmarks.

• Apple has established a reputation for security and privacy by using strong encryption and strict security measures for its devices and services. The company also strongly focuses on transparency, with clear privacy policies and regular reports on government requests for user data.

• Amazon has built trust through its customer-centric approach, focusing on providing high-quality products and excellent customer service. The company also uses secure technology, such as HTTPS and two-factor authentication, to protect user data and transactions.

• Google has invested heavily in security and privacy, with measures such as encryption, two-factor authentication, and regular security audits. The company also provides users transparency and control over their data through clear privacy policies and tools such as the Google Dashboard.

• Microsoft invests heavily in cybersecurity to protect its customers' data and systems from cyber threats. It has implemented multiple layers of security, including encryption, multi-factor authentication, and advanced threat analytics. Microsoft has committed to the ethical use of artificial intelligence (AI) and has established principles for the development and use of AI.

• Airbnb's business model is based on trust, and as such, the company places a high priority on building and maintaining trust with its users. It has implemented multiple features to ensure its guests' and hosts' safety and security, such as ID verification, background checks, and secure payment systems. Airbnb is transparent about its policies and practices, including its fees and the terms and conditions of its platform.

• Salesforce has created a trusted platform with comprehensive security, privacy, and compliance features. The platform is designed to protect customer data and ensure the privacy of its users. It includes multi-factor authentication, encryption, and role-based access control.

• Netflix has implemented various security measures to protect user data, such as using SSL encryption to secure data in transit and regularly testing its systems for vulnerabilities. Additionally, the company has published transparency reports detailing the number of government requests for user data it receives and how it responds to those requests.

• PayPal has implemented various measures to achieve digital trust among its users. One key factor is its focus on security. PayPal uses advanced encryption technologies to protect user data, such as SSL encryption

for transactions and two-factor authentication for account access. The company also has a dedicated team of security experts who monitor and respond to potential threats in real time. PayPal's focus on security, transparency, user control, and responsible AI use has helped it build trust among its users and maintain its reputation as a leading digital payment platform. Overall, these companies have all demonstrated a commitment to digital trust and have implemented measures to protect user data and transactions, provide transparency and control over user data, and establish a reputation for reliability and safety. No two companies are alike; different companies operate in various industries with distinct business models, so their strategies for establishing digital trust will differ.A company's digital trust strategy should align with its overall business strategy and goals, be guided by industry best practices and regulatory requirements, consider its customers' and stakeholders' needs and expectations, and address technology's potential risks and threats.

Strategies organizations can implement to establish a reputation as a reliable and trustworthy digital partner.

• Organizations should be transparent about their data collection and usage policies. They should also implement secure data storage and processing practices to protect their customers' personal information.

Organizations should continually evaluate and improve their digital practices to maintain trust. They should solicit feedback from customers and stakeholders and be responsive to their suggestions for improvement.Foster a culture of trust within the organization by aligning its values with the expectations of its customers and stakeholders. Conduct regular training and awareness programs for employees to ensure they understand their role in maintaining digital trust.

Concluding remarks

While "digital trust" may not be widely known or understood by the public, the underlying concepts are becoming increasingly important as digital technologies continue to shape our businesses, lives, and society. As such, awareness of the importance of digital trust will likely continue to grow in the coming years. Ensuring digital trust requires organizations to be mindful of ethical considerations related to privacy, bias and discrimination, cybersecurity, transparency, and responsibility. By addressing these issues, organizations can build trust with their users and create a more ethical and trustworthy digital ecosystem.

AUTHOR PROFILE

Dr. Mythili Kolluru is an Assistant Professor at the College of Banking and Financial Studies in Oman, with extensive teaching and research experience in Strategic Management, Organizational Studies, and International Business. She is also a certified Strategic Planning Professional and Chief Strategy Officer of Funkeyb, a London-based Management Consultancy firm. Dr. Mythili is the author of the widely recognized "Strategic Thinking Wheel" framework and has published extensively in top rated journals, edited book chapters, and a book on strategic management. With over two decades of experience in academics and the corporate world, she has supervised over 100 master’s and undergraduate research projects, presented at national and international conferences, and actively participates in outreach initiatives. Dr. Mythili is also a holder of several copyrights, including the Strategic Thinking Wheel and the Career Decision-making Grid.professormythili@gmail.com.

DIGITAL TRUST IN THE AGE OF DATA PRIVACY: INSIGHTS & BEST PRACTICES