The rising significance of trust in the digital world

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Vinod Kumar, CEO and Managing Director of Subex, explores the concept of trust in a digital context.

Over the centuries, if there has been one aspect that has propelled businesses to success, it is trust. As humans, we are quick to avoid uncertainties and subconsciously tend to gravitate towards entities that promise us predictable outcomes. Some of the world’s most successful brands were built on the pillar of trust, and as we move into a fully digital world, trust becomes even more relevant than ever.

In a physical world, the concept of trust involves two entities (usually), and its scope is limited to the establishment and validation of who these entities claim to be. The logistics involve lengthy procedures, pre-defined processes and in some cases intermediaries to broker the trust. Once established, this trust lasts forever, unless disrupted by either of the entities involved.

However, in the digital world, the setup is far more volatile and complex. Firstly, any digital interaction involves many entities coming together for the first time—they are completely unknown to each other. Secondly, the durations of these interactions are much shorter now, making trust more transient in the digital world. Thirdly, trust is a far more complex concept in the digital world, as it goes beyond simply establishing the identity of the entities involved. It covers the ability of the entities to deliver what they promised, the integrity of the entities to handle data ethically, their affiliations, and many more factors.

As businesses transform into digital entities they deal with tons of data, complex partner ecosystems and customers from across the globe. Research suggests that over 1.7mb of data is generated per person per second, leading to over 2.5 quintillion bytes of data each day. However, a vital point to remember is that the integrity of this data remains unknown. Concurrently, partnerships are expected to unlock an economic value of over $100 billion in the next 10 years. However, it still remains unknown if we can trust the partners we onboard on to our ecosystem. Also, more than half of the world’s population is online today, with digital footprints and unique digital identities. However, this extensive presence itself questions if the identities that businesses deal with today are authentic.

It can be rightly assumed that answers to all of the above questions are negative. In general, there is a lack of trust in the digital world, and this stems from the complexities attached to the concept of trust in a digital context. What is interesting to observe is that we are not looking at consumers trusting enterprises less with their data. Rather it is a multi-dimensional and multi-directional lack of trust between consumers, enterprises, partners, assets, and data that is evident.

The silver lining though is the fact that executives and world leaders are viewing digital trust as one of the top priorities for their organisations and are taking measures to infuse trust in their ecosystems.

What exactly is digital trust?

According to Gartner, digital trust underpins every digital interaction by measuring and quantifying the expectation that an entity is who or what it claims to be and that it will behave in an expected manner.

While the exact definition of digital trust may be hard to establish, and different organisations define the concept in ways that they understand best, there is one common thread that unites their thinking— building trust across people, processes, and systems in a digital world. It is often said that trust takes years to build, seconds to break and forever to repair. Digital trust, on the other hand, takes a few moments to build, an instant to break and is continuously adaptive. In the backdrop of digital disruption across all industries, many erstwhile differentiators have become commoditised levelling the playing field for all. It has also brought about a significant change in the business models leading to a large number of mobile-first and crowd-funded businesses along with an entirely new labour market known as the ‘gig economy’. Customer preferences too have changed drastically with personalisation and customisation becoming the norm and instant gratification being the expectation. In such a scenario, there is one aspect that sets aside winners from the rest and that is the ability of an organisation to infuse digital trust.

Today, digital trust is viewed as the centrepiece for success—from enhancing brand image and adopting new technologies to bringing in investments, rolling out new offerings and expanding the partner ecosystem.

Understanding digital trust

Let’s face it, digital trust is not an easy concept to understand and incorporate. The fluidity of the topic gives the term more than one meaning, and even this varies with context. Hence, businesses need to understand what digital trust means in the context of their business and drive focused efforts towards building the same. The following examples serve to illustrate what digital trust is and its importance.

Ride-hailing

The worldwide ride-hailing market is expected to grow at a CAGR of 21% by 2023. We are currently experiencing a surge in the number of such apps and platforms that have come up in the last few years, and the number of consumers adopting it. This surge also illustrates a classic case of a physical transaction turning digital—a ride-hailing app brings multiple unknown entities together behind a digital curtain. The customer requesting the ride is oblivious to who his driver partner would be and vice versa. In addition, both the customer and the driver partner have no idea where their data is being sent and stored. There is also a payment gateway provider who enables the financial part of the transaction but is unaware of the two entities on the other side. Yet somehow all of them work together in tandem which results in a meaningful transaction behind a metaphorical ‘digital curtain’. This example clearly illustrates that all of the above is possible only because of the element of trust established between the transacting entities.

e-Commerce shopping

The retail industry is perhaps one of the earliest sectors to experience and embrace digital disruption. Today, almost anything we need can be purchased at the press of a button using the variety of e-commerce apps available. Similar to the ride-hailing example, several entities including the buyer, seller, the courier, and the payment gateway provider come together to execute a successful transaction—all without really knowing each other. The buyer trusts the e-commerce platform to tie up with only legitimate sellers, the seller trusts the buyer to be an authentic individual and not a fraudster and both of them trust the payment backbone to enable the transparent transfer of money—all of which is underlined by the basic trust that their data is safe and secure. More importantly, at the root of it, a buyer chooses one e-commerce platform over another due to their trust that the platform will deliver quality goods at a desirable time and cost.

Mobile network service

Have you wondered why a consumer chooses one telecom operator over another? In a crowded and competitive market like telecommunications, price is seldom the deciding factor, and every operator claims to have superior network quality. Yet, some continue to grow while others struggle to retain their existing customers. This is because consumers place both transactional and competence trust in one operator over another. Transactional trust is when a consumer believes that the operator is truthful enough to deliver the services that have been paid for. Competence trust is when the consumer believes in the continuous ability of the operator to sustain the delivery of the promised service. Of course, neither of them is built overnight, and multiple factors contribute to the building of this trust. However, once established it leads to long-term success.

Data-driven decision making

Little more than a decade ago, the term ‘data-driven’ was probably just a buzzword and an operational state which forward-looking organisations were aspiring to reach. This was because there wasn’t sufficient data being generated to support organisational decision making and there weren’t any mechanisms present to derive meaningful insights from this available data. However, today with the advent of digital services combined with the advancements in data sciences and artificial intelligence, we are at a stage where data-driven decision making is not only possible but is also powerful. Yet, when it comes to implementation, there are just a handful of businesses that can confidently state that their organisation’s data is accurate enough for decision making. In fact, recent studies show that over two-thirds of executives do not place a high level of trust in their organisation’s use of data. Clearly, organisations that trust the integrity of their data are the ones who can confidently boast of data-driven decision making at the organisational level.

The examples of digital trust and its relevance can be endless, but the concept is constant. Businesses that focus on building trust stand to gain an undeniable upper hand over the ones who do not prioritise trust and this can be seen across all industries.

Vinod is responsible for leading the strategic direction for the company and driving its execution by fostering the right culture of leadership and talent development. Prior to becoming the CEO and Managing Director, Vinod served as a COO of Subex where he spearheaded several initiatives that helped the company engage with its customer as a long term strategic partner. These initiatives, in turn, helped Subex emerge as a global leader in Revenue Management space.