In an era of mistrust, as an annual Edelman study highlights, customers and other key stakeholders’ faith in the institutions they deal with is diminishing. Turning that statement on its head, however, those businesses able to buck this trend and reconfirm a bond of trust with stakeholders will have a distinct competitive advantage: 58% of consumers buy brands based on their beliefs and values; 60% of employees choose their employers for the same reasons; and 64% of investors make key decisions with these factors in mind.
Corporate digital responsibility now sits at the heart of this debate. Significantly, trust in technology companies has suffered markedly in recent years, amid increasing concern about use of customer data and the practices that underpin some digital products. Moreover, research increasingly shows that trust is much greater in businesses perceived as having strong data protection and robust cybersecurity defenses than those who are perceived to lack them.
In other words, strengthening digital responsibility can drive value creation. Those brands regarded as more responsible will enjoy higher levels of stakeholder trust and loyalty. These businesses will sell more products and services, find it easier to recruit staff and more straightforward to raise capital and enjoy fruitful relationships with shareholders.
Going beyond just compliance
If that sounds simple, for many organizations, the penny does not yet seem to have dropped. One explanation for this is the weight of regulation related to digital responsibility with which businesses are now dealing. The response to exacting standards such as the European Union’s General Data Protection Regulation (GDPR) has inevitably left many organizations looking at digital responsibility through a compliance lens. The new Digital Markets Act and Digital Services Act exert a similar influence.
Another issue has been the near-hypnotic allure of emerging digital technologies. Advances in areas such as artificial intelligence (AI) and data analytics appear to offer a short-cut to smarter, quicker decision-making. Too often, however, organizations have overlooked the inherent risks of such black boxes, which can obscure the presence of biased data and unsuitable modelling that ultimately leads to poor outcomes.
This is not to suggest that businesses should put their compliance responsibilities to one side or give up on the potential of digital technology, which, when implemented carefully, can be an invaluable tool to support the achievement of strategic and operational goals. However, those that do not also see the clear link between greater digital responsibility and value creation will miss a golden opportunity.
Winning the battle for trust
A growing number of businesses do now recognize this. US-based technology company Apple, for example, has increasingly put data privacy at the core of its brand strategy. Since 2021, for example, its iPhones and iPads have included a simple option for users to prevent third parties, such as advertisers, from tracking their data.
Such features have proved immensely popular with customers: 94% of Apple’s US customers have chosen to opt out of data collection. And, as a result of offering this facility, trust in the business has improved. Apple now enjoys ratings on metrics such as net promoter scores that are well ahead of those of comparable companies, who are following its lead in a bid to catch up.
Businesses in other sectors are also grasping the opportunity. Swiss insurance company Die Mobiliar, has deliberately chosen to look at its data strategy as a business enabler. In practice, that required the business to build an interdisciplinary team to work on data strategy, including representatives from functions such as Compliance, IT and Business Security, while maintaining alignment with overall business goals.