People network linking and connection showing trust as strategic business asset

Turning Trust Into a Strategic Business Asset

Companies that monetize consumer data have a curious relationship with trust. Consumers have freely given them access to their preferences, attitudes and personal information in exchange for being connected, informed and entertained. In some cases however, corporate stewardship of that trust has taken a back seat to the larger imperatives of continuous growth and revenue generation. As a result, the trust relationship between consumers and companies that rely on their data is on very thin ice. There is a growing disconnect between corporate data practices and consumer expectations of data privacy and security. As businesses collect more and more personal data, people are increasingly suspicious of how their data are being used and are reporting concerns about the level of data collection.

The declining state of trust in corporate data stewardship

In a recent survey of 250 business leaders conducted by KPMG 70 percent said their company increased collection of consumer personal data over the last year, while 62 percent acknowledged that their organization should be doing more to strengthen existing data protection measures, and 33 percent cautioned that consumers should be concerned about how their personal data are used by their company. Perhaps the most alarming finding was that 29 percent admitted that their company sometimes uses unethical data collection methods.

The survey, which also polled 2,000 U.S. adults, found that consumers are increasingly worried about how their data is being used by organizations, and many of these concerns are grounded in a fundamental lack of trust.  Sixty-four percent said companies are not doing enough to protect consumer data and 83 percent would not willingly share their data to help businesses make better products and services.

This split between business practices and consumer sentiment isn’t new, but its persistence shows that businesses have a long way to go to make the public more comfortable with how they are collecting, using and safeguarding data. Failure to take decisive action could present a real risk of losing access to the valuable data and insights that drive growth.

The pathway back to trust

Companies can take meaningful steps to restore trust before it becomes irreparably broken. By embracing a “trusted imperative,” they can change company culture, recommit to ethical business practices, transform organizational processes, and build a trust ecosystem. Below are the essential tenets business leaders can adopt to put trust stewardship at the heart of their growth strategies.

Trust begins with transparency. Consumers want more transparency around how their personal data are being used by companies. Forty percent of the survey respondents said they would willingly share their personal data if they knew exactly how it would be used—and by whom. In contrast, now, only 53 percent of business leaders say their company shows how such data will be used.

To bridge this gap, leaders should work to become more explicit and transparent about how consumer data will be used. They should also take the lead in establishing corporate data responsibility policies and practices. Businesses can expect to be rewarded for taking these measures, as evidenced by those 40% of consumers who would readily share their data under such conditions.

Better data management is a business opportunity. When it comes data management tools, companies tend to focus on security, efficiency and analytics, and are missing opportunities to nurture relationships. For instance, employing increasingly precise consent management tools gives consumers more control over their personal data – and this can actually be a benefit to organizations. Given consumers’ general hesitance to share their data, a customer who does opt to do so, may be signaling interest in deeper engagement with the business. Smart businesses will use these opportunities to establish richer, more productive and mutually beneficial relationships.

Trust is an essential pillar in the transformation model. Many companies engaging in digital transformation have harmonized their front, middle and back-office operations to drive efficiency and improve customer experiences. Business leaders should also think through strategic, proactive ways to build trust and generate value across their entire business ecosystem. This requires determining which areas of the business have a direct impact on stakeholder trust and creating a case for investment that plans for, operationalizes, and manages risk and regulation in each area.

Developing a trust culture requires redefining company values. Companies that value agility and resilience should also lean into empathy, courage, passion, and integrity. Viewing organizational connectivity from the customer confidence lens and practicing organizational self-awareness will inform transformation initiative priorities in a way that inspires trust.

Investing in new tools can accelerate recapturing trust. Leveraging data discovery, governance and protection tools, and exploring new use cases for emerging technologies like blockchain, artificial intelligence and machine learning can enhance data accuracy, integrity and security to build consumer trust. These technologies can help organizations build greater visibility into their data practices to drive responsible data collection and use.

Trust takes a village. Companies must embrace a stewardship responsibility that obliges them to monitor and manage trust across their ecosystem, aligning partners, suppliers and affiliates with their values, goals, operational models, and metrics. Business leaders need to come together to address shared challenges, incorporating many stakeholders in the process of defining common trust criteria, and establishing governance and controls over broader risk activities. They should also establish shared evaluation models and performance measurement tools.

Transformation driven by technology and changing consumer demand is creating new opportunities across all business sectors. As transformation matures, companies are better able to anticipate shifts, pivot quickly and innovate efficiently to stay competitive. There is still inherent risk if they fail to embrace trust as an operational and cultural pillar. Trust is the ultimate business enabler. When enterprises inspire trust in all their stakeholders, they create a platform for better business performance – including responsible growth, bold innovation and sustainable advances in performance and efficiency.

Companies that monetize consumer data have a curious relationship with #trust. In some cases however, corporate stewardship of that trust has taken a back seat to the larger imperatives of continuous growth and revenue generation. #privacy #respectdataClick to Tweet

Companies that adapt their business models and cultures to incorporate trust principles and practices can strengthen their reputation in the marketplace and at the same time, take advantage of opportunities for richer, more valued customer relationships.

 

Partner, Trusted Imperative Leader at KPMG US